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Galamsey voluntary technical advice to government, as challenges intensify – Dr. Solomon Owusu



The government of Ghana has been urged to endeavour to minimise the politicisation of the issues surrounding the illegal mining, popularly known as galamsey and address the problems from professional and technical perspectives.

Although it is the responsibility of the government to create small-scale mining opportunities for Ghanaians as part of their national heritage, the mining operations should be conducted in safe, environmentally-friendly, sustainable, and conflict-free manner. Well trained and knowledgeable technical experts should be allowed to assist in addressing this critical issue of national concern.

The continuous global demand for minerals, particularly precious metals such as gold has made mining a lucrative business, which has attracted youth participation. Currently, Ghana is the largest gold producing country in Africa and ranked sixth in the world.

ASM contributes 30% to 40% of total gold produced in Ghana and the sector supports traditionally agrarian rural households to build more resilient and diversified livelihood strategies. The sector is a “get-rich-quick” venture that has created jobs and contributed remarkably to the growth of the local economies in the respective communities. It is operated in about 13 out of the 16 regions.

The ASM sector in Ghana constitutes licensed small-scale mining, illegal mining popularly known as “galamsey” and the recently established community ining. The activities expose the miners and the respective communities to obvious environmental, health and safety (EHS) problems. Anecdotal evidence from ASM mining sites in Ghana indicate that the drinking water sources in pervasive ASM areas are significantly contaminated with heavy metals of notable public health and ecological concerns.

These problems arise as a result of reckless disregard for wastewater control and land reclamation practices. Additionally, some ASM operators encroach into large-scale mining concessions, while other factions engage in concession ownership disputes, leading to conflicts. Surprisingly, small-scale miners benefit from highly profitable returns but the government does not currently have pragmatic systems in place to effectively collect taxes from the operators. The country loses huge sums of money from the small-scale mining sector every year.

Mineral concession related riots between ASM factions have led to devastating civil wars in other countries, including DR Congo, 1996 (gold, diamond, copper, coltan); Angola, 1975 (diamond, oil); Liberia, 1989 (gold, diamond, iron); Sierra Leone, 1991 (diamond); Sudan, 1953 (oil); Cambodia, 1978 (gems); Morocco, 1975 (oil, phosphate); Colombia, 1984 (gold, oil); Indonesia, 1969 (gold, copper); Papua New Guinea, 1988 (gold, copper); Afghanistan, 1978 (gems, opium) and Burma, 1949 (gems, tin, opium). Such wars are usually caused by lack of law enforcement and injustices. They lead to many deaths, property destructions and last for many years.

Mineral conflicts and encroachments can have negative impacts on investor confidence for a country. These factors cause production delays and depletion of mineral reserves, thereby affecting the business case of the company under consideration. These attributes play critical roles during assignment of confidence index for mineral investment decisions. Ghana’s reputation as a destination for conducive and sound mining investment can be tarnished with a possibly degraded investor confidence index. The international mining companies may refuse to further invest in the country, if the galamsey problems are not addressed properly.  

Although associated with compelling challenges, the ASM sector can be effectively managed to create millions of productive and lucrative employment opportunities for the Ghanaian youth. There are few other profitable employment opportunities similar to ASM and therefore creating alternative livelihood with comparatively low income will not be a realistic replacement and efficient strategy to solve the galamsey problems. The government should adopt a holistic approach to address the issues from professional and technical perspectives, instead of resorting to politicization of the matter with unproductive assurances to deceive the public.

Sincerely. current operational practices by both the legal and illegal miners cause environmental and social problems  To address the challenges, the following approach can be considered: (1) Strategizing to avoid concession encroachment (2) Proper land acquisition (3) Rightful registration plan (4) Legitimate, expedited and decentralized permitting process (5) Development of standard operating procedures (6) Establishment of standardized mining regulations (7) Pollution-free mining strategy (8) Corruption-free tax collection system (9) Effective monitoring and (9) Indiscriminate law enforcement.

In my view, the implementation of these suggestions can help in controlling the alarming rate of riots and ensure environmentally-friendly small-scale mining operations. This approach can result in sustained economic growth, gratifying employment opportunities, poverty alleviation and important source of tax revenue generation across the mineral wealth regions in Ghana.

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Mobile Money transactions register 9.99% year-on-year growth in 4-months of 2022



Mobile Money transactions recorded 9.99% year-on-year growth to ¢331.2 billion in the first four months of 2022.

However, in the first four months of 2021, Mobile Money transactions stood at ¢301.1 billion.

According to data from the Bank of Ghana, transactions via Mobile Money grew consecutively until April 2022 when it dipped slightly.

The Electronic Transaction Levy (E-levy) was implemented from May 1st, 2022 and that could have accounted for the slight dip in the April 2022 number.

However, it’s early days to determine whether the implementation of the E-levy will significantly affect Mobile Money Transactions or not.

The Mobile Money transactions in the first four months of this year were January 2022 (¢76.2bn), February 2022 (¢76.8bn), March 2022 (¢90.5bn) and April 2022 (¢87.7bn).

Comparatively to the same period in 2021, Mobile Money transactions were estimated at January 2021 (¢67.1 billion), February 2021 (¢67.9 billion), March 2021 (¢82.3 billion) and April 2021 (¢83.8 billion).

During the whole of 2021 even with the announcement of E-levy, there were month-on-month fluctuations in Mobile Money transactions.

In terms of Mobile Money Interoperability, ¢10.51 billion were recorded in the first four months of 2022. This is compared with ¢4.59 billion during the same period in 2021.

Undoubtedly, Mobile Money remained the biggest payment solution in the country with an estimated ¢905.1 billion transactions recorded in 2021.

According to data from the Bank of Ghana, the value of mobile money transactions in January, February, March, April, May, June, July, August, September, October, November and December 2021 were estimated at ¢67.1 billion, ¢67.9 billion, ¢82.3 billion, ¢83.8 billion, ¢86.5 billion, ¢89.1 billion,

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Average lending rate rises to 21.6% in April 2022 – BoG



Average lending rate of commercial banks rose to 21.6% in April 2022, from 20.57% in March 2022, the Bank of Ghana has disclosed.

This is equivalent to 1.8% interest on loans per month.

However, the average lending rate varies among the banks and the respective sectors.

For instance, some banks will offer loans as low as 17% per annum, whilst others will charge rates as high as 29%. Overall, it will depend on the risk profile of the customers.

Again, some perceive lending to the agriculture and construction sectors as riskier, and therefore credit to these sectors are expensive.

According to the BoG Summary of Economic and Financial Data, cost of loans have been rising but marginally due to increasing inflation rate and other factors.

It rose from 20.16% in January 2022 to 20.52% in February 2022.

But average lending rate fluctuated in the first quarter of the year, and then fell consecutively till December 2021.

In January 2021, average lending rate stood at 20.97%, but shot up marginally to 21.02% in February 2021, and then fell to 20.96% in March 2021. After that it consistently dropped to 20.04% in December 2021 and later rose in January 2022.

But with the expected increase in the policy rate once again from its current 17%, lending rate is expected to go up further.

The Bank of Ghana will however hope the monetary policy measures to be announced on Monday May 23, 2022, will help bring down the rising inflation rate and consequently help reduce cost of borrowing going forward.

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Ghana’s public debt hits ¢391bn as of quarter 1, 2022



Ghana’s public debt stock remarkably shot up by ¢40.1 billion to ¢391.9 billion as of the end of March, 2022, the Summary of Economic and Financial Data by the Bank of Ghana has revealed.

The increase in the debt is due to largely exchange rate fluctuation and to some extent borrowings from the domestic market. In the first quarter of 2022, the cedi assumed a free fall to the dollar, but its depreciation was halted in April 2022, following monetary measures by the Bank of Ghana.

However, in relation to the Gross Domestic Product of the country, the debt was estimated at 78%. This is slightly lower than the 80% recorded in December 2021.

According to the figures, the debt inched up by ¢20.5 billion in January 2022 and subsequently ¢19.7 billion in February 2022.

In terms of the domestic debt, it went up by ¢8 billion in the first quarter of 2022 to ¢189.9 billion in March 2021. This is equivalent to 37.8% of GDP.

Also, the external component of the total public debt shot up to $28.4 billion (¢201.9 billion) in March 2022, from $28.1 billion in December 2021. From the figures, clearly one can deduce that there were no borrowings from the external front in the first quarter of this year.

The debt-to-GDP ratio of the external debt is however approximately 40.2% of GDP.

The cedi component shot up by ¢31.9 billion in the first three months of 2022, primarily due to the decline in the value of the cedi to dollar during the period.

On the other hand, the financial sector resolution bond went down to ¢14.6 billion in March 2022, from ¢14.9 billion recorded in December 2021. This is equivalent to 2.9% of GDP.

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