Joe Jackson Rebuts Chamber of Mines’ Claims of Methodological Flaws in Export Earnings Retention-Exchange Rate Analysis
Chief Executive Officer of Dalex Finance, Joe Jackson, has pushed back against criticisms by the Ghana Chamber of Mines over his analysis of the relationship between mining sector export earnings and exchange rate dynamics.
The Chamber had earlier questioned the methodology underpinning Mr Jackson’s estimates, particularly his calculation of a 46.2% “retention ratio” based on US$5.5 billion in in-country expenditure relative to US$11.9 billion in mineral export earnings.
According to the Chamber, the US$5.5 billion figure represents aggregate domestic economic activity generated by large-scale mining firms covering wages, taxes, and local procurement, but is limited to its member companies. It argued that juxtaposing this figure against total national mineral export earnings, which include both large-scale and small-scale mining, introduces a mismatch in scope and risks understating the sector’s overall contribution to the economy.
The Chamber further cautioned that conclusions suggesting the mining sector retains less than half of its export value, and that this significantly drives exchange rate pressures, may be influenced by incomplete sectoral coverage and methodological inconsistencies.
However, speaking during an X Space discussion themed “Ananse Stories About the Economy of Ghana,” on NorvanReports and the Economic Governance Platform (EGP), Mr Jackson defended his approach, insisting that his analysis relies on official data, primarily from the Bank of Ghana.
He explained that Ghana’s gold export earnings stood at approximately US$11.9 billion in 2024, while crude oil exports contributed an additional US$3.9 billion over the same period.
Mr Jackson noted that the US$5.5 billion domestic injection figure attributed to the mining sector was sourced from industry disclosures, including statements linked to the Chamber itself.
“Even if we take their US$5.5 billion figure as accurate, it still implies that less than 50% of export value is retained within the economy,” he stated.
Based on this, he maintained that the implied retention ratio of 46.2% points to a net leakage of 53.8%, equivalent to approximately US$6.4 billion in 2024.
Mr Jackson argued that the scale of this external leakage has material implications for Ghana’s foreign exchange dynamics, reinforcing concerns about structural pressures on the local currency.
The exchange between both parties underscores ongoing debate over how best to measure the mining sector’s true economic impact, particularly in relation to foreign exchange retention and its influence on macroeconomic stability.
Background
Mr Jackson has attributed the persistent depreciation of the Ghana cedi to structural foreign exchange leakages rather than the widely held view that excessive imports over exports are the primary driver.
He argues that significant outflows from service imports, profit repatriation, and debt servicing continue to erode Ghana’s foreign exchange gains. Providing an analysis based on 2024 data, he explained that although Ghana recorded a strong trade surplus of $5.1 billion, this was largely offset by substantial financial outflows.
According to him, net service imports alone accounted for $3.89 billion, representing payments to foreign entities for services rendered within the country. He further noted that profit repatriation by foreign-owned firms operating in Ghana amounted to $2.98 billion over the same period.
Combined, these two components resulted in an outflow of over $6.8 billion, effectively exceeding the country’s trade surplus. Mr Jackson added that debt servicing obligations further compound the pressure on Ghana’s foreign exchange reserves.
He further indicates that debt service payments for 2024 stood at approximately $2 billion, bringing total outflows from these key components to about $7.96 billion.
