There are several barriers to investment in Ghana’s mining industry, which may enhance the sector’s overall contribution to the country’s economy.
The robustness of Ghana’s mining industry shows no indications of deterioration. Gold production in South Africa increased by 20 percent annually between 2013 and 2020, making it Africa’s top producer and the world’s sixth-largest producer. As a result, it is the country’s third most prominent industry. It was a significant draw for Foreign Direct Investment during the economic recovery of the 1980s and a driving force behind the nation’s growth. Because of the enormous demand for products and services it generates for local businesses, it has now become the economy’s backbone and is linked with almost every other economic sector.
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The mining industry has historically been Ghana’s most important export area, with gold (which accounts for 97% of the country’s mining income), manganese, bauxite, and diamonds contributing significantly. In addition to being a significant source of tax revenue (an average annual increase of around 27% over the past decade was collected), it is the country’s largest export industry, consistently outpacing the other major export sectors in terms of GDP contribution.
As long as mining draws new investors, especially those in Russian and Chinese markets, it is essential to note that many long-standing roadblocks prevent further substantial investments from being made. Although the nation is a potential producer of various resources and can conduct mineral exploration for industrial and energy-related minerals, this is the case (iron ore, lithium, limestone, feldspar).
Annual mining rights fees, processing fees, search permit expenses, and ground rent all add up. Ghana is the most expensive nation in the subregion to own land for exploration. The VAT imposed on exploration expenses is partly to blame for reduced investment in exploration – and this is critical for the long-term sustainability of output.