By: Albert Amekudzi
Over the past decades, Ghana has witnessed impressive strides in the development of its mining industry, solidifying the sector’s role as a critical pillar of the country’s economy. Once a small-scale activity, mining has become a national economic “saviour”, driving not only economic recovery programmes and growth but also facilitating broader development in areas such as infrastructure, manufacturing, agriculture, and foreign exchange. As Ghana continues to harness the potential of its mineral resources, the mining value chain, comprising extraction, processing, logistics, and support services, has become increasingly important in promoting industrialization, regional development, and social advancement.
Economic Impact of the Mining Sector
In the last 10 years (2014 to 2023) total mineral revenue was over USD40.15 billion and out of this over USD29 billion was returned into the country through the bank of Ghana and the commercial banks. In 2024, Ghana saw a significant 19.3% rise in gold production, reaching a record 4.8 million ounces, up from 4.0 million ounces in 2023. This growth was largely driven by a 70.1% surge in output from small-scale miners, increasing their contribution from 1.1 to 1.9 million ounces. Meanwhile, large-scale production remained steady at 2.9 million ounces. As a result, the small-scale sector’s share of total output rose from 27.7% to 39.4%, while the large-scale sector’s share fell from 72.3% to 60.6%.
In 2024, producing members of the Ghana Chamber of Mines contributed 59.4% of the country’s gold output, with mineral revenue increasing by 19.8% to US$7.1 billion. Their gold output saw only a slight year-on-year rise of 0.02%, due to production halts at Future Global Resources’ Bogoso Mine caused by liquidity issues leading to a licence revocation and broader declines across other producers facing operational and end-of-mine challenges. These losses were partly offset by increased output from Newmont’s Ahafo South and Golden Star’s Wassa mines. In contrast, non-member large-scale mines saw an 8.3% drop in output.
In 2024, Ghana’s mining sector contributed GH₵17.7 billion in fiscal payments to the government, a 51.2% increase from GH₵11.7 billion in 2023. Dividends paid to the state rose sharply by over 600% to GH₵1.03 billion. The sector’s share of direct domestic taxes grew from 22.7% to 24.3%, its share of domestic revenue increased from 8.8% to 9.6%, and its contribution to total government revenue rose from 8.6% to 9.5%. Mineral royalties also increased significantly, up 76.7% from GH₵2.8 billion to GH₵4.9 billion, raising their share of total fiscal contributions from 23.7% to 27.7%.
The Mining Value Chain
While mineral extraction forms the backbone of Ghana’s mining industry, the value chain associated with the sector extends far beyond the mines themselves, creating a ripple effect across various industries. The mining value chain, comprising exploration, extraction, transportation, processing, manufacturing, and trade, has far-reaching implications for the country’s broader economic development.
Manufacturing and Value Addition
Ghana has long been an exporter of raw minerals, primarily gold, but there is increasing momentum toward adding value to these resources domestically. The establishment of mineral processing plants, smelters, and refineries has begun to shift the country away from simply exporting raw materials to producing finished and semi-finished goods.
For example, Ghana is focusing on processing its bauxite resources to produce alumina, a key input for aluminum production. This development has the potential to create a downstream aluminum industry, which could significantly enhance the country’s industrial base. The government’s push to develop a robust value-added mineral processing industry not only promises to increase the country’s export earnings but also creates a multiplier effect by stimulating the growth of other sectors, including construction, machinery, and chemical production.
By diversifying the value chain, Ghana can also attract foreign investment into manufacturing, technology, and innovation, transforming the country into a regional hub for resource-based industrialization.
Mining and Agriculture
The mining industry is often perceived as disconnected from agriculture, but the two sectors are intrinsically linked, particularly in rural areas. Mining operations typically employ hundreds or even thousands of workers, many of whom live in mining camps or stay near the mining site. These workers need regular meals, and the companies usually operate or contract catering services to provide food throughout the day. As a result, there is a high and consistent demand for various farm produce, including chicken and other meat products, rice, vegetables and fruits.
Additionally, mining companies often host guests, investors, or government officials, and need to provide food for meetings, events, or tours. This steady demand creates a strong market for local farmers and agribusinesses, linking the mining and agricultural sectors. It also means that the growth of mining can positively impact rural economies by increasing demand for agricultural products. District assemblies in mining areas could develop their agriculture base to feed into the mining operations to create sustainable jobs for the youth. Additionally, reclaimed mined lands have been used for various farming purpose and the produce is used to serve workers and visitors.
Foreign Exchange Earnings and Trade
The mining sector has played a pivotal role in boosting Ghana’s foreign exchange reserves, particularly through the export of gold, which has been the country’s largest foreign exchange earner for the past decade. In 2024, Ghana’s mineral export earnings surged by 52.7% to US$11.9 billion, accounting for 58.4% of total merchandise exports, with gold alone generating US$11.6 billion. This strong performance bolstered the balance of payments, supported 2.9 months of import cover, and stabilized the exchange rate. The mineral sector’s share of export earnings rose from 47.0% in 2023 to 58.4% in 2024, reaffirming its role as the leading foreign exchange earner. In comparison, crude oil exports rose slightly to US$3.9 billion, while cocoa export revenue fell by 9.9% to US$1.9 billion.
Mining and Manufacturing
Mining companies rely heavily on a wide range of mine inputs, chemicals, and equipment essential for daily operations. Some of these include activated charcoal, used in gold processing to absorb and extract gold from solutions; grinding media, steel balls or rods used to crush and grind ore into fine particles for mineral extraction and explosives, required for blasting rock to access mineral deposits. Others are cement, used for construction of mine infrastructure such as tunnels, shafts, and buildings; electrical cables, vital for powering machinery, lighting, and communication systems across mining sites and caustic soda, a chemical used in mineral processing, particularly in gold refining. These inputs are critical to the functioning and productivity of mining operations, yet many are imported due to limited local manufacturing capacity.
Linking to the Need for a Strong Manufacturing Sector
To reduce reliance on imports and improve operational efficiency, it is essential to develop a robust domestic manufacturing sector that can produce these mining inputs locally. This will help reduce cost because locally made inputs can be more affordable due to lower transport and import costs, have a strong supply chain and reduce the risk of supply disruptions caused by global market shocks or shipping delays, create jobs for both the skilled and semi-skilled to stimulate broader economic development. Additional benefits are foreign exchange savings: value addition and stronger industrial linkages. A well-developed manufacturing base can provide inputs not only to mining but also to construction, energy, and other sectors.
Mining’s heavy demand for industrial supplies presents a strategic opportunity to strengthen Ghana’s manufacturing sector. By localizing production of key inputs, the country can build a more integrated, resilient, and inclusive economy.
Sustainability and Challenges Ahead
While the mining industry has undeniably been a crucial driver of economic growth, its long-term success hinges on sustainable practices and overcoming key challenges. These include addressing environmental concerns such as land degradation, deforestation, and water pollution, as well as ensuring that mining benefits are equitably distributed to local communities. Moreover, there is a need for greater investment in geological survey, refining and processing technologies to ensure that Ghana maximizes the value it derives from its mineral resources.
There is also the pressing issue of formalizing and regulating small-scale and artisanal mining, which, despite its economic importance, has often been associated with environmental and social challenges. By fostering responsible mining practices and ensuring that small-scale miners are integrated into the broader value chain, Ghana can create a more inclusive and sustainable mining industry.
Conclusion
Over the last decade, Ghana’s mining sector has become a cornerstone of the nation’s economy, contributing to GDP growth, export earnings, employment, and infrastructure development. Beyond the extraction of raw minerals, the mining value chain is a key driver of broader economic activities in manufacturing, agriculture, foreign exchange, and regional development. With its vast resource wealth, Ghana has the opportunity to further enhance its mining industry’s impact by diversifying into value-added processing, strengthening local linkages, and prioritizing sustainable practices.
In this way, mining will continue to serve as a national strategic anchor industry, fostering long-term growth and prosperity for Ghana while contributing to its vision of becoming an industrialized and diversified economy.
The writer is an integrated marketing communication professional with experience in sustainability, external relations and events management.
