Nationalising Mines Won't Boost State Cash Automatically Economist Warns

Ghana's state coffers will not automatically grow richer by nationalising its mines. This is the main message from Wisdom Puplampu, a mineral economist at the Minerals Commission. He spoke at a recent JoyBusiness Roundtable about Ghana's mining sector. Mr. Puplampu believes taking over mines would not be the quick solution for more money. Instead, he stressed the need for smarter reforms and stronger ways to fund local businesses in mining. Ghana already has rules, called local content regulations. These rules allow mining firms to list shares on the stock market. This helps them raise money. But Mr. Puplampu said the stock market alone is not enough. Large mining projects need much more money than exchanges can provide. He said Ghana needs a "hybrid approach." This means mixing money from banks. It also means using money from selling shares of companies. Mr. Puplampu also wants the National Pensions Regulatory Authority to help. He suggested they could allow pension funds to invest in mining company shares. Pension funds are called "patient capital." This type of money is good for long-term projects like mining. It can help local firms grow stronger. "And if we adopt the hybrid approach, we’ll be able to make some significant impact," he added. He also said Ghana must keep attracting foreign investment. Partnerships between Ghanaian companies and foreign investors are very important. These partnerships help the sector grow steadily. Mr. Puplampu warned that talks about nationalising mines can scare investors. This uncertainty sends bad signals to people who want to invest money here. He explained that nationalisation alone does not guarantee more state money. Local mining companies already pay significant corporate income taxes. Data from the Ghana Revenue Authority shows this. These payments show that local companies are profitable. "Our local companies have done well when it comes to corporate income tax," he said. He warned that if the government takes over mines. And if it cannot run them well, Ghana could lose money. The state might lose the corporate income taxes paid now by private companies. "What that means is that government or the state will not be able to capitalise, but will be losing out on corporate income tax," he explained. This tax is a large source of income from mining.