Ghana loses US$6.56bn a year in potential mining revenue – IFS

In 2025, Ghana missed out on an estimated US$6.56 billion in potential mining revenue due to its limited direct involvement in extraction activities, according to the Institute for Fiscal Studies (IFS). The think tank's policy brief titled "A Reexamination of the Low Government Revenue Mobilization in Ghana" called for addressing the structural gap in the upcoming 2027 Budget.

Mining contributed US$13.40 billion in value added in 2025, with the government capturing only US$1.60 billion, which represents 11.9% of the total. Over the period of 2019-2023, government mining revenue averaged 15% of the sector's value added, compared to Botswana's 60.9% during the same timeframe. If Ghana had followed Botswana's 60.9% benchmark for mining revenue, the government would have received an additional US$6.56 billion.

The disparity can be attributed to Botswana's joint-venture model with private miners, as opposed to Ghana's concession system where private companies manage extraction and retain operational data. Boakye emphasized that Botswana not only earns substantial corporate income tax revenue from mining but also benefits from dividend payments and royalties.

The brief further highlighted that in 2022, Ghana's total revenue and grants accounted for 15.7% of GDP, placing the country 18th out of 25 sub-Saharan African nations, below the regional average of 20.1%. This shortfall in revenue mobilization often leads to funding shortages for developmental projects, resulting in increased borrowing, frequent debt build-ups, high debt service costs, and potential fiscal or debt crises.

Boakye suggested direct state equity investment, joint ventures, or production-sharing agreements in the extractive sector to improve revenue mobilization. Additionally, the report recommended a "carrot and stick" approach for revenue collectors, urging the government to review existing tax incentive packages and eliminate those that do not yield economic benefits in terms of revenue loss, employment creation, and foreign exchange inflows.