"Deloitte is a key stakeholder to the industry, providing input in the development of various mining laws over the years."

George Ankomah

PARTNER, DELOITTE GHANA

February 28, 2022

Could you briefly introduce Deloitte Ghana?

Deloitte has a long history in the country, dating back to 1947. The Firm has grown into one of the largest professional services firms in Ghana, with a strong countrywide representation. Deloitte Ghana offers the full range of global services tailored to our clients’ needs. In mining, we have assisted numerous industry players with everything from general consultancy, including feasibility studies, to tax advisory and other regulatory services, audit and assurance services, accounting services, immigration support services, as well as M&A support services like due diligence. Deloitte is a key stakeholder to the industry, providing input in the development of various mining laws over the years.

Could you help our audience better understand Ghana’s fiscal environment?

Under Ghana’s Constitution, every mineral in its natural state in, under or upon any land in Ghana, rivers, streams, water courses throughout Ghana, the exclusive economic zone and any area covered by the territorial sea or continental shelf is the property of the Republic of Ghana and shall be vested in the President on behalf of, and in trust for the people of Ghana.

The industry is heavily regulated, with government holding an automated 10% free carried interest in the rights and obligations of mineral operations in the country without having to contribute to equity. The other applicable fiscal requirements are:

· A 5% mineral royalty paid off from the total revenue earned

· A corporate income tax of 35% for mining companies and 25% for mining support services

· Payment of national fiscal stabilization levy (NFSL) at the rate of 5% of profit before tax up to 2024 by Mining support service providers

· Payment annual rental and mineral rights fees as prescribes by The Minerals Commission.

The Government has established a series of incentives as well: mining companies, as priority sector companies, are allowed to carry forward tax losses for a period of five years (three years for service support companies). Mining companies are also exempted from import duty on plant, machinery and equipment exclusively imported for mining operations (and mentioned on the Mining List); mining and equipment companies can also apply for a refund on the VAT incurred on these purchases.

In addition, mining companies can also negotiate special conditions for their stability agreements depending on the level of investment. Stability agreements are intended to protect the holder of a mineral right from the negative impact that regulatory changes can have for a specified period of time.

What are your key policy recommendations for the growth of the Ghanaian mining industry?

One of the key challenges is the issue of illegal small-scale mining. In some instances, Galamsey have encroached on the concessions of companies engaged in large scale mining, which tends to deprive mining companies of the opportunity to exploit their concessions fully. Also, informal mining creates significant damage to water bodies and farmlands. While the current intervention programs of the Government are yielding positive results, it is imperative that the Government does not relent in its efforts to make this practice more responsible and safer.
There is also an ongoing discussion about local content regulations. These regulations also prescribe joint ventures (JVs) between international and Ghanaian-owned companies in order to build capacity and eventually transfer knowledge to local people. I would encourage the Government to incentivize investors to hire locally and develop that much-needed local expertise for the development of the human resources capacity of Ghanaians in the mining industry.

How is Ghana working to diversify its economy?

The mining industry is an incontestable economic driver and a significant contributor to government revenue. Ghana’s economic growth over the last decade has been significantly driven by the export of its commodities, among which mineral resources, crude oil, as well as cocoa. The mining industry employs 34,363 direct and contracted people, according to the Ghana Chamber of Mines report on Mining Industry Statistics and Data 2020, so it is essential in the country’s fight against unemployment.

Do you have a final message for our audience?

Our aim is to make an impact that matters, both for our clients and for society at large. Deloitte Ghana remains available to support businesses and investors especially in this recovery phase from the effect of the pandemic. We have recently appointed three new partners and we are constantly investing in our people and in our commitment to grow Deloitte in Ghana.

INTERVIEWS MORE INTERVIEWS

"There are many opportunities for the chemical industry to support the development of better communication and efficiency across borders, fostering common regional interest."
"The growth of the automotive, aerospace, and electronics markets has ultimately helped our business, allowing us to provide added value in more areas."
" We aim to collaborate more with various industries in Mongolia, including mining, and customize our flights to meet their needs."
"We have also observed increased dialogue and a more market-friendly cabinet in Peru."

RECENT PUBLICATIONS

Mongolia Mining 2024 - Digital Interactive

Investors once came to Mongolia for its geology yet stumbled upon its legislative framework. How competitive Mongolia has become today, we will leave our readers to judge, hoping that this report provides them with the resources to make an informed assessment.

MORE PREVIOUSLY PUBLISHED

MACIG

"Namibia offers a compelling value proposition for investors looking to capitalize on the country's vast potential in the mining and energy sectors."

SUBSCRIBE TO OUR NEWSLETTER