Dormaahene Osagyefo Oseadeeyo Dr. Agyemang Badu II has announced plans to welcome mining companies into his traditional areas to increase employment opportunities for his people.
However, he has stipulated that he will only accept a 50% share of the profits for the government of Ghana to contribute to development.
The state’s current 10% carried interest in mining operations, according to the Ghana Extractive Industries Transparency Initiative (GHEITI), has yielded insignificant returns over the years. GHEITI has proposed that this share be converted into mineral resources rather than dividends.
Under the current mining arrangements, private parties are granted mineral rights, giving them the right to mine minerals in the ground, with the government entitled to a 10% equity interest in the mineral operations, even if it does not make a financial contribution.
This share is usually received as dividends, which can be limited if companies decide to channel funds into other projects.
To address this issue, GHEITI suggests converting the government’s share or interest in mining contracts into minerals. This move aims to support initiatives such as the Bank of Ghana gold reserve drive and the Gold for Oil barter scheme.
The mining and quarrying sector’s share in Ghana’s GDP reduced marginally from 7.8% in 2019 to 7.6% in 2020. However, it remains a significant economic activity, ranking as the country’s second-largest economic activity after retail trade at the end of 2022. Its share of GDP increased from 4.5% in 2021 to 7.6% in 2022.
Dormaahene’s proposal aims to ensure that mining activities in his areas benefit both the local communities and the government, contributing to overall development and improvement in the quality of life for his people.