Acting Chief Executive of the Ghana Chamber of Mines, Ahmed Nantogmah, has criticised what he describes as the chronic misdirection of mineral royalties.
He warns that mining communities across the country are decaying while the bulk of mining revenue remains concentrated in Accra.
Speaking on PM Express Business Edition on Thursday, May 22, Mr Nantogmah stated that “Mineral royalties stay in Accra while communities rot.”
He said, although mining companies invest heavily in their host communities – building schools, clinics and roads – the returns from mineral royalties, which are supposed to go back to these communities through local assemblies and traditional authorities, are rarely used for development.
“You go to some communities, and the schools and hospitals there are run by the mining companies. The mining company cannot do everything,” he said.
“When the royalties are paid, they are supposed to return some to the host communities. But are they being used for that development?”
Mr Nantogmah cited the case of Gold Fields Ghana, which, despite already paying royalties to the state, still had to build a 33-kilometre road in its host community.
[embedded content]“Why would an assembly that gets mineral royalties go back to Gold Fields and say come and develop the road for me?”
He called for a Mineral Revenue Management Law to regulate how royalties are used.
“We’re asking for an act or a law that will regulate the utilisation of mineral royalties. There’s one for petroleum revenue management—why can’t we do something for mining?”
He believes such a law should restrict the use of royalties to development essentials like education, health and sanitation.
“So when it comes back to the community, they don’t use it to pay salaries or recurrent expenditure,” he said.
“If the law stipulates what you can use mineral royalties for, you are bound by law to use it that way.”
He challenged the idea that mining companies alone are responsible for the poor state of mining communities.
“Look at Obuasi. The question is, do the royalties come back? And if they do, what are they being used for?”
According to Mr Nantogmah, a recent study found that about 80% of the benefits of Ghana’s minerals are concentrated in Accra, while the mining communities see very little impact.
“So Ghana is developing on the back of mining. But the local communities are not.”
He insisted that the blame for underdevelopment must also fall on the local authorities and state institutions that mismanage the royalties.
“Let’s ask questions of the development authorities, too,” he said. “Let’s make sure mineral royalties are targeted.”
He concluded with a call for planning and coordination.
“If the town is not properly planned, it’s not the job of the mining company to make the street straight or to build skyscrapers. We need proper laws and targeted investments.”
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