Amidst the government’s spirited agenda to promote indigenization in the country’s mining sector, the General Secretary of the Ghana Mine Workers Union (GMWU), Abdul Moomin Gbana, is cautioning against the unchecked implementation of the agenda.
Abdul Moomin Gbana says, given the current state of the mining sector and how local businesses are generally run in the country, the move, if not measured, could spell doom for the sector.
Although he welcomes efforts to deepen Ghanaian ownership, Gbana insists that the current business environment is not ready to support such a transition without serious consequences for workers and the economy.
The administration of President John Dramani Mahama has announced its intention to increase local participation in the country’s mining sector. He believes the move will return the country’s natural resources into the hands of Ghanaians and will enable citizens to enjoy the benefits of the resource endowment over foreign dominance.
As part of the agenda, the government has signalled that local participation or ownership will be ensured in all mining leases that expire.
But Gbana says it is a very slippery road that the government needs to be extra cautious about.
In an interview with Accra-based JoyNews, the General Secretary painted a grim picture of the possibilities of what could happen to workers and national revenues when formerly multinational-operated mining firms are taken over by local entities.
He revealed instances where workers’ conditions of service have worsened, with some businesses failing to pay salaries, social security contributions, and even basic taxes.
“If you have a situation where Ghanaian businesses get into the mining space, they are unable to meet their short-term obligations, i.e. payment of salaries, payment of social security or pensions, I mean virtually it appears that the conditions of service of these workers have been reversed, relative to when they were with a foreign multinational businesses. As a trade union leader, I certainly will not opt for a local business because why would I see fire and walk into it? I wouldn’t do that,” he indicated.
For him, the issue is not about local ownership versus foreign ownership. It is about economic realism and worker protection. Gbana explained that local participation must go hand-in-hand with strong corporate governance, access to cheap capital, and enforcement of compliance standards, elements he argues are currently lacking.
“Ghanaian participation in the space has to be watched carefully because if we don’t watch it carefully and we proceed in that direction, we might end up getting our fingers burnt,” he added.
He called on the government to create a liberal and enabling environment that strengthens private sector capacity and safeguards workers before pushing aggressive local ownership policies.
He added: “We expect a more liberal environment until such time that government itself pays a lot more attention, is able to streamline the system, get private businesses to sit up, comply with corporate governance rules, we are able to make available to private businesses cheap capital. Not until we get to that point, I can assure you that it will be a difficult place to go.”
The General Secretary is therefore convinced that worker welfare, economic stability, and national revenue cannot be sacrificed on the altar of the quest for local participation. The government, he insists, must slow down and build the necessary support structures before handing over more of Ghana’s mining sector to domestic players.
