Prof Bopkin cautions against nationalisation of the mining sector

Economist and Finance lecturer, Prof Godfred Bokpin has cautioned Ghana against pursuing an aggressive indigenisation or nationalisation agenda in the mining sector, warning that any attempt to restructure ownership arrangements must be handled with “careful management”, to avoid frightening Investors and destabilising the broader economy.

According to Prof. Bokpin, while Ghana has legitimate grounds to revisit mining lease agreements that many believe have historically disadvantaged the country, policymakers must avoid emotionally driven decisions that could undermine investor confidence and threaten capital inflows into the economy.

Prof. Bokpin’s remarks follow recent calls by the Institute of Economic Affairs (IEA) – Ghana to take greater control of its natural resources, particularly the mining sector.

The policy think tank had urged government not to renew the lease of Gold Fields’ Damang Mine in the Western Region, arguing that the country now has a strategic opportunity to deepen indigenous participation in mining.

The debate comes amid the increasing involvement of local mining firms in Ghana’s extractive industry.
Speaking on Joy FM’s Newsfile programme over the weekend, monitored by The Chronicle, Prof. Bokpin argued that Ghana indeed has a “once-in-a-generation opportunity” to renegotiate expiring mining leases and secure better terms for the country, but warned that calls for outright resource nationalisation could create unintended economic consequences.

“There is no doubt that Ghana has not benefited optimally from its natural resources,” Prof. Bokpin observed during the discussion. He noted that compared to other resource-rich countries, Ghana’s returns from mining remain relatively low despite decades of gold production and rising global commodity prices.

“In fact, if you look at what we get related to the industry, probably ours is one of the lowest among more resource-intensive countries,” he stated.
However, Prof. Bokpin stressed that while the concerns raised by the IEA were valid, Ghana must avoid moving to the “extreme” position of nationalisation.

“I’m a bit flexible and I don’t want to go on that extreme of nationalisation or something because it has implications beyond just the mining sector,” he cautioned.
According to him, the debate should rather focus on improving fiscal terms, increasing local participation and strengthening value addition within the mining value chain.

“We should still be able to look at these terms in a way that allows us to get a fair share of that deposit,” he explained.
The Varsity Don further argued that Ghana’s real challenge lies not merely in ownership of mines, but in the country’s continued dependence on exporting raw minerals without substantial local processing.

“There’s a limit to how much you can gain if you are exporting raw gold or raw commodities,” he stressed.
“Why are we not looking at the value chain and processing more? Without that, we cannot get all the benefits that one would expect.”
The Economist pointed to what he described as the paradox of mining communities in Ghana, where vast mineral wealth often coexists with poverty and underdevelopment.

“Many of us have visited some of these mining communities. Goodness, it is as though God made a mistake by depositing these resources there,” he lamented.
He added that despite gold contributing significantly to Ghana’s GDP growth over the years, the impact on employment creation, poverty reduction and inequality has remained limited.

Prof. Bokpin also warned that Ghana’s low domestic savings and weak capital formation mean the country still depends heavily on foreign investment to finance large-scale mining operations.

“We need that external capital to be able to take advantage of the opportunities that we have,” he explained. Consequently, he argued that any abrupt policy shift capable of unsettling foreign investors could trigger wider economic repercussions beyond mining.

For Prof. Bokpin, however, the central issue remains balance. While Ghana must use the expiration of mining leases to demand fairer terms and deeper local participation, he insisted that reforms must be pursued cautiously, strategically and transparently.
“I can understand the call for more indigenous participation,” he concluded, “but under the current framework, if we are able to personalise all the local content within the fiscal regime, we will be making a lot more progress than what we have now.”

The discussion also featured the Chief Executive Officer of the Ghana Chamber of Mines, Kenneth Ashigbey, who similarly opposed emotionally driven approaches to mining reforms.
Mr. Ashigbey argued that Ghana’s mining sector has already witnessed significant Ghanaian participation over the years under the existing framework.

According to him, whereas the industry was once dominated almost entirely by expatriates, Ghanaians now occupy senior operational and managerial roles across the sector. He revealed that about 99.4 percent of operational leadership positions in mining are currently occupied by Ghanaians.

He further cited the emergence of local mining support companies and indigenous firms expanding beyond Ghana into other African jurisdictions as evidence of gradual but meaningful local participation.

However, Mr. Ashigbey maintained that mining remains a highly capital-intensive industry requiring billions of dollars in investment financing, which local banks currently cannot provide independently. “You need to allow the system to evolve where Ghanaians get in and participate,” he argued.

Senior Vice President of IMANI Africa, Kofi Bentil, also endorsed calls for renegotiating mining agreements but warned against simplistic resource nationalism.
According to him, Ghana must move “beyond emotion” and undertake the “heavy lifting” required to design smarter contracts that increase local benefits while preserving investor interest.

 

 

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