Ghana’s mining sector cemented its position as the backbone of the economy in 2025, delivering record export earnings, robust tax revenues, and strong employment gains, even as industry leaders warned that rising fiscal pressures and policy uncertainties could threaten future investment.
Speaking at the 98th Annual General Meeting (AGM) of the Ghana Chamber of Mines in Accra on June 5, outgoing President Michael Edem Akafia said the industry’s performance underscores its central role in sustaining macroeconomic stability and growth.
“The sector remains the country’s largest source of direct domestic revenue, its leading export earner, and a vital contributor to foreign exchange reserves,” Mr. Akafia.
Ghana’s economy expanded by 5.95 percent in 2025, its strongest growth in five years, driven largely by gold mining, ICT, and a recovery in cocoa production.
The gold subsector emerged as the standout performer, recording a 19.6 percent growth rate. Its contribution to GDP rose sharply to 9.98 percent, making it the single largest sub-sector of the economy. Overall, the solid minerals sector expanded by 13.56 percent, while mining and quarrying accounted for 14.8 percent of GDP.
Global factors also supported the surge. Gold prices rallied strongly in 2025, with the London Bullion Market Association (LBMA) price jumping by over 64 percent to close the year above US$4,300 per ounce, amid geopolitical tensions, trade uncertainty, and increased investor demand.
A major structural shift occurred within Ghana’s gold industry, as small-scale mining overtook large-scale operations for the first time in over a century. Total gold output rose by 23.4 percent to 5.94 million ounces in 2025, driven by a 63.8 percent surge in small-scale production.
Small-scale miners contributed 52.4 percent of total output, up from 39.4 percent in 2024, supported by reforms including the establishment of the Ghana Gold Board.
In contrast, large-scale production declined slightly by 2.98 percent to 2.83 million ounces.
“This transition presents both opportunities and challenges,” Mr. Akafia noted, stressing that while small-scale mining is boosting output, it contributes minimally to taxes and royalties.
The mining sector delivered a major boost to Ghana’s external position, with mineral export earnings surging by nearly 78 percent to US$21.36 billion in 2025. This pushed the sector’s share of total merchandise exports to 68.22 percent, reinforcing its position as the country’s dominant foreign exchange earner.
At the same time, mining remained the largest contributor to direct domestic tax revenue, generating GH¢23.11 billion in 2025—up 10.76 percent from the previous year. Total fiscal contributions from the sector reached GH¢24.22 billion.
However, its share of total government revenue declined slightly, reflecting broader fiscal dynamics. Despite strong performance, industry leaders raised concerns about the increasing fiscal burden on mining companies.
Government’s introduction of a sliding-scale royalty regime—ranging from 5 percent to 12 percent—alongside other taxes has pushed the effective tax rate to between 54 percent and 58 percent. “This places Ghana among the highest-taxed mining jurisdictions globally,” Mr. Akafia warned, calling for a comprehensive review of the fiscal framework to maintain competitiveness.
The Chamber also highlighted concerns over the Growth and Sustainability Levy (GSL), which was increased before being reduced to 1 percent in 2026. Chief Executive Officer of the Chamber, Dr. Kenneth Ashigbey, emphasized that policy stability remains critical for sustaining investment and long-term growth.
“Mining is capital-intensive and long-term. Policy certainty is not optional—it is essential,” he said. Both leaders expressed concern about ongoing reviews of the Minerals and Mining Act, particularly proposals affecting lease durations, stability agreements, and licensing regimes.
Uncertainty surrounding lease renewals and regulatory approvals, some pending for over a decade, was also flagged as a major risk to exploration and future project development. Illegal mining continues to pose significant environmental and operational challenges, damaging land, polluting water bodies, and encroaching on concessions.
The Chamber is working with government and development partners to develop sustainable solutions, including alternative livelihoods and stronger enforcement mechanisms.
Infrastructure deficits—especially the deteriorating Western railway line—are also raising costs. Bulk mineral transport by road is estimated to be about 50 percent more expensive than rail. The sector’s social impact remains significant. Direct employment within Chamber member companies rose by over 21 percent to 13,819 workers in 2025, with an estimated 207,000 indirect jobs supported.
Local procurement spending reached US$4.20 billion, while community investments totaled US$88.6 million. Still, the Chamber renewed calls for at least 30 percent of mineral royalties to be allocated directly to mining communities, alongside the establishment of a Mineral Revenue Management Act.
Looking ahead,Gold production is projected to remain strong, with large-scale output estimated between 3.2 and 3.4 million ounces, while small-scale production could range from 2.9 to 3.5 million ounces.
However, industry leaders cautioned that regulatory reforms, tax pressures, and global uncertainties could weigh on investment and output. The AGM also marked the end of Mr. Akafia’s two-year tenure as President, with Fred Attakumah taking over leadership of the Chamber.
Dr. Ashigbey noted that the Chamber is preparing for its centenary celebrations, which will highlight its historic role in Ghana’s economic development and outline a future focused on sustainability, innovation, and inclusive growth.
“Ghana’s mining industry remains one of Africa’s most attractive destinations,” he said. “But sustaining that position will depend on the policy choices we make today.”
Source: businesspostonline
