The mining industry in Ghana contributes significantly, more than its fair share, to the country’s fiscal revenue, raising concerns over the sustainability of current tax policies and their impact on future investments. This is according to Michael Akafia, President of the Ghana Chamber of Mines and Vice President for External Affairs, Gold Fields West Africa.
Speaking with The High Street Journal, Akafia emphasized that while the sector contributes largely to government revenue, the effective fiscal burden on mining companies ranges between 45 and 55 percent. He cautioned that surpassing the 55 percent threshold could deter new investments and hinder growth.
“Contrary to some of the perceptions out there, the mining industry is contributing more than its fair share to the fiscal burden of our country,” Akafia said. “The 55 percent threshold is at a point where if you go beyond it, it then becomes a big barrier to investments in your industry.”
Akafia further explained that this heavy tax load has already led to a loss of exploration investments to neighboring countries with more competitive fiscal regimes. Since exploration activities form the pipeline for future mining projects, this trend threatens the long-term sustainability of Ghana’s mining industry.
“If you lose out on exploration, it means you cannot have a sustainable mining industry like we are designed to have,” he noted. “Managing the fiscal regime carefully is essential to ensuring long-term viability while still contributing to government revenue.”
The Chamber of Mines advocates for a balanced fiscal approach that maintains government revenue without discouraging investment and exploration critical to the sector’s future.
