Ghana risks losing major mining investments to neighbouring countries, notably Côte d’Ivoire, because of its current fiscal regime. The government’s share of mining profits is already at the International Monetary Fund’s (IMF) upper threshold of 60%, dampening investor appeal.
This aggressive competition from Côte d’Ivoire directly challenges Ghana's long-standing position as a leading gold producer in Africa. High royalty rates, increasing from 5% to 12%, significantly elevate production costs for mining companies. This makes Ghana less attractive compared to competitors like Côte d’Ivoire and Guinea, which offer more favourable conditions.
Ghana’s mining sector has historically benefited from political stability and investor-friendly laws. However, these advantages are now being matched by Côte d’Ivoire, which seeks to become Africa’s leading gold producer in the next decade. This rivalry is particularly critical for Ghana’s economy, as gold remains a primary export and a significant contributor to government revenue. The declining attractiveness for foreign direct investment in this crucial sector could affect job creation and overall economic growth.
Ken Ashigbey, CEO of the Ghana Chamber of Mines, highlighted these concerns. Speaking on PM Express Business Edition, he warned that the shift is already happening, not just a future threat. Mr. Ashigbey cited a specific instance where a mining firm sold a property in South Sudan. The company initially intended to bring the resource into Ghana for projects. However, that GHS multi-million investment moved to Côte d’Ivoire due to Ghana's less friendly fiscal regime. He explained that if investors see over 60% of their profits taken by Ghana’s government, they will choose countries taking less.
The implications for Ghana are immediate and substantial. The nation could see a significant reduction in foreign direct investment in mining. This would lead to lower gold production and reduced export earnings. Decision-makers must reconsider the fiscal regime to ensure Ghana remains competitive in the global mining industry. Failure to act could result in Côte d’Ivoire surpassing Ghana in gold output, fundamentally changing the regional economic landscape. The government needs to balance revenue generation with attracting and retaining mining investments. This balance is critical for Ghana’s long-term economic stability and growth.