Accra, 5th January, 2024

The Ghana Extractive Industries Transparency Initiative (GHEITI) wishes to bring to the attention of its key stakeholders, both state and non-state actors, and the country’s development partners, the publication of its maiden Extractive Industries Transparency Initiative (EITI) report on the Artisanal and Small-scale mining sector. The report, covering the 2020 financial year, was finalised on 30th December, 2023, and published today, 5th January, 2024 on the GHEITI web portal at https://www.gheiti.gov.gh

Ghana acceded to the EITI, a global good governance standard in the extractive sector, in 2003 and established structures for its implementation almost immediately, with Ghana’s first EITI report published in 2005, covering half year of 2004.

GHEITI’s report findings and recommendations have over the years inspired wide-ranging fiscal reforms in the mining sector, and have influenced the transparency and accountability provisions in Ghana’s petroleum industry laws.  Though, the Artisanal and Small-scale Mining sector has been growing in importance over the years, accounting for about 31 percent of the country’s total gold production, and constituting a significant (60 percent) of the country’s mining labour force, it has not received commensurate attention in GHEITI’s previous reports. This is largely because of the informality of the sector and associated difficulty in obtaining data.

Again, the growth in the ASM sector has not reflected in commensurate revenues to the state. The Multi-Stakeholder Group (MSG), which serves as the governing body for EITI in Ghana believes that, integrating the EITI into the ASM governance architecture will ensure environmentally sustainable and economically beneficial outcomes, by engendering transparency and accountability along the entire ASM transaction chain, and helping to mitigate the risks of Illicit Financial Flows in the sector.

Among the key findings of the report, is the apparent challenge associated with accounting for ASM Withholding Tax collections on mine by mine, lease by lease basis. The report notes that, the Income Tax (Amendment) (No. 2) Act, 2021, Act 1071 has introduced a new tax measure in the ASM sector, that requires a resident person to withhold tax at a rate of 1.5 percent, where the person pays for unprocessed precious minerals located in Ghana or won from Ghana. Because of the informality of ASM operations and poor record keeping by operators, the tax is collected from exporters at the point of export, on their accumulated amounts of gold, under the assumption that they withheld it at the point of purchase. The challenge however is that, it is difficult to attribute the collections to any specific mine, therefore making it difficult to account for small scale tax payments at the mine level.

The report identifies the lack of ASM access to geo-scientific data as contributing significantly to irresponsible ASM activities and environmental degradation, including irreversible environmental damages. It notes that, though the Minerals and Mining Policy encourages the Commission to work with the Geological Survey Authority to acquire geo-scientific data for the ASM sector, there is still no legal provision to give proper effect to the policy.

Furthermore, the EITI report on the ASM sector reveals that, the Minerals Commission does not routinely publish ASM production information, disaggregated by each operating ASM license. Rather the Commission relies on ASM export figures obtained through assay laboratories at the point of export. The assumption that ASM export is equivalent to ASM production raises grave concerns about the accuracy and therefore, reliability of ASM production figures. It does not account for local consumption of ASM gold by domestic jewelers, and ASM gold exported via unapproved routes, for which reason, the report is advocating for a revision of the formular for estimating ASM production.

This maiden EITI report on Ghana’s ASM sector has been produced with the support of the World Bank, under the Ghana Landscape Restoration and Small-Scale Mining Project (GLRSSMP).

Signed,
Dr Steve Manteaw
Co-Chair, GHEITI