GHANA MINING COMMUNITIES KEEP LOSING OUT
GHANA has gold, diamonds, bauxite, manganese, salt, limestone, granite and oil. Its mining and quarrying sector contributes significantly towards its economy. It is the second-largest gold producer in Africa after South Africa and the 10th-largest producer in the world.
Two years ago, gold contributed 96% of mineral export revenues (excluding oil and gas). In total, the mining sector contributed 43% of export revenues in 2017.
But mining communities in Ghana are generally poor. Mining imposes socio-economic costs on host communities through land acquisitions, environmental degradation, pollution and a high cost of living.
In 1993, the government established the Minerals Development Fund to fund and implement development projects in communities affected by mining. The aim was also to transfer mineral royalties to authorities. Mining companies must pay up to 5% of their revenues to the state, and of that, the government transfers 20% to the fund. The fund was to keep half of what it received to fund research and development and to transfer the remaining to the Office of the Administrator of Stool Lands.
The office was to retain 10% of what it received and transfer 20% of what remained to paramount chiefs, 25% to traditional councils and 55% to the district assemblies of the mining company’s operation area. The authorities were supposed to use the royalties to develop mining communities.
Despite this, mining communities remained saddled with social, economic and ecological challenges. This was partly because transferred royalties were captured by elites. And there were issues around prompt payments to the fund, its legal status and its mandate.
To address the issues, a new law, the Minerals Development Fund Act was passed three years ago. The scheme is to receive 20% of the fund’s share. It is to facilitate development in mining-affected communities. In each mining community, a management committee is to administer the scheme.
Despite its potential, the act has not been able to address the multiple challenges. To address this and ensure development in host communities, the act should be amended:
The mining community development scheme should be assigned at least 20% of the mineral royalties.
Local people should be mandated to elect members to the committees.
It should be clear what authorities can spend mineral royalties on.
The Ghana Revenue Authority should be mandated to disburse mineral royalties to the fund.
Information on how much the fund, the office of stool lands and local authorities receive in mineral royalties, and how they spend them, should be made publicly available.
If the recommendations were considered, they would promote participatory development and accountability in mining communities as people would have a greater say in how mineral royalty transfers were spent.
There would be more funds to promote alternative livelihoods and sustainable development, address environmental degradation and provide social amenities.
Lujala is a professor in human geography at the University of Oulu. The article first appeared in The Conversation
Despite the fund, communities remained saddled with challenges