Ghana is home to a lot of mineral resources and gold is no doubt one of our main minerals that generate revenue for the country. However, mining activities by the extractive industry has posed serious threats to the country. I am not oblivious of the fact that taking an entrenched legal decision on the negative impacts of the extractive industry will be received with an uproar, but we also need to make serious decisions to safeguard the nation’s interest.
Having lived in a Gold and Diamond mining community in the Eastern region for a year, I have come to terms with the impact of the extractive sector’s activities on the economic, social and political life of the indigenes and the country at large.
It is one of the main sources of income for workers in the small scale mining, independent and galamsey fields. I am a witness to how much gain and harm has resulted from the activities of operators and players in the extractive industry more so the gold business. For instance, rivers like the Birim that have gold deposits in them have been dug out to irredeemable levels where there is now polluted water replacing what once was potable.
Let me hasten to add that, I am in support of the recent campaign to end galamsey in Ghana especially as our agricultural goods and sources of water stand to be plagued by its negative effects when chemicals are released into the soil in farming areas by miners. There are times when people are seduced to out rightly sell arable farm lands to independent gold dealers in hopes of getting gold from those lands, the results from such quests lead to the destruction of the ecosystem and lands that once contributed to the food basket of the country and beyond.
Let’s look at the financial cost of galamsey and the extractive industry’s activities. Various sources of information have postulated that, the general investment climate including the extractive industry in Ghana is good and therefore supports a lot of investor targets and potential for growth, one may wonder if it is due to the numerous tax incentives offered by the government to attract investors. Ironically, there is also a lot of revenue being leaked out of the country through Illicit Financial Flows despite the huge investment potential and the extractive industry is not exempted.
Illicit financial flows are tax revenues that are transferred out of countries that are entitled to them. In Africa, we lose about $50 billion annually to illicit financial flows. Ghana needs to push for mandatory country by-country and project-by-project reporting requirements immediately in the extractive sectors to block the leaks.
When we lose our natural resources and lose our revenues too, we have lost in two dimensions and we will have to live with the immediate and long term consequences of our actions or negligence.
Taxes are relevant but we must not use them in addressing preventable challenges like the effects of galamsey and mining as a whole, it is in light of this that I say laws must be enacted and enforced to check the activities of the extractive industry. Taxes are building blocks for countries worldwide and developing countries need tax revenues now more than ever. It is what pays for roads, hospitals, job creation, potable drinking water among others.