Why Ghana Needs a Minerals Revenue Management Act Before the Gold Boom Fades

Ghana is once again enjoying the benefits of high global gold prices. The cedi has stabilised, inflation is easing, and macroeconomic indicators are trending in the right direction. Yet beneath this apparent calm lies a familiar vulnerability: the country’s heavy dependence on commodity cycles it does not control.

It is against this backdrop that the Chief Executive Officer of the Ghana Chamber of Mines, Ken Ashigbey, has renewed calls for the urgent introduction of a Minerals Revenue Management Act — a framework designed not for today’s boom, but for tomorrow’s downturn.

Speaking on Joy News’ PM Express Business Edition, Mr Ashigbey cautioned that without clear rules on how mineral windfalls are saved, invested, and spent, Ghana risks repeating its long history of boom-and-bust fiscal management.

The Danger of Short-Term Comfort

Commodity booms have a deceptive quality. When prices are high, revenues flow easily, pressure mounts for increased spending, and governments are tempted to assume favourable conditions will last. But history suggests otherwise.

As Mr Ashigbey noted, Ghana’s current macroeconomic stability is largely price-driven.

“Yes, the macros are very good,” he observed, citing improvements in exchange rates, inflation, and interest rates. “But all of that is predicated on commodity prices. And we don’t have control over it.”

Gold prices, like all commodities, are volatile. Decisions made during peak cycles often become liabilities when prices retreat. The Chamber’s warning is therefore not ideological, but practical: temporary market conditions should not define permanent fiscal policy.

Using a simple but powerful metaphor, Ashigbey argued that consistent nourishment is better than one extravagant meal — a reminder that sustainable public finance depends on discipline, not windfalls.

What a Minerals Revenue Management Act Would Do

The proposed Minerals Revenue Management Act would serve as a guardrail for mineral income, ensuring that gains during high-price periods are not entirely consumed in the moment.

At its core, the law would:

• Mandate savings into a stabilisation fund when mineral prices are strong

• Protect government spending capacity during price downturns

• Channel a portion of mineral revenues into long-term, productive investments

• Reduce fiscal volatility tied to global commodity shocks

Such a framework would mirror Ghana’s Petroleum Revenue Management Act, which was designed to prevent oil revenues from destabilising the economy. Mining, which has been central to Ghana’s economy for over a century, has long lacked a comparable structure.

Without it, mineral revenue continues to be treated largely as ordinary income — vulnerable to political cycles and immediate budget pressures.

Taxation Is Not the Enemy — Rigidity Is

The Chamber of Mines has been careful to clarify that it is not opposed to taxation. On the contrary, it supports fair and predictable fiscal contributions from the mining sector.

What it challenges is rigidity.

Following government’s proposed Legislative Instrument on royalties, the Chamber submitted a counter-proposal advocating a sliding royalty regime that adjusts both upward and downward with gold prices.

Under this model:

• Royalties would rise when prices surge, increasing state revenue

• Royalties would decline when prices fall, protecting production and jobs

• The system would adjust automatically, reducing policy uncertainty

The Chamber proposed a royalty range of 4% to 8%, replacing structures that only increase during booms and remain fixed during downturns.

As Ashigbey explained, sustainability comes from balance. When prices are strong and margins healthy, companies expand production. That expansion, in turn, generates more royalties over time.

Royalties, after all, are a function of price, volume, and rate. Undermining any one of these weakens the whole equation.

Community Development and Shared Gains

Beyond state revenues, the Chamber has also proposed a 1% net-profit contribution dedicated to development in mining communities.

The objective is straightforward: when gold prices rise, communities closest to the resource should see tangible improvements — roads, schools, clinics, and water systems.

This approach helps address long-standing grievances around extractive industries, while linking commodity booms directly to visible social outcomes. It also strengthens public trust that mineral wealth is being shared, not merely extracted.

Broadening the Base: Small-Scale Mining Matters

A critical but often overlooked element of the discussion is small-scale mining, which now accounts for more than half of the output of large-scale operations.

Mr Ashigbey has argued that Ghana cannot continue to rely almost exclusively on large-scale mines for mineral revenue mobilisation while lightly regulating the small-scale sector.

Bringing small-scale miners into a structured tax and royalty framework would:

• Expand government revenue without overburdening large operators

• Improve regulation and environmental oversight

• Create fairness across the industry

Importantly, the Chamber believes that once rates are realistic and engagement is inclusive, small-scale miners are willing to contribute.

Saving Is the Missing Discipline

Perhaps the most important question posed by Ashigbey is not how much Ghana earns from gold, but what it does with the gains.

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

While he welcomed government’s plans to channel mineral revenues into major infrastructure under the Big Push agenda, he insisted that saving must remain central.

Stabilisation funds exist for a reason: to provide room to manoeuvre when external conditions deteriorate. Without disciplined savings, infrastructure spending risks becoming another cycle of expansion followed by fiscal stress.

Beyond infrastructure, Ashigbey urged that mineral windfalls be channelled into forward-looking sectors such as commercial agriculture — areas capable of transforming the economy long after commodity cycles turn.

A Narrow Window for Reform

Ghana’s gold boom will not last forever. The opportunity to design strong institutions during good times is often missed — and regretted later.

A Minerals Revenue Management Act would not prevent downturns, but it would ensure Ghana is better prepared when they arrive.

As Ashigbey put it, the goal is not to deny citizens the benefits of today’s prosperity, but to ensure those benefits endure.

“Let’s live and let live,” he said, “so that everybody gets.”

Source: Accra Business News