Ghana Must Tie Industrialisation Targets to Mining Contracts: Expert

Gideon Ayi Owoo, a Resource and Industry Expert at Deloitte Africa, has called on the government to establish clear and transparent policies governing the renewal of mining leases. He believes this will ensure fairness for both existing operators and new investors.

Speaking on the JoyBusiness Roundtable, Mr Owoo stressed that if Ghana intends to drive industrialisation through the mining sector, it must make industrialisation a mandatory condition in mining agreements and lease renewals.

Mr Owoo said, "If Ghana wants industrialisation, there must be a precondition in mining contracts." He argued that the government must clearly define the conditions under which mining leases would be renewed to reduce uncertainty within the sector. This, he said, is crucial for the sector's growth.

The government, according to Mr Owoo, should come up with very clear guidelines and policies that outline the conditions for renewing mining leases. Mining companies, he noted, should be made aware of government expectations well in advance, particularly where industrialisation targets and local value addition are concerned. They shouldn't expect any surprises, he added.

Mr Owoo said, "If you want industrialisation, make it a precondition. Put it on paper." Mining companies should know the requirements well in advance. He maintained that once the rules are clearly defined from the outset, companies that fail to meet the agreed conditions at the end of their lease periods shouldn't expect renewals. It's only fair, he said.

Mr Owoo also cautioned that new operators who take over mining concessions often inherit the more difficult and less profitable stages of mining operations. The difficult and low-margin parts are often what are left behind for the next operator to handle, and that creates challenges, he explained. They're not easy to overcome, he added.

The Resource and Industry Expert at Deloitte Africa further advocated for greater local participation in the mining industry through the stock market and domestic institutional investors. There are a lot of domestic institutional investors, he said. Pension schemes have a lot of money now, and they can't be ignored. Can they be included, he asked. It's worth considering, he noted.

He also underscored the need to strengthen local content policies to ensure Ghanaians derive greater value from the country's mineral resources. Mr Owoo said, "I'm nationality agnostic. I'm not here for any foreign owner." He emphasized that they just need good policies in place so that whatever decision they take benefits both the old owner and the new owner. It's a win-win situation, he said.

As the conversation around mining contracts and industrialisation continues, Mr Owoo's call for clear policies and preconditions is likely to resonate with many Ghanaians. With the country looking to drive growth through the mining sector, the need for transparent and fair agreements has never been more pressing. They're essential, he said.

In recent years, Ghana has seen significant investment in the mining sector, with many multinational companies operating in the country. However, the benefits of these investments haven't always been evenly distributed, with some communities complaining of environmental degradation and a lack of economic benefits. They're not happy, he noted.

The mining sector is a significant contributor to Ghana's economy, accounting for a substantial portion of the country's export earnings. However, the sector is also plagued by challenges, including environmental degradation, displacement of communities, and a lack of transparency in mining contracts. They're major issues, he said.

To address these challenges, the government has implemented various policies and regulations, including the Minerals and Mining Act, which outlines the framework for mining operations in the country. However, more needs to be done to ensure that the benefits of mining are shared equitably among all stakeholders. They can't afford to wait, he said.

As Mr Owoo noted, making industrialisation a precondition in mining contracts is a step in the right direction. It will not only drive growth in the sector but also ensure that Ghanaians derive greater value from the country's mineral resources. It's a significant step, he said. They won't regret it, he added.

The conversation around mining contracts and industrialisation is ongoing, with many stakeholders calling for greater transparency and fairness. As Ghana looks to drive growth through the mining sector, the need for clear policies and preconditions has never been more pressing. They don't have a choice, he said. They must act now.