2021 Resource Governance Index: Performance of Ghana’s mining sector described as “satisfactory”
The Natural Resource Governance Institute (NRGI) in its 2021 Resource Governance Index assessment of Ghana’s mining sector, has described the performance of the sector as “satisfactory”.
The mining sector per the NRGI’s resource governance index, attained a composite score of 69 out of 100 points.
The score marks 13 points increase in the 56 points score recorded by the index in 2017.
The increase in score was due to improvements across both the index’s value realization and revenue management components, with notable increases in governance of local impacts and national budgeting.
According to the NRGI, the following accounted for the higher composite score of 69 points by the country’s oil and gas industry in its resource governance Index;
- Key areas within the licensing and subnational resource revenue sharing subcomponents were still classified as “failing,” reinforcing the need for legislation and further disclosures.
- Within value realization, the taxation subcomponent increased by 10 points to score 82 out of 100 points, moving it into the “good” performance band, while local impact improved by 29 points, scoring 100.
- Ghana’s national budgeting governance improved due to the adoption of, and adherence to, fiscal rules.
- While both law and practice scores improved since the 2017 RGI, the gap between them grew from -8 to -15 points. Enacted laws and rules must be adhered to by relevant state authorities to prevent the implementation gap from growing wider.
- Weak adherence to open data standards, as well as the absence of online data portals related to the extractive sector, has held the mining sector back.
- Ghana’s oil and gas sector outperformed the older gold mining sector owing to enhanced transparency and accountability in the oil and gas sector legislative framework.
Ghana’s gold mining sector is one of the oldest in Africa, and retains a crucial role in the Ghanaian economy. In 2019 gold exports were valued at $10.8 billion, comprising 50 percent of all merchandise exports.
The governance of the mining sector has improved since the 2017 RGI, driven by a 22-point increase in the index’s value realization component, and a 17-point increase in revenue management. Ghana’s enabling environment has continued to provide a good foundation for resource governance.
The Resource Governance Index (RGI) serves as a key point indicator in the extractive sector governance in resource-producing countries around the world. It also serves as a global benchmark, country and sector diagnostic tool, and a roadmap for policy and practice reform.
The 2021 Resource Governance Index assesses how 18 resource-rich countries are managing their oil, gas, and mineral wealth. The composite index has three components. Two measure essential characteristics of the extractive sector, namely value realization and revenue management, and the third analyses the enabling environment.
