IFS flags weak fiscal returns from Ghana’s booming gold exports

The Executive Director of the Institute for Fiscal Studies (IFS), Dr. Saide Boakye, has raised concerns about the limited fiscal returns Ghana is deriving from the rapid expansion of gold production and exports, particularly from the small-scale mining sector.

According to Dr. Boakye, the significant increase in gold exports in 2025 did not result in a proportionate increase in government revenue, raising questions about the effectiveness of the country’s mining fiscal regime.

He said the development was particularly worrying at a time when Ghana was recording strong growth in gold production and exports, with the small-scale mining sector emerging as a major contributor to the country’s gold economy.

Dr. Boakye explained that the small-scale mining sector contributed GH¢10.8 billion to the total value under review, representing 51.5 per cent.

He said the sector’s growing dominance in gold production and exports should ordinarily have been reflected in government revenue through mineral royalties, corporate income tax and other fiscal instruments.

Dr. Boakye said gold production and exports increased by 103 per cent in 2025, but mineral royalties collected by the government increased by only 21 per cent.

He explained that mineral royalties rose from GH¢364 million in 2024 to GH¢441 million in 2025, a rate of growth significantly below the expansion recorded in gold exports.

The figures, he argued, highlight a major disconnect between the performance of Ghana’s gold sector and the revenue accruing to the state.

“Gold production export increased by 103 per cent, mineral royalty increased by only 21 per cent,” Dr. Boakye said.

He noted that while the value of gold exports was being measured in billions of Ghana cedis, mineral royalties were generating only hundreds of millions of cedis, despite the substantial increase in production and exports.

Dr. Boakye said the situation becomes even more concerning when the contribution of small-scale mining is considered.

He cited information published by the Minerals Income Investment Fund, which, according to him, indicated that all gold royalties collected in 2025 came from the large-scale mining sector.

This was despite the small-scale sector accounting for 51.5 per cent of the gold production and exports under consideration.

The IFS Executive Director questioned why a sector responsible for more than half of the gold output was not contributing proportionately to government revenue through mineral royalties.

He said the apparent absence of royalty collections from the small-scale sector was a major factor behind the relatively low growth in mineral royalty revenue compared with the expansion in gold exports.

“The small-scale sector produced more and exported more than the large-scale sector, yet all the royalties collected from the gold sector came from large-scale, with no collection from the small-scale, despite it constituting 51.5 per cent,” he said.

According to him, the figures demonstrate that Ghana's current fiscal framework is not adequately capturing the economic value generated by the small-scale mining industry.

Dr. Boakye said the problem was not limited to mineral royalties.

He disclosed that information obtained through IFS enquiries into Ghana’s mining revenue system showed that other important revenue instruments were also generating little or no revenue from the small-scale mining sector.

These include corporate income tax and other fiscal obligations applicable to mining operations.

He said the situation meant that Ghana could experience substantial growth in gold production and exports without seeing a corresponding improvement in domestic revenue mobilisation.

This, he warned, could undermine government efforts to address fiscal pressures and reduce dependence on borrowing.

Dr. Boakye argued that Ghana must ensure that the economic benefits of the country's natural resources are properly captured through the tax and royalty system.

He cautioned against a situation where increases in gold production and exports translate mainly into higher earnings for operators and other actors in the value chain, while government revenue remains relatively stagnant.

“Allowing such a situation to persist means the government is not interested in ensuring that growth in gold exports yields anything close to commensurate growth in fiscal revenue from the sector,” he said.

He stressed that the objective should not simply be to increase gold production and exports but also to ensure that the state receives an appropriate share of the economic value generated from the exploitation of the country's mineral resources.

Dr. Boakye said the concerns over mining revenue formed part of four major weaknesses identified by the IFS in its assessment of the 2026 Mid-Year Budget Review.

The Institute has also raised concerns about the execution of the 2026 budget, particularly the significant shortfall in government expenditure during the first half of the year.

Dr. Boakye previously noted that government had programmed to spend GH¢172.5 billion, including arrears payments, during the first half of 2026, but actual expenditure fell short by GH¢35.6 billion, representing 20.6 per cent of the budgeted amount.

Capital expenditure recorded a shortfall of GH¢14.35 billion, while arrears payments fell short by GH¢8.64 billion.

He argued that these expenditure categories were critical to economic activity because capital spending supports investment and infrastructure development, while the payment of government arrears provides liquidity to contractors, suppliers and businesses.

Against this background, he maintained that Ghana must improve both the execution of its expenditure plans and the mobilisation of domestic revenue.

For the mining sector specifically, Dr. Boakye's concerns suggest that the country's strong gold performance needs to be accompanied by stronger mechanisms for capturing fiscal revenue, particularly from small-scale mining.

The IFS therefore sees the gap between rising gold exports and relatively weak growth in mining revenue as a significant fiscal challenge that requires urgent policy attention.

Story by: Joshua Kwabena Smith