The Institute of Economic Affairs (IEA) has called on the Government of Ghana to take immediate action in renegotiating contracts related to the country’s natural resources, arguing that current agreements favor foreign firms at the expense of national development.
At a press briefing in Accra on Monday, Justice Sophia Akuffo, a former Chief Justice and Fellow of the IEA, stressed that Ghana must secure at least 60% of revenue from its vast natural resources, estimated to be worth over $10 trillion. She argued that unfair concession agreements have allowed foreign companies to reap disproportionate benefits from Ghana’s gold, oil, bauxite, iron ore, and other resources, leaving the country with minimal returns in royalties and taxes.
Justice Akuffo urged the government to learn from countries like the United Kingdom, Australia, Qatar, Tanzania, Botswana, Angola, and Eritrea, which have successfully revised their mining and resource laws to increase national revenue shares.
She highlighted examples, including:
- Angola, where petroleum income tax under Production Sharing Agreements is 50%, while other contracts have tax rates as high as 65.75%.
- The UK, where corporate taxes on oil and gas firms include a 30% ringfenced corporation tax, a 10% supplementary charge, and a 38% energy profits levy.
- Eritrea, which legally mandates up to 40% state equity participation in mining investments.
Justice Akuffo described Ghana’s current agreements as outdated “Guggisberg-type contracts” that prioritize foreign interests over national benefits, insisting that the country must adopt modern resource management strategies that give Ghanaians a fair share of profits.
To facilitate this process, Justice Akuffo proposed the establishment of a five-member expert committee to review existing contracts and laws and recommend amendments that maximize national benefits. She also advocated for Ghana to adopt:
- Wholly Ghanaian-owned production lines or
- Joint ventures with foreign partners that ensure cost and profit-sharing models favor the country.
Dr. John Kwakye, Director of Research at IEA, criticized Ghana’s resource management, stating, “We are rich underground but poor on the surface.” He argued that over $10 trillion could be generated from natural resources with the right policies. He even suggested that if necessary, the IEA would support street protests to demand reforms.
Similarly, Dr. Kwabena Nyarko Otoo, Deputy Secretary General of the Trades Union Congress (TUC), pledged TUC’s full support in pushing for changes to foreign-dominated resource contracts. He urged the government to take bold steps in reclaiming control over Ghana’s resources to ensure long-term national prosperity.
With Ghana facing a rising debt burden and economic challenges, calls for a fairer resource management system continue to grow, as experts argue that reclaiming greater control over natural resources is key to economic transformation.
