Ghana’s Mining Tax Hike Risks Investor Flight, Industry Warns

ACCRA — Ghana’s mining sector is facing what experts are calling a growing crisis of confidence, following fresh warnings from the Ghana Chamber of Mines that recent tax increases could threaten the country’s competitiveness and long-term future as a global mining hub.

The Chamber’s concerns, highlighted in interviews monitored by Accra Street Journal, center on the Growth and Sustainability Levy and other “obnoxious” taxes, including a 3% levy on gross mineral production and Value Added Tax (VAT) on mineral exploration — policies that industry players say could drive investment away.

“Exploration is the lifeblood of mining, and now we’re taxing that lifeblood,” said Ahmed Nantogmah, Acting Chief Executive of the Chamber. “Most of these explorers are risk-takers, but they’re being punished for taking that risk,” he told Accra Street Journal in an exclusive interview.

Punishing the Frontier: VAT on Exploration

The Chamber has been particularly vocal about the impact of VAT on high-cost, high-risk exploration processes like drilling and geological assays, which often yield uncertain results. “Imagine putting $10 million into exploration, finding nothing, and still having to pay VAT — with no refund,” Nantogmah said.

Unlike large multinationals, early-stage exploration in Ghana is largely driven by small and mid-sized companies, which lack the financial buffers to withstand sudden tax shocks. As a result, Accra Street Journal reports that many of these firms are already relocating to more tax-friendly jurisdictions such as Côte d’Ivoire and Kenya, where exploration enjoys better fiscal incentives.

“These companies don’t have deep pockets,” Nantogmah stressed. “So, they go where exploration isn’t penalized — and Ghana loses out.”

An Existential Threat to Future Mines

The Chamber is sounding the alarm that the consequences of these policies could be long-term and severe. “No exploration today means no new mines tomorrow,” Nantogmah warned, underscoring what Accra Street Journal calls a strategic misstep in Ghana’s broader economic planning.

Global competition for mineral investment — particularly in critical resources like lithium, bauxite, and gold — is intensifying. As countries race to attract capital, Ghana’s tax-heavy approach risks pushing the country down the investment ladder, analysts from Accra Street Journal argue.

Call for Policy Recalibration

The Chamber is urging a rethinking of Ghana’s fiscal framework, advocating for VAT exemptions on exploration, tax reliefs for early-stage firms, and streamlined regulatory processes that make it easier to operate in the country.

“This isn’t about dodging taxes — it’s about building a sustainable mining ecosystem that drives innovation, investment, and long-term national growth,” Nantogmah clarified.

Accra Street Journal notes that mining remains one of Ghana’s economic backbones, contributing significantly to foreign exchange, public revenues, and employment. However, this foundational role is at risk if exploration — the seed of all future mining activity — is stifled.

Time for Action

The Chamber’s appeal arrives at a critical moment. As other nations sweeten the deal for exploration capital, Ghana’s policy shift could reverse years of progress in a sector that has long powered the national economy.

Without urgent intervention, stakeholders fear a scenario where investment dries up, jobs are lost, and future production collapses — a situation Accra Street Journal describes as an avoidable economic own goal.

Last Updated on May 24, 2025 by samboad