Fiscal stability critical for mining investment

The Chief Executive of the Ghana Chamber of Mines, Kenneth Ashigbey, has warned that rising taxes and levies risk undermining Ghana’s competitiveness as a mining destination, arguing that long-term investors require stable and predictable fiscal regimes before committing capital to major projects.

Speaking in an interview on Graphic Online TV, Mr Ashigbey said the capital-intensive nature of mining meant investors assessed projects over decades rather than short political or commodity cycles.

“The mining industry is capital-intensive and long-term. Investors need certainty,” he said.

While acknowledging the government’s need to mobilise revenue, he cautioned that excessive fiscal pressure could discourage both foreign and domestic investment at a time when African mining jurisdictions are increasingly competing for capital.

“We need to find other ways of extracting value from the mining sector without necessarily making Ghana uncompetitive,” he said.

Mr Ashigbey argued that the cumulative effect of royalties, corporate taxes and sector-specific levies had pushed the government’s effective share of mining profits beyond internationally competitive levels.

“At today’s gold prices, your royalties could move to about 12 per cent. When you add other levies and corporate income tax, the government is taking over 60 per cent of the profits that come out of mining,” he said.

Shift to manufacturing

Beyond fiscal policy, Mr Ashigbey said Ghana’s local content framework needed to evolve from an import-based participation model towards domestic manufacturing and industrial value addition.

He argued that local participation should no longer be measured simply by Ghanaian ownership of import businesses supplying the mines, but by the extent to which mining inputs and industrial products are manufactured within the country.

“What we need to be doing now is moving local content into manufacturing,” he said.

“If you have grinding media that is made in Ghana, it could be made by a foreigner, but once it is manufactured in Ghana, that should qualify as local content.”

According to him, Ghana has already made progress in increasing local participation in mining-related services, but the next stage of policy development should focus on building industrial capacity around the sector.

He called for deeper collaboration between local firms and global original equipment manufacturers to establish production, assembly and servicing facilities in Ghana, arguing that such partnerships could strengthen industrial capability while positioning the country as a regional mining services hub.

Mr Ashigbey pointed to emerging partnerships between mining equipment suppliers and local businesses as evidence that Ghana could build an ecosystem capable not only of serving domestic mines but also exporting products and technical services to neighbouring mining economies.

Mining as industrial catalyst

The Chamber chief executive said Ghana should increasingly view mining not simply as a source of royalties and export earnings, but as a foundation for wider industrialisation and economic transformation.

“We believe that mining should be positioned as the catalyst for industrialisation and development,” he said.

After decades of mineral extraction, he argued, the central policy question should now be how mining can generate enduring economic value beyond the life of the country’s mineral reserves.

“The chance is to use mining as a catalyst for industrialisation, enterprise growth and economic transformation,” he said.

According to Mr Ashigbey, the scale of procurement spending within the mining sector provides a substantial opportunity to develop local manufacturing industries capable of supplying goods and services to mining companies.

“If you are able to situate industrial policy on mining, you would be able to build industries that supply the mines and create value that would outlive the minerals themselves,” he said.

Procurement as bigger opportunity

Mr Ashigbey argued that the broader economic value of mining may lie less in direct tax revenues than in the sector’s procurement ecosystem, where companies spend heavily on equipment, engineering, logistics and industrial services.

“If you look at the financials of most mining firms, you find out that the majority of the spending stays more at the services that are provided than the royalties and taxes that we take,” he said.

That, he argued, should push policymakers to place greater emphasis on building domestic industrial capacity capable of capturing a larger share of mining-related spending within the local economy.

He cited South Africa as an example of a country that had successfully developed industrial ecosystems around mining through manufacturing, engineering and technical services.

For Ghana, the debate increasingly centres on whether mining can evolve from an enclave extractive industry into a broader platform for industrial development.

The challenge for policymakers will be balancing the immediate pressure for higher fiscal revenues against the longer-term goal of building competitive industries that can survive beyond the commodity cycle.