Ghana Moves to Balance Investment and Revenue with Proposed Gold Royalty Reforms
Ghana, Africa’s leading gold producer, is taking a fresh step to reshape its mining fiscal framework as it seeks to maximise national revenue while maintaining investor confidence in the sector. In a bid to ease industry concerns, the Minister for Finance has proposed cutting the Growth and Sustainability Levy on mining companies by two percentage points, a move aimed at building consensus around a major overhaul of the country’s gold royalty regime.
The proposed reforms would see Ghana replace its long-standing flat gold royalty rate with a sliding scale ranging from 5% to 12%, allowing the state to capture a greater share of earnings as global gold prices rise. Under the new structure, royalty payments would increase by approximately one percentage point for every US$500 increase in the gold price, ensuring government revenues rise in tandem with market gains.
According to Reuters, the new royalty framework is expected to take effect 21 days from Tuesday unless parliament intervenes, marking a significant shift in Ghana’s mining policy landscape. The system is modelled on a similar framework adopted in Burkina Faso and reflects Ghana’s broader strategy to secure more value from its mineral resources during a period of sustained high commodity prices.
The policy adjustment comes amid a wider recalibration of Ghana’s mining sector. Authorities have already scrapped several long-term mining agreements and raised royalty rates on gold output, signalling a clear intent to claim a larger share of windfall revenues generated by the global gold price surge.
Industry Pushback and Ongoing Negotiations
Mining companies, however, have expressed reservations about the pace and scale of the proposed changes, warning that sharply higher royalties could dampen investment, particularly for higher-cost and marginal operations.
Speaking on behalf of the industry, Chief Executive Officer of the Ghana Chamber of Mines, Kenneth Ashigbey, confirmed that the finance minister, Cassiel Ato Forson, made the levy reduction offer during recent engagements with mining stakeholders.
“We asked that the 3% Growth and Sustainability Levy be removed entirely, but the minister is offering to cut it by two percentage points,” Ashigbey said.
The levy, which was doubled to 3% last year, has been a key point of contention between miners and government. Mining firms initially withheld payment following the increase, before later complying as negotiations continued, according to the sector regulator.
On the proposed royalty framework, Ashigbey noted that mining companies are advocating for a narrower sliding scale of between 4% and 8%, rather than the government’s proposed 5% to 12%. The industry is also calling for one percentage point of the royalty to be ring-fenced for a development fund dedicated to supporting mining host communities.
Additionally, the chamber is pushing for wider gold price bands, arguing that the current thresholds could trigger higher royalty rates too quickly, potentially squeezing operations with thinner margins.
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Part of a Continental Shift
Ghana’s proposed reforms mirror a growing trend across Africa, where governments are tightening oversight of strategic mineral resources to extract greater value amid elevated commodity prices. As negotiations continue, the challenge for Ghana will be striking the right balance between maximising public revenue and sustaining long-term investment in one of the country’s most critical economic sectors.
