In a bid to reform the scrap metal industry, the Ghana Integrated Iron and Steel Development Corporation (GIISDEC) is set to implement mandatory licensing for scrap dealers by the end of the year. This strategic move aims to inject structure, transparency, and accountability into a sector that has become increasingly critical to the nation’s construction and manufacturing ecosystem.
The new licensing framework currently under development in partnership with the Ministry of Local Government and the Attorney-General’s Department will require all stakeholders in the scrap metal value chain to register under a formal oversight system. This includes collectors, middlemen, processors, exporters, and buyers.
“The whole scrap industry will be regulated, and people will need a license before they can operate,” said Williams Okofu-Dateh, Chief Executive Officer of GIISDEC, in an interview with the media.
The scrap metal sector, a multibillion-cedi industry, serves as the backbone of Ghana’s steel production, particularly in the absence of commercially viable iron ore reserves. Local steel manufacturers depend almost entirely on scrap to produce key materials such as iron rods and anvil bars cornerstones of Ghana’s booming construction sector.
Despite its economic significance, the industry remains predominantly informal and undocumented, creating an environment ripe for malpractice.
“We don’t know who is collecting what or selling to whom. Anyone can just walk up to a facility and buy scrap metal with no questions asked. As a result, people are stealing drain covers, electrical components, and even dismantling machinery under the guise of scrap.” Mr. Okofu-Dateh noted.
In addition to theft of critical infrastructure, the safety and environmental implications of current practices are severe. Overloaded and unsecured scrap-laden trucks pose hazards on public roads, while the open-air burning of wires to retrieve copper has led to dangerous levels of air pollution and health risks in residential areas.
GIISDEC’s regulatory push is as much about economics as it is about order. According to the agency, the current lack of oversight has led to widespread tax evasion, with many operators paying only nominal municipal fees. The new licensing system is expected to improve tax compliance, enabling the government to recoup millions in lost revenue and ensure proper traceability throughout the supply chain.
“We need to know who adds value to steel materials, who collects, who processes, and where it all ends up. Licensing will also help us monitor pricing practices, protect dealers from exploitation, and ensure compliance with health and safety standards.” Mr. Okofu-Dateh said.
Tackling the Export Conundrum
The export segment of the industry is also under scrutiny. With some scrap being smuggled out of the country through informal channels, local steel manufacturers are being deprived of essential raw materials. Others are importing scrap from neighbouring countries such as Côte d’Ivoire without adequate checks or records. GIISDEC aims to halt these irregularities by mandating that all domestic and international scrap transactions be carried out through licensed entities.
A multi-stakeholder committee is being established to design the modalities of the licensing system. While no fixed timeline has been publicly announced, GIISDEC anticipates that legal and institutional groundwork will be completed in time for the policy to take effect before the end of the year.
Beyond Scrap: Building an Integrated Steel Ecosystem
The agency is also considering registering large-scale users of scrap metal, including metal fabricators and machinery part dealers, to ensure that all materials in circulation are traceable to legitimate sources.
The licensing initiative aligns closely with GIISDEC’s founding mandate set by an Act of Parliament in 2019 to promote and develop an integrated iron and steel industry in Ghana. Given the strategic reliance on scrap as the only locally available input for steel production, regulation of the sector is seen as a foundational pillar of the broader industrialisation agenda.
“The scrap business is not just a side hustle. It is the backbone of our steel industry, but right now, we are leaving this critical sector in the hands of amateurs. That has to change.” Mr. Okofu-Dateh affirmed.
