The United Nations (UN) Resident Coordinator for Ghana, Mr. Charles Abani, has emphasized that tackling illegal mining, commonly known as galamsey, is vital for creating a sustainable economy.
He pointed out that illegal mining has harmful effects on various aspects, including people, poverty, employment, child labor, the environment, and water resources, while also facilitating illicit financial flows.
Mr. Abani made these remarks during his keynote address at the launch of the Institute of Sustainability Professionals Ghana (ISPG).
To reinforce his argument, he noted that a UN study estimates that the minimum impact of illicit financial flows in the region amounts to US$3 billion annually.
“Per our estimate in the UN, based on proxy figures from other countries in the sub-region where we have done this study, the minimum Illicit Financial Flows (IFFs) impact in the region is US$3billion a year.”
“That is the size of money you borrowed from the IMF for three years to survive. So, if you address galamsey you will have a sustainable economy,” he stated.
Supporting UN statistics, a study conducted by the Africa Centre for Energy Policy (ACEP) regarding illicit financial flows (IFFs) and the extractive industry in Ghana revealed that in 2013, illegal mining alone resulted in losses of US$1.7 billion for the country.
In light of this, Mr. Abani encouraged citizens to actively engage in discussions about illegal and unregulated mining, highlighting its potential as a transformative issue that could lead to a sustainable economy.
The Institute of Sustainability Professionals Ghana (ISPG) is committed to promoting sustainable practices and enhancing professional development in Environmental, Social, and Governance (ESG) standards within the country.
It aims to serve as a hub for knowledge exchange, capacity building, and strategic partnerships, providing a platform for professionals and organizations to establish a comprehensive sustainability framework.
Professor Mathew Tsamenyi, President of ISPG, stated that the institute seeks to create a unified platform for sustainability discussions, ensure standardization, and empower businesses and SMEs to adopt sustainability practices for growth while protecting the environment for future generations.
Indeed, galamsey has become a significant topic of conversation in Ghana, marked by its association with environmental degradation, depletion of land and water resources, health risks for miners, and various social and economic repercussions.
This has prompted concerned citizens and organizations to intensify their efforts to guide the country toward a path of environmental integrity.
However, in combatting illegal methods of mining it is important that the extractive sector plays a critical role in economic development.
This is exemplified by the fact that the mining sector contributed a record GH₵11.55billion (US$980million) in taxes in 2023, an 81.1 percent increase from GH₵6.38billion in 2022 – making it the largest source of domestic tax revenue.
Thus, the sector accounted for 22.7 percent of all direct taxes; highlighting its significant role in the economy.
Obviously, this surge in tax revenues is expected to provide a significant boost to government coffers as Ghana works to reduce its public debt and stabilise the local currency, the cedi.
Additionally, mineral exports reached US$7.8billion during the year under review – a 15 percent rise from the previous year’s US$6.8billion. The sector accounted for 47 percent of the country’s gross merchandise exports.
Consequently, it places the sector ahead of cocoa and oil – traditionally the economy’s main export drivers, solidifying mining’s dominance in the country’s trade portfolio. Meanwhile, US$4.2billion (71.3 percent) was returned to the economy, data from the Ghana Chamber of Mines indicate.
In addition to foreign exchange contributions, mining companies spent some US$5.4billion on local products, services and community projects – with US$3.146billion dedicated to local procurement.
This development aligns with the country’s efforts to promote local content and enhance Ghanaian businesses’ participation in the mining value chain.
The sector also allocated US$31.53million toward corporate social responsibility initiatives in host communities: including investments in education, healthcare and infrastructure development.
The mining sector’s robust performance provides crucial fiscal relief as government seeks to balance its budget and implement austerity measures.
Despite these positive contributions, concerns about environmental degradation linked to illegal mining remain significant…. with the Chamber severally indicating the danger it poses to investments of member-companies.
Consequently, recent times have seen environmental groups, Civil Society Organisations (CSOs) and organised labour calling for stronger regulation to protect forest reserves and water-bodies.