GHEITI: Fiscal uncertainty, not royalties, biggest threat to Ghana’s mining investment

The Ghana Extractive Industries Transparency Initiative (GHEITI) has warned that the biggest threat to Ghana’s investment attractiveness in the mining sector is the lack of fiscal predictability and certainty, which are essential for long-term planning.

The statement follows concerns raised by the Ghana Chamber of Mines that the government’s proposed sliding-scale royalty regime of 5% to 12% on gross mineral revenue could worsen the investment climate, potentially leading to reduced capital inflows, stalled projects, and job losses.

In a statement issued on Monday, January 20, the Chamber acknowledged the government’s objective of increasing national benefits from the mining sector amid high global gold prices. However, it cautioned that the proposed royalty structure risks undermining the growth needed to sustain long-term revenues.

Responding to the concerns, GHEITI said the newly prescribed mineral royalty is not necessarily the biggest threat to investment attractiveness in the sector.

In a statement issued on Friday, March 13, GHEITI said the greater concern is the lack of policy stability.

“GHEITI wishes to point out that the biggest threat to Ghana’s investment attractiveness is not necessarily the newly prescribed mineral royalty, but fiscal predictability and certainty, which are essential for long-term planning,” the statement said.

It added that the sudden introduction of the Growth and Sustainability Levy (GSL) without prior consultation with industry disrupted corporate investment planning.

According to GHEITI, the continued application of the 3% Growth and Sustainability Levy on gross production, alongside the proposed royalty regime, could significantly increase the fiscal burden on mining companies.

“At 3% of gross production — approximately 4.6% when expressed in royalty equivalent terms due to its non-deductibility — the continued application of the GSL alongside the new royalty regime would significantly increase the fiscal burden on gross production, raising it to **over 16%, a level that is unprecedented in global mining fiscal regimes,” the statement said.