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Chief Executive Officer (CEO) of the Ghana Chamber of Mines, Mr Sulemanu Koney
Chief Executive Officer (CEO) of the Ghana Chamber of Mines, Mr Sulemanu Koney

Mining overtakes insurance in direct domestic revenue

The mining and quarrying industry recaptured its position as the leading source of direct domestic revenue and continues to improve in 2017 despite being displaced by the financial and insurance sector in 2015.

Data from the country’s fiscal authority, the Ghana Revenue Authority (GRA), shows that the total fiscal receipts attributable to the mining and quarrying sector increased from GH¢1.35 billion in 2015 to GH¢1.65 billion in 2016 and that represented a growth of 22 per cent.

The GRA’s statistics indicated that the extractive industry which has been one of the major sources of domestic earnings injected into the economy payments of GH¢399.9 million in PAYE tax, GH¢696.9 million in corporate income tax and GH¢550.7 in royalties, as well as GH¢0.54 million in other taxes.

The mining industry, until 2015, was the leading contributor to the nation’s fiscal purse.

Enforcing mining regulations

However, the umbrella body of mining companies in the country, the Ghana Chamber of Mines, at its 2016 annual report presentation to business and financial reporters in Accra, last Thursday highlighted the need for government to enforce regulations in the sector to further increase the nation’s gains from mining to champion national development.

The Chief Executive Officer of the Chamber, Mr Sulemanu Koney, who led the presentation, said the exercise of any mineral right requires, by law, a license to be granted by the minister for mines  who acts as an agent of the state for the exercise of powers relating to minerals. He said the strict enforcement of such regulations would augment government’s effort to eradicate illegal mining.

Mining exceeds oil and gas

The chamber indicated that the mining fiscal revenue outturn in 2016 represented approximately 16 per cent of direct domestic revenue mobilised by the GRA and five per cent of total government revenue including earnings from the oil and gas sector.

“The fiscal revenue performance of the mining and quarrying sector exceeded the oil and gas sector’s contribution of GH¢972.5 million reported in the 2017 Budget statement and Economic Policy,” the report indicated. 

The chamber’s report also suggested that the health of the external sector of the country’s relatively small and open economy is not only fundamental to currency movements and its pass-through effect on local price level but also the standard of living of the population.

“Therefore, proceeds from the exportation of minerals  play a critical role in ensuring a steady supply of forex to the financial intermediation system to settle liabilities denominated in foreign currency to meet the import demands of the country,” the report added.

New mineral discoveries

Meanwhile, the mining sector regulator, the Minerals Commission, says a recently completed Mining Sector Support Programme funded by the European Commission has led to the discovery of new minerals apart from the traditional ones such as gold, diamond and bauxite which are produced in the country.

 The new minerals, which are yet to be tapped, include phosphate, nickel, chromium and uranium. Their discovery, according to the commission, herald a new chapter in the country’s mining industry with several investment opportunities in the fields of mineral exploration and mining, as well as in the services and engineering support sectors. 

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