Ghana Chamber of Mines Challenges Methodology Behind Exchange Rate–Retention Analysis by Joe Jackson, Calls for Consistent Data Framework
The Ghana Chamber of Mines has welcomed ongoing public discourse on the drivers of exchange rate volatility, saying sustained stakeholder engagement is critical to strengthening macroeconomic stability and informing durable policy solutions.
In a statement responding to recent commentary by the Chief Executive Officer of Dalex Finance, Joe Jackson, the Chamber commended his contribution to the debate, particularly his presentation titled “Ananse Stories about the Economy of Ghana”, excerpts of which have been widely circulated in the media.
While acknowledging the relevance of questions raised regarding the link between export earnings and exchange rate dynamics, especially within the mining sector, the Chamber said certain methodological issues in the analysis require clarification to ensure consistency and accuracy in interpretation.
Scope concerns in retention estimate
A key issue raised by the Chamber relates to the estimation of a 46.2% “retention ratio,” derived from the ratio of estimated in-country expenditure of US$5.5 billion to mineral export earnings of US$11.9 billion.
According to the Chamber, the US$5.5 billion figure reflects broad domestic economic activity generated by large-scale mining firms, including wages, taxes, and local procurement. It noted, however, that this measure only captures expenditure from its member companies, which represent large-scale miners.
It argued that this creates a mismatch in scope, as the export figure represents total national mineral exports—including both large-scale and small-scale mining—while the expenditure data reflects only a subset of the industry.
The Chamber said this inconsistency results in a comparison between sector-wide output and partial domestic activity, which it described as likely understating the mining sector’s overall contribution to the economy.
Small-scale mining exclusion flagged
The Chamber further highlighted the omission of Ghana’s small-scale mining subsector, which it said accounted for about 40% of gold exports in 2024.
It argued that excluding this segment from domestic expenditure estimates, while including its output in total exports, materially distorts any calculated retention ratio.
According to the Chamber, a consistent framework must incorporate both large-scale and small-scale mining activity to produce an accurate assessment of sector-wide value retention.
Illustrative adjustment suggests higher retention
Using a simplifying assumption that domestic expenditure approximates retained value, the Chamber indicated that incorporating the small-scale mining sector—assuming its proceeds remain within the domestic economy—would significantly raise the estimated retention ratio.
It said this illustrative adjustment challenges the conclusion that less than half of mineral export value is retained locally, although it stressed that the assumption is used strictly for explanatory purposes and does not fully reflect actual value flows.
Methodological limitations highlighted
Beyond scope concerns, the Chamber cautioned that both export earnings and expenditure figures are aggregate indicators that may include imported components, potentially overstating domestic value creation.
It therefore warned that direct comparisons of such aggregates, without decomposing their underlying elements, may lead to distorted conclusions about the sector’s contribution to the economy.
The Chamber added that domestic value-added measurement remains the most robust framework for assessing true economic retention, as it avoids distortions associated with gross flow comparisons.
Policy implications
On the basis of these concerns, the Chamber urged caution in interpreting conclusions that suggest the mining sector retains less than half of its export value and that this is a primary driver of exchange rate weakness.
It argued that such interpretations risk being shaped by methodological inconsistencies and incomplete coverage of the sector.
Reaffirming its position, the Chamber said it remains committed to constructive, evidence-based engagement on Ghana’s macroeconomic challenges, adding that a more comprehensive analytical framework would better support policy design aimed at currency stability and long-term economic resilience.
