Take leading role in resource exploitation -President urges Ghanaians

By Joshua Worlasi AMLANU

President John Dramani Mahama has advocated increased indigenous participation in exploitating the country’s natural resources, as part of a broader strategy to revive the economy and reduce reliance on foreign entities.

Multinational companies dominate Ghana’s gold and oil industries, accounting for nearly 70 percent of  total merchandise exports. This means that the revenue generated from these sectors does not fully benefit the Ghanaian economy, he said.

Speaking at the 2025 National Economic Dialogue, Mr. Mahama noted the need for Ghanaians to take a leading role in the extraction and exploitation of resources such as gold which have long been key to the nation’s economy.

“There must be increased indigenous participation in the exploitation of our natural resources,” Mr. Mahama declared. “Ghana must earn more from its natural resource endowment in order to play a role in prosperity for all,” the president declared.

Ghana’s extractive sector, particularly mining, significantly contributes to the nation’s economy; however, local participation in this remains low.

In 2023, the country produced approximately 4.2 million ounces of gold, accounting for about 4 percent of the world’s total output.

This production led to mineral revenues of US$5.9billion, with mining companies repatriating over US$4.2billion into the country through commercial banks and the Bank of Ghana, representing 71.3% of total mineral revenue for the year.

Additionally, Ghana’s mineral export receipts improved from US$6.8billion in 2022 to US$7.8billion in 2023, marking a 15 percent revenue increase attributed to the growth in export earnings from all minerals except manganese.

Gold exports alone accounted for US$9.58billion as of October 2024, representing more than half the total export earnings of US$16.5billion.

The president’s remarks come as the nation grapples with a severe economic crisis marked by elevated inflation, high unemployment and declining foreign investment.

Mr. Mahama’s call for greater domestic involvement in the extractive industries aligns with his broader vision of transitioning the country from a raw material exporter to a value-added industrialised economy.

He stressed that the country’s over-reliance on exporting unprocessed resources has left it vulnerable to global price fluctuations and external shocks.

“It’s time to transition into a value-added industrialised economy that creates jobs, boosts exports and reduces our reliance on imports,” he said.

The president’s speech also touched on a need for structural reforms to unlock the private sector’s potential and drive job creation.

Similarly, the Institute for Fiscal Studies (IFS) last week also called for a fundamental shift in Ghana’s approach to managing its external sector, urging government to reconsider the ownership structure of Ghana’s two largest exports – gold and oil – to ensure that more foreign exchange earnings remain within the economy.

In it’s recommendations ahead of the 2025 budget presentation in parliament this month, the policy think-tank stated that despite the country’s consistent trade surpluses in recent years, the cedi has continued to depreciate sharply -highlighting a structural weakness in the country’s balance of payments.

IFS recommended a restructuring of the extractive sector ownership model. The think-tank proposes two key strategies: increasing state participation in gold and oil production through joint ventures or adopting production-sharing agreements, which would allow government to retain a larger share of export revenues.

“Taking commanding interests in gold and oil through joint ventures or production-sharing agreements is not just an economic necessity; it is a strategic move to secure Ghana’s financial stability,” Dr. Boakye stated.

“This approach will generate more fiscal revenue for government while also ensuring that a substantial portion of foreign exchange earnings remains within the country to support the cedi.”

IFS warns that without such reforms, the nation will remain vulnerable to currency volatility and economic crises. The country’s dependence on external borrowing to manage exchange rate fluctuations has repeatedly led to unsustainable debt accumulation, triggering fiscal distress.

The policy think-tank argued that the current crisis, which began in 2022, is a direct result of this pattern.

Data from the Bank of Ghana shows that between 2017 and 2023 the country recorded positive trade balances each year, with total merchandise exports rising from an average of  US$14.8billion between 2017 and 2019 to US$17.1billion between 2022 and 2023.

However, this increase did not translate into exchange rate stability. Instead, the cedi’s depreciation rate surged from an annual average of 8.7 percent between 2017 and 2019 to 28.9 percent in the 2022-2023 period.

The reason, according to IFS, lies in the extractive sector’s ownership structure .

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