- Ghana’s Small-Scale Gold Boom Lifts Forex Earnings but Leaves Fiscal Revenue Gap — IFS
Ghana’s record expansion in artisanal and small-scale gold production is strengthening export receipts and foreign-exchange inflows, but the boom is yet to translate into a comparable increase in fiscal revenue, exposing what the Institute for Fiscal Studies says is a major weakness in the government’s revenue strategy.
The policy think tank has criticised Finance Minister Dr Cassiel Ato Forson for failing to use the 2026 Mid-Year Budget Review to set out a clear strategy for extracting greater fiscal value from one of the fastest-growing segments of Ghana’s mining industry.
Small-scale mining accounted for about 51.50% of Ghana’s gold exports in 2025, according to the IFS. Production from the artisanal and small-scale sector reached a record 104 tonnes during the year, overtaking large-scale mining output for the first time.
GoldBod data indicate that artisanal and small-scale miners generated almost US$11 billion in foreign-exchange earnings in 2025, compared with roughly US$9 billion from large-scale producers. During the first half of 2026, GoldBod purchased about 50 to 54 tonnes from the sector, putting output on course to remain exceptionally strong.
For the IFS, however, the more important question is no longer simply how much gold Ghana produces or exports, but how much of the value generated by that production ultimately reaches the national budget.
“It is appalling to note that the Mid-Year budget review fails to articulate government strategy on how to increase revenue from the small scale mining sector looking at how critical the sector is, and the potential it holds for our economy,” IFS Executive Director Dr Said Boakye said.
The criticism highlights an important distinction in Ghana’s economic recovery.
Higher gold exports can strengthen reserves, improve the balance of payments and support currency stability without automatically generating an equivalent increase in tax and royalty receipts. For a government attempting to consolidate the public finances while still financing infrastructure and social programmes, that gap matters.
“We were told by reports from the Bank of Ghana that even the small scale mining sector generates more than the large scale and so it is very disappointing for the Finance Minister to miss the opportunity at this critical time,” Dr Boakye said.
The IFS position suggests that formalisation of the small-scale mining sector must now extend beyond regulating gold purchases and exports towards creating a transparent fiscal framework capable of capturing royalties, income taxes and other legitimate state revenues.
That will require careful calibration.
If taxes and charges are set too high, they could encourage smuggling or push operators back into informal channels. But if policy focuses mainly on increasing official export volumes and foreign-exchange accumulation while fiscal receipts remain weak, the Treasury risks being disconnected from one of the country’s most valuable natural-resource booms.
GoldBod’s growing role has already improved the formal architecture for purchasing and exporting artisanal gold. The state institution reported that small-scale miners exported about 103 tonnes valued at roughly US$10.80 billion in 2025, compared with 96.60 tonnes worth approximately US$9.20 billion from large-scale producers.
The next stage may therefore depend on stronger traceability, digital transaction records, clearer producer identification and better integration between gold trading and the tax system.
GoldBod has already announced a traceability programme initially involving about 600 artisanal and small-scale mining operations. If implemented effectively, such infrastructure could eventually help authorities establish more reliable information on production, sales and ownership across a sector that has historically been difficult to tax.
The IFS concern is reinforced by weakness elsewhere in the budget.
Government programmed expenditure of GH¢172.54 billion for the first half of 2026, but actual spending, including arrears payments and discrepancies, amounted to about GH¢136.94 billion. That represents a shortfall of GH¢35.60 billion, or about 20.60%.
Capital expenditure was particularly affected, reaching GH¢22.18 billion against a target of GH¢36.56 billion.
“Government expenditure has been low on key sectors and we must admit that this is happening because there’s not much revenue inflow as expected. This is likely to affect the whole budget planning because government policies are going to be affected,” Dr Boakye said.
Revenue and grants reached GH¢124.78 billion during the first half, about GH¢1.37 billion below target. Tax revenue stood at GH¢103.77 billion against a programmed GH¢105.26 billion, while non-tax revenue of GH¢12.27 billion also fell short of the GH¢14.90 billion target.
A government facing difficulty executing capital expenditure because revenues are under pressure has a strong incentive to capture more value from sectors experiencing extraordinary growth. Small-scale gold mining is now one of the clearest candidates.
The more durable solution would be a system that expands formalisation, improves traceability and allows government to tax economic activity more effectively without undermining incentives for miners to sell through official channels.
That distinction is critical because Ghana has already demonstrated that formal gold purchasing can materially strengthen foreign-exchange inflows. The next policy test is whether that success can be translated into sustainable fiscal revenue.
If government continues to rely heavily on expenditure restraint to meet fiscal targets while revenue mobilisation underperforms, consolidation could increasingly come at the expense of infrastructure and other productive investment.
“The considerable underspending in the first half of 2026 relative to budget plan not only undermined the budget’s credibility but more importantly it also left much to be desired in terms of growth and development of the country,” Dr Boakye said.
The small-scale gold sector therefore sits at the intersection of two of Ghana’s most important economic objectives: strengthening the external position and rebuilding the public finances.
