Former Speaker of Parliament, Professor Aaron Mike Oquaye, has called for an end to Ghana’s reliance on royalties as the primary financial return from its vast natural resources, describing the system as economically outdated and detrimental to national wealth creation.
Speaking at a high-level policy seminar organised by the Institute of Economic Affairs (IEA) in Accra on the theme “The Dilemma of the 17th IMF Programme and Our Natural Resources – A Pathway to National Development,” Prof. Oquaye said Ghana’s current natural resource governance framework reflects a “colonial hangover” that limits the country’s ability to fully benefit from its own assets.
“The royalty system is a colonial relic that treats Ghana not as a partner but as a subject,” he stated. “It is time to move from token payments to true ownership.”
Royalty Model Stifling Long-Term Economic Value
Under Ghana’s current arrangement, foreign multinational companies (MNCs) extract minerals and hydrocarbons while paying royalties, typically between 3% and 6% of gross production to the state.
Prof. Oquaye argued that this structure creates a weak fiscal position for Ghana, depriving the nation of billions in potential revenue and leaving it vulnerable to external economic shocks.
“The government’s shareholding in many major mining and petroleum ventures has been diluted to near zero,” he said. “We have become rent collectors in our own home accepting crumbs while the real value is shipped abroad.”
According to Prof. Oquaye, this royalty-dependent model has entrenched a cycle of low returns, foreign control, and limited linkages to the local economy.
He said Ghana’s natural resource wealth, which includes gold, bauxite, manganese, and oil, should be the foundation for domestic capital formation, industrialisation, and job creation, rather than a source of mere fiscal relief.
Call for Ownership-Based Governance and Institutional Reform
The former Speaker proposed a shift towards an ownership-based governance system, where the state or its designated entities hold controlling stakes in resource ventures while outsourcing technical operations through service or profit-sharing contracts.
He cited Norway’s oil model as an example of how nations can retain ownership of resources while leveraging private expertise to manage production efficiently.
“In Norway, the state remains the owner and reaps the lion’s share of the benefits. Ghana must do the same if we are serious about building generational wealth,” he said.
Prof. Oquaye also advocated the establishment of a Ghana Minerals Corporation, a state-led investment body that would manage national resource equity, negotiate contracts, and ensure local participation in the extractive sector.
Such an entity, he argued, could serve as a central vehicle for wealth retention, revenue diversification, and reinvestment in productive sectors like energy, manufacturing, and infrastructure.
Economic and Business Implications
Economists and policy analysts at the event agreed that the royalty system has limited Ghana’s fiscal flexibility and undermined value addition in key sectors. With royalties tied to production volume rather than profitability, the government’s revenue intake fluctuates with commodity prices exposing the economy to market volatility.
An ownership-based model, they argued, could increase state earnings by 50–70% from major mining and oil ventures, improve investor accountability, and drive local content development.
For Ghanaian businesses, Prof. Oquaye noted, the transition would open new opportunities for joint ventures, local subcontracting, and technology transfer, particularly in refining, logistics, and downstream processing. “Ownership means participation and participation means growth,” he emphasised.
Reclaiming Economic Sovereignty
Linking resource governance to Ghana’s broader macroeconomic stability, Prof. Oquaye said overreliance on royalties had weakened the nation’s fiscal independence and deepened its dependence on International Monetary Fund (IMF) bailouts.
He argued that sustainable development required harnessing resource wealth for long-term investment rather than short-term revenue collection.
“We cannot continue to borrow externally when our gold, oil, and lithium can fund our own industrial transformation,” he added.
