‘Insecurity, high fiscal burden crippling mining sector’
By Isaac AIDOO, Accra
INSECURITY at the mines and a tough fiscal regime among other challenges are crippling Ghana’s mining sector and making it unattractive for investors.
The Ghana Chamber of Mines maintains that relative to its peers in the sub region, Ghana has a high tax regime for both exploration and operating mines.
President of the Chamber, Mr Joshua Motorti lamented the impact of what he described as a ‘high fiscal burden’ on players in the mining sector, in spite of the tremendous contribution the sector makes to the Ghanaian economy.
Speaking to editors of some media houses in Accra, Mr Motorti lamented, “there is no compelling case for investors to come here; as we speak, Ghana has only three exploration companies operating; Our pipeline of projects is empty; our pipeline of projects for the future, the future mines that will develop some 10 to 15 years to come are not there ”
According to Mr Motorti, about 50% of mineral rich countries in Africa have lower tax rates compared to Ghana , in terms of royalty rates, Free Carried Interest, Corporate Income Tax . About 40% are at par with Ghana while 10% including countries like the Democratic Republic of Congo (D R C) have higher tax rates than Ghana.
Mr Motorti pointed out that DRC had a compelling geology and no other country in Africa comes anywhere close to DRC in terms of geology so they can probably have those high rates and still get investors trooping there.
“If DRC was half as peaceful as Ghana, I bet you everyone would go there and no one would come to Ghana,” Mr Motorti said.
Insecurity at mines, a major headache
Recent disturbances at the mines and their environs are making the investor community nervous, especially with the seeming lack of consequence for the perpetrators.
Positioning sector to catalyse, enhance local content
The Chamber reiterated its calls for the mining industry in Ghana to be positioned “as a catalyst to enhance local content as well as integrate the sector into the non-mineral economy.”
“Mining is about sustainable development and not just rent-we should focus on harnessing the full benefit, beyond the direct fiscal contribution,”
Fiscal regime burdening sector
The Chamber called for a review of the existing fiscal regime to make it more business friendly.
“To enhance the mining sector’s competitiveness, the Chamber called for an input impost exemption regime for exploration firms and the review of the framework and application of the Growth and Sustainability Levy,”.
