Impact of economic policies on the mining sector
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Date
2002-12-11
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Abstract
Ghana has been exploiting minerals especially gold, diamond and manganese for over a century and making significant contribution to the world’s production of these minerals. However, as a result of a general decline in the economy of the country, the production of these minerals reduced significantly between 1960 and 1983.
To revitalize the industry, the Government of Ghana enacted an attractive Minerals and Mining Law, PNDCL 153, in 1986 as part of its economic reform policy. Consequently, mining activities increased, with 10 mining companies coming into production by 2000, and it is now generally believed that mining is making a significant contribution to the economy of the country. To ascertain this general belief, this thesis was set out to study the economic policies of the government and their impact on the performance of the mining sector over the 15- year period, from 1986 to 2000.The performance of the mining sector has been studied by analysis of the sector’s contribution to employment, government revenue generation, gross foreign exchange earnings and Gross Domestic Product (GDP).
The results of the study show that the mining sector accounted for 4 % of formal sector employment over the 15-year period, 14 % of the total revenue collected by the Internal Revenue Service by 1995, and over 36 % of the gross foreign exchange earnings over the 15-year period. These performances confirm the general assertion that the mining sector is making a significant contribution to the country’s economy. This however, is deceptive as the results of the study also show that the mining sector’s contribution to real GDP, which is a better measure of an industry’s contribution in an economy, was less than 10%.
As part of this thesis, alternative policies to improve on mining sector’s contribution to the country’s GDP have been proposed and it is recommended that the Minerals and Mining Law, PNDCL 153,which is being reviewed should include these alternative policies.
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A thesis submitted to the School of Graduate Studies in partial fulfilment of the requirements of the degree in Mining Engineering, 2002