Ghana losses GHS 50m in annual royalties from the quarry sector
Chief Executive Officer of the Minerals Income Investment Fund (MIIF), Edward Nana Yaw Koranteng, has revealed that the quarry sector loses over GHS 50 million annually in royalties.
He noted that the quarry sector which should fetch the country about GHS 100m in royalties every year, only accrued to government a meagre GHS 3.8m in 2020.
He attributed the decline in revenue from the quarry sector to the country’s over-concentration on gold resources.
“92% of our royalties are coming from gold, so there is a leaning towards gold because that is where we have our most royalties. So, that is the problem. If you look at the quarry sector, it is in line with our economic and infrastructure development.
“So as far as you have infrastructure and economic development growing, there should be a corresponding increase in its royalties. We are supposed to have about, GHS 100million in royalties annually. In a worst-case scenario, we should have at least GHS 35 million to GHS 56 million but in 2020 we had only GHS 3.6 million which means there is a big problem with the quarries“, said Mr Koranteng speaking at the opening of the 2022 Ghana Mining Week and Gold Expo in Takoradi.
He further explained that with the invasion of the sector by foreigners, the government needs to strategize properly to expand the royalties net and add value to the quarry sector.
“We have identified four main problems with the quarries including invasion by foreigners, underpricing, lack of capital and encroachment by settlers within the catchment of quarries. If we have to expand our royalties and add value to the quarries sector, then we need to strategize properly.
“So for me to get GH¢100 million royalties annually from the quarries, there are a few things we are doing now. We are trying to support the quarry sector by introducing what we call de-risking mechanisms, which is essential to provide guarantees to banks that desire to support the quarry sector“, he added.
Expanding the scope of mineral resources that can bring more royalties to the state, the CEO of MIIF said if Ghana doesn’t take care, it will even start importing stones anytime soon.
“Our research shows that there is a huge potential in the other mineral sector. Quarry is one and salt is another. There are only two countries, Ghana and Senegal that have the potential to provide industrial salt, but Nigeria keeps bypassing us to Brazil to bring salt to support their petroleum industry. The potential of salt considering the fact that gold is more finite makes salt much bigger in terms of long-term sustainable value than gold,“ he noted.
