Tracking ghana's mineral wealth: a revenue management act in the mining sector key


Ghana's mining industry is said to account for 5-10% of Gross Domestic Product, GDP and represents not less than 40% of total exports. Gold alone contributes about 90% to total minerals export making Ghana the second largest gold producer in Africa and number ten in the World. 


These statistics should give an outright indication to anyone across the globe of a wealthy, highly developed country, with little or no developmental challenges.  This unfortunately is not so due to the highly complex and inefficient revenue sharing module, made worse by poor public financial management. 

The current fiscal structure operating under the Minerals Development Fund (MDF) Act 2016, (Act 912) is challenged with the lack of strong oversight, comparative to the oil sector regime under the Petroleum Revenue Management Act, PRMA, establishing the Public Interest and Accountability Committee, PIAC. 

According to a tax consultant Abdallah Ali-Nakyea, though the MDF is one of a number of legal and policy framework for managing mining in Ghana, the rules governing mineral revenue management are particularly not determined.


"This accounts for why the expected social and economic returns from mining revenue are not being realised." He said this when he delivered a presentation on addressing the shortfalls in mineral revenue management in the country, at a two-day workshop for members of the Institute of Financial and Economic Journalists, IFEJ in partnership with GIZ in Koforidua.


Mr. Nakyea who has over the years advocated various tax reforms to improve revenue generation for the state, with notable mention of a systematic property tax regime for Ghana, also proposed the enactment of a comprehensive mineral revenue law similar to the PRMA to replace the Minerals Development Fund Act, 2016, (Act 912), taking into consideration the peculiar context of mining.


"Our proposal here is to enact a new and comprehensive law that will replace Act 912, and regulate the collection, allocation and management of all mineral revenue derived from mining operations in Ghana," he maintained.


Mr. Ali Nakyea said a body similar to PIAC under the PRMA should be established with funding benefits as well as prosecutorial and surcharge powers as an additional oversight layer for mining revenue. Alternatively, he said the mandate of PIAC could be reviewed to handle this function as well.



The tax expert further indicated that, "there should be clear rules and procedures on when, where and how the revenues in designated funds or accounts are allocated, and same should be subject to parliamentary approval."


Among a number of key transparency and accountability measures, he said similar to the PRMA, the management bodies of revenues allocated to the District Assemblies and stool lands should be required to report quarterly and annually to the Ministers of Finance and Lands and Natural Resources, as well as the Auditor General and PIAC on mineral production, receipt and sales price on project-by-project basis. 


On benefit sharing and efficient spending, Mr. Abdallah Ali-Nakyea strongly proposed that the law and its regulations should spell out rules and procedures to govern disbursement of mineral revenues at the district and community levels to prevent spending on recurrent items to the disadvantage of capital infrastructure.



Story by: Nana Agyeman-Prempeh


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