In October, 2011, the government of Ghana made a promise that it will increase profit tax paid by mining companies, collect windfall profit tax, and implement a uniform regime for capital allowance of 20% for five years. The government deemed these as some of the steps required to obtain a fair share from the benefits of the country s non-renewable mineral resources. Given the government s own concession that the economic and social benefits that the sector provides are not commensurate with our expectations , the anticipation has been that those initiatives were going to be implemented fully and in a timely manner. While the budget was approved a few weeks after its presentation, regulations to back these mining sector initiatives are yet to be tabled in Parliament for discussion and approval. It is even reported in the media (such as Ghana s TV3 Network) that the government has, altogether, shelved the initiatives, at least for the year 2012 when they are most needed.
The enormous profits being made by mining companies in Ghana and across Africa are well noted. As indicated by the government in the 2012 budget &during the recent global financial crisis, prices of gold, cocoa and oil reached their peak levels ever. Yet, the country did not benefit at all from the price hikes, particularly from gold&. So if the country has not benefited at all from the price hikes, particularly from gold what is the motivation for shelving the very initiatives meant to ensure that the country receives her fair share from the benefits of the country s precious and irreplaceable mineral resources? It must be noted that after exploiting these resources there is either a huge hole in the ground or an almost useless reclaimed tracts of land. It is even saddening when one takes a look at financial records of mining companies in the country. The key element in the ever-rising profitability of mining companies has been the price of minerals, especially gold. Gold prices have increased more than 500% over the past decade (from $260 per ounce in 2001 to $1800 per ounce in 2011).