Abdul Hakim Ahmed, PhD.
My last article in the media, titled “The Economy, Corruption and Galamsey: The potentials and pitfalls of Mahama’s return to Ghana’s presidency”, was published on January 2, 2025 (five days before Mahama was sworn in as the new president) in the various online portals, including MyJoyOnline and Starrfmonline.
While I do not intend to thoroughly revisit the issues I raised in that article, at least for now, the current debate on the takeover of the Damang Gold Mine by Ibrahim Mahama’s Engineers and Planners (E&P) is too tempting to escape my attention. This is because the takeover of the gold mine speaks volumes of a quiet but effective improvisation and recalibration of the neoliberal architecture of Ghana’s economy by Mahama, his appointees, as well as a small team of unelected but practical individuals like Ibrahim Mahama, the president’s brother.
Many people are oblivious of the fact that since the 1983 Economic Recovery Programme (ERP), the national economy has been managed both in theory and in practice by neoliberal principles and “Washington Consensus” policies. Thus, through the logic of free market capitalism, privatisation, deregulation and trade liberalisation, almost all of Ghana’s important economic assets have been handed over to foreigners and foreign interests, particularly the mining and natural resource sector. This is mainly responsible for the present poverty, inequality, unemployment and hopelessness among the nation’s youth. This situation will persist unless urgent measures are taken through elite consensus to drastically reduce the stranglehold of foreign interests in the natural resource sector.
In my January 2, 2025, article, I made a prediction that one of the ways the Mahama government can avoid the fate of past governments is by thinking outside the box and doing what all of them have failed to do in the past regarding the building of a less dependent national economy. The first step in this regard is ensuring that Ghana gets a fair share of its natural resources, especially gold. I made the point that the current situation of surrendering almost everything to foreigners will not only perpetuate the nation’s economic dependence but will also exacerbate Ghana’s economic vulnerabilities with disastrous consequences on the poor and the less privileged. “For instance, according to available data: Out of the US$22.72 billion worth of mineral resources produced in Ghana from 2015–2018, the country made only US$1.48 billion, representing a paltry 6.5 per cent in revenue.
The remaining US$21.24 billion or 93.5 per cent went to foreigners and foreign corporations. Moreover, in terms of economic rents, only 10.5 per cent of the US$14.14 billion (super-normal profit) generated from mineral production over the same period was paid as revenue to the government, with the multinational corporations bagging in as much as 89.5 per cent of the super-normal profits.
In simple terms, in almost all the agreements on Ghana’s natural resources, the nation is getting at most 15 to 20 per cent and for some parochial and selfish reasons, successive Ghanaian leaders have looked on”.
The fact is that past leaders have prioritised their acquisition and control of political power over ensuring that the state and the general citizenry get their fair share of the national resources. Foreign powers have always provided political, economic and security support and guarantees to their corporations expanding their interests worldwide. And across the world, there is a form of unspoken principles of reward and punishment for local politicians and elites in their relationship with foreign economic and financial interests, particularly in the hugely contested arena of natural resource extraction and exploitation. Those elites, particularly in developing countries, who play by these unspoken rules are politically rewarded while recalcitrance is severely punished.
Thus, while the takeover of the Damang Mine by E&P is not the best solution to the problem of natural resource ownership, extraction and exploitation in Ghana, in the present neoliberal environment, there is hardly any viable option or alternative. My view has always been that the state, through the Ghana Gold Board (Goldbod) or the Bank of Ghana, should have taken over the Damang Gold Mine from Goldfields instead of any private entity, whether E&P or any other local or foreign company.
This would ensure that the entirety of the proceeds of the gold mine would go to the state directly to support economic stability, growth and development. However, counter arguments made in the 1980s under the Economic Recovery Programme (ERP) to privatise the mining industry were that the sector was replete with inefficiency, corruption and putting square pegs in round holes. Therefore, there is a tendency that the same scenario would play out in this instance, too. However, under the Mahama resetting agenda, these problems could have been remedied, and the state given the rare opportunity to take over the gold mine instead of the private sector, whether E&P or any other.
However, having said that, we must also face some realities. My first hypothesis on why the Mahama government did not go through this route of state ownership is the fear of sending a wrong signal across the financial world, particularly within multinational corporations and their powerful governments, the private sector and global financial institutions, that Ghana under the Mahama government was moving towards a policy of state nationalisation of vital mineral or natural resources. This would have enormous economic, political and even security implications on the nation.
The pushback from these foreign forces and their local collaborators in political or public arenas, media and civil society will not only be quick but also detrimental to the nation and its interests. We have already seen a glimpse of the long arm of foreign economic interests in Ghana’s natural resource sector in the media and civil society, particularly the legal battle between E&P and some civil society organisations regarding the takeover of the Damang Mine. Therefore, pragmatism is required from the political leadership when dealing with issues in the extractive sector.
Secondly, given the partisan and corrupt nature of our politics, a takeover by the state of this important gold mine at this juncture could easily be overturned by any local opposing political forces that may take over state power in future. Hypothetically, the gold mine could then be handed over to a private entity aligned with those political forces, as happened to the past privatised state assets. The worst scenario, however, would be for a future government to hand over the asset to another foreign interest and send the nation backwards again regarding the ownership of mineral resources.
In all this, what is heart-warming is that E&P, apart from its enormous generosity to ordinary Ghanaians, has pledged various infrastructure programmes to the mining areas of Damang and the adjoining communities. While the primary motive for that infrastructure is to support E&P’s own movements and operations in the mining communities and beyond, the infrastructure will be an enormous addition to both local and national development.
The bigger issue is the recent news that Damang Gold Mine, under the ownership of Ibrahim Mahama, has sold 100 per cent of its first gold output to GoldBod and the Bank of Ghana to support the country’s national reserves and economic stability. This is an incredible departure from the past and good news to the Ghanaian economy in the midst of the global economic shocks.
My only hope is that this level of relationship between the private sector and the state will continue in the years to come, regardless of which group of people are in control of state power, as the nation gradually moves to limit the presence and influence of foreign corporations in its natural resource sector.
Abdul Hakim Ahmed, PhD
Senior Lecturer
Department of Political Science
University of Education, Winneba
E-mail: [email protected]
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DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.
