Ghana’s Gold Windfall Is a Test of Discipline, Not an Invitation to Spend

Ghana’s renewed mineral boom is offering the country a rare moment of economic breathing space. Strong global gold prices have helped stabilise the cedi, ease inflationary pressures, and improve headline macroeconomic indicators. But according to the Chief Executive Officer of the Ghana Chamber of Mines, Ken Ashigbey, this is precisely the moment when discipline matters most.

Speaking on Joy News’ PM Express Business Edition, Mr Ashigbey warned that Ghana must resist the temptation to exhaust its mineral windfall and instead adopt a deliberate strategy that saves, invests, and smooths revenues over time.

“Eating on a constant and continual basis is better than eating one large meal once,” he said, cautioning against what he described as an “Esau mentality” — the pursuit of immediate gains at the expense of long-term national interest.

A Boom That Will Not Last Forever

Gold prices, like all commodity cycles, are inherently volatile. While the current surge has brought short-term relief, Mr Ashigbey stressed that such conditions are temporary and largely outside Ghana’s control.

“This phenomenon is a short-term phenomenon,” he said. “You don’t take decisions that are long-term in nature just based on the phenomenon.”

He argued that the country’s task is not simply to enjoy the boom, but to ride it intelligently — using today’s gains to protect tomorrow’s economy.

“What you want to do is ride this particular wave in such a way that it extends you beyond the moment,” he said.

Fair Taxation, Not Fragile Policy

The Chamber of Mines, Mr Ashigbey emphasised, is not opposed to taxation. What it resists is fiscal rigidity that undermines sustainability.

“We are all open to fair taxation,” he said.

When government proposed changes to mining royalties, the Chamber responded with a counter-proposal aimed at balancing state revenue needs with industry viability. Rather than sharp upward adjustments tied only to high prices, the Chamber proposed a sliding royalty regime between 4% and 8%, allowing royalties to move both upward and downward with market conditions.

The proposal also calls for the removal of the Growth and Sustainability Levy and the introduction of a 1% net-profit contribution to a dedicated development fund for mining communities.

This structure, Mr Ashigbey explained, ensures that the state benefits during price booms while protecting production, employment, and output when prices fall.

“It’s not that you are only sliding up,” he said. “You are sliding both up and down.”

Communities Must See the Boom

A central pillar of the Chamber’s proposal is visibility. Mining communities, Mr Ashigbey argued, must be able to point to concrete development outcomes during periods of high commodity prices.

“When gold prices hit the roof, people should be able to say we were able to do this project and that project,” he said.

The proposed development fund would support infrastructure and social investment in mining areas while avoiding permanent fiscal commitments that outlive the boom itself.

Production Matters as Much as Price

Mr Ashigbey stressed that sustainable mineral revenue is not driven by prices alone. Royalties are calculated based on price, volume, and rate, meaning that policies which weaken production ultimately reduce long-term government earnings.

“If you are able to keep the price up and still keep the volumes up,” he said, “then what you get on a sustainable basis would be better.”

This, he argued, is why predictability and balance in fiscal policy are essential to keeping mines operational and encouraging expansion during favourable cycles.

Bringing Small-Scale Mining Into the Fold

Beyond large-scale mining, Mr Ashigbey called for the full integration of small-scale miners into the formal revenue system. The sector now produces more than half of what large-scale mines generate, yet remains lightly taxed and regulated.

“When the percentages are right, they would also be able to put a bit into the kitty,” he said.

Broadening the tax base, he argued, would allow government to raise more revenue without overburdening any single segment of the industry.

The Bigger Question: What Is Ghana Doing With the Gains?

Ultimately, Mr Ashigbey said the debate must go beyond how much Ghana earns from mining to how those earnings are used.

“As things are better now, what are we doing with the wins that we’re getting?” he asked.

He questioned whether the country is saving for future downturns or investing in productive sectors that can outlast the mining cycle.

While welcoming government’s intention to channel mineral revenue into major initiatives such as the Big Push infrastructure programme, he insisted that saving must remain central.

“We need to get to the point where we have a Minerals Revenue Management Act,” he said.

Why a Minerals Revenue Management Act Matters

Such legislation, Mr Ashigbey explained, would guarantee structured savings into a stabilisation fund during boom periods, providing a buffer when commodity prices fall.

“So that tomorrow, when things are not good, you are able to recover,” he said.

He warned that Ghana’s current macroeconomic stability — including a strong cedi, easing inflation and improving interest rates — is still heavily dependent on global commodity prices.

“All of that is predicated on commodity prices,” he noted. “And we don’t control that.”

Investing Beyond the Mine

Looking ahead, Mr Ashigbey urged policymakers to channel mineral gains into forward-looking sectors, particularly commercial agriculture, that can drive long-term economic transformation.

“When you hear talk about investing in commercial agriculture,” he said, “how are we moving today’s gains into things that are a lot more forward-looking?”

The aim, he stressed, is not to deny Ghanaians the benefits of the current boom, but to ensure those benefits endure.

“We’re not saying we shouldn’t benefit,” he said. “But let’s live and let live, so that everybody gets.”

Source: Accra Business News