The Ghana Chamber of Mines says the fallen gold prices on the world market requires Ghana to utilize its mineral revenue in a manner that will yield the best returns both at the national and sub-national level.
Speaking at the fifth Mining for Development Forum in Accra, Sulemanu Koney, Director of Analysis, Research & Finance at the Chamber of Mines, said should the price of gold continue its slide, the consequences would be dire for the Ghanaian economy.
“As was seen in the aftermath of the thaw in the price of gold in 2013, government revenue from the mining industry was adversely impacted, and so were other stakeholders who benefited from the sector-in particular, employees, suppliers, and host communities,” he said.
The event on the theme: “Revenue Utilisation Amidst Declining Market Prices” was attended by stakeholders, including members of Parliament, to discuss the strategic partnerships that exist between the mining industry and government, and to address adverse perceptions about the mining industry.
Although the price of gold seems to have stabilized since the beginning of the year at a cumulative average of about US$1,293 per ounce, although many expect the price of the precious metal to remain around US$1,300 per ounce in 2016.
He said government’s receipts from the mining industry, which are mainly from corporate taxes and royalties, are highly dependent on the price of gold, adding that although revenue was good, it was not sustainable, especially in the face of fallen gold prices.
Emmanuel Kuyole, African Regional Coordinator, Revenue Watch Institute, called for a mineral revenue management law to ensure that the resources are well utilized for development.
He also asked government to think of benefit management rather than tax revenue, and called for guidelines for the utilization of royalties in the communities.
Besides, there is the need for a holistic exploitation to ensure the benefit to the economy.
Australian High Commissioner in Ghana, Joanna Adamson said mining could be a catalyst for wealth creation when well managed.