Ghana’s finance minister has offered to reduce a mining levy by two percentage points in an effort to secure industry support for a proposed overhaul of the country’s gold royalty system, a move mining companies warn could deter investment.
Africa’s largest gold producer plans to replace its flat royalty rate with a sliding scale ranging from 5% to 12%, allowing the state to earn more as global gold prices rise.
Under the proposal, which is modelled on a system used in Burkina Faso, royalty payments would increase by about one percentage point for every $500 rise in the gold price. Unless parliament amends the plan, the new royalty regime is expected to take effect 21 days from Tuesday, according to Reuters.
The proposed changes come as Ghana restructures its mining sector amid a sharp increase in global gold prices. Authorities have cancelled several long-term mining agreements and raised royalties on gold production, signalling a broader strategy to capture a larger share of windfall revenues from commodities.
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Mining companies have pushed back against the higher rates. Kenneth Ashigbey, chief executive of the Ghana Chamber of Mines, said Finance Minister Cassiel Ato Forson offered to cut the Growth and Sustainability Levy during recent talks with industry representatives. “We asked that the 3% levy be removed entirely, but the minister is offering to cut it by two percentage points,” Ashigbey said.
The levy was doubled to 3% last year, prompting mining firms to initially withhold payments before eventually complying as negotiations continued, according to the sector regulator.
On the proposed royalty framework, Ashigbey said miners are advocating for a narrower sliding range of 4% to 8%, with one percentage point set aside for a development fund to support host communities.
He added that the chamber is also calling for wider price bands, arguing that the government’s current thresholds trigger higher royalty rates too quickly and could place pressure on higher-cost or marginal operations.
Ghana’s policy shift mirrors a wider trend across Africa, where governments are tightening control over strategic mineral resources to extract more value as commodity prices remain elevated.
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Image Credit: Business Insider Africa
