Economic Benefits Associated with Mineral Production in Ghana

ABSTRACTGhana is endowed with many natural resources which have contributed significantly to the nation's economic development. In this study, the economic benefits of Gold, Diamond, Bauxite and Manganese in terms of production, revenue from export as well as contributions to government revenue in the form of taxes between the years 1990 to 2011 and their projections from 2012 to 2030 were analysed and compared. Data was collected from Ghana Chamber of Mines, Ghana Mineral Commission, Bank of Ghana, Environmental Protection Agency and other relevant institutions combined with secondary related materials. Statistica software was used for the data analysis where a liner regression models were developed to describe the trend of the various minerals economic benefits. The immense benefit that comes with mining will continue if the state improves on policies of less mined minerals and implement prudent economic policies. Effective monitoring of regulatory institutions linked with the sector for implementing environmental policies and adoption of international standards of mining would help to prevent negative pressure from anti mining institutions.Keywords: Corporate Social Responsibility; Economic Recovery Programme; Mining; Royalties; Corporate tax.INTRODUCTION:Mining in Ghana is one of the lucrative sectors for employees, governments as well as employers in so many ways. The mining industry is actually a huge contributor to Ghana Revenue Authority (GRA) through various forms as; employee income tax, payments of mineral royalties, corporate taxes and other levies (Ghana Chamber of Mines, 2012). The mining sector contributes about 12% of state revenue, 41% of the nation's total export earnings and 7% of country's total corporate gains (Aryee, Aboagye, 2008). Total royalty paid to government by mining companies in 2005 was estimated at US $ 26.76 million, later appreciated to US $ 38.46 million and US $53.80 in 2006 and 2007 respectively. The mining sector contributed 6.44 per cent of the state's Gross Domestic Product (GDP) with labor force of 17,500 (Boon, Ababio, 2009). Mining companies in Ghana play significant role in development of communities but these contributions from the sector are yet to be seen by the public as significant factor to the development of the country.During the 14th to 19th Centuries, the then Gold Coast now Ghana, manufactured about 14 million ounces of gold with the use of traditional tools and methods. The British in the 19 th Century pave the way for modern technologies after they took over the Ashanti Kingdom (Ayensu, 1997). In other to limit or eradicate this bad perception, companies have to implement various developmental projects or corporate social responsibilities within and outside their catchments. Based on the understanding of contributions of companies towards their communities and nations from various literatures can be described by the writer as "voluntarily contribution of corporate entities without duress from groups or group of persons, pressure groups, communities or governments. It is solely based on moral justice to win support from internal and external environments in which organization operates since there are no laws to enforce companies to contribute towards their communities or state in which they mined. On the part of industries, it has corporate reasons of contributing to both communities and the state. The purpose is to gain competitive advantage over others in addition to maintaining and receiving stable working environment. Companies enjoy good reputation from the public as a result of corporate social responsibility (Frynas, 2005).Ghana also produces other minerals as aluminum metal and manganese ore, bauxite, diamond and other minerals such as kaolin, limestone, salt, sand, gravel, etc. In fulfillment of development, the Provisional National Defense Council (PNDC) launched a neo -liberal Economic Recovery Program (ERP)/Structural Adjustment Program (SAP) in 1983 which resulted in increased in gold mining. …