Government’s proposed sliding-scale mining royalty regime colonial-IEA

The Institute of Economic Affairs (IEA) has come out strongly against government plans to introduce a sliding-scale royalty regime for mining, arguing that the proposal keeps Ghana trapped in an outdated, extractive model that delivers limited value to the country.

In a press statement issued on Tuesday, the policy think tank rejected the draft Minerals and Mining (Royalty) Regulations 2025, which would set royalties at 5% to 12% for minerals including gold and lithium. It said the same draft proposes a flat 5% rate for diamonds, bauxite, manganese, salt, limestone and iron ore.

The IEA also questioned reports that the Ministry of Lands and Natural Resources is considering a separate bill that would extend a 9%–12% sliding-scale royalty across the wider mining sector. It described the ministry’s posture as confusing and at odds with President John Dramani Mahama’s stated direction on resource sovereignty.

To make its case, the institute cited a series of the President’s public remarks over the past year. It referenced comments in March 2025 in support of reviewing mining agreements to ensure Ghana earns more from its natural endowment. It also pointed to his statements at the UN General Assembly in September 2025 calling for Africa to assert sovereignty over its natural resources, and his remarks at the World Economic Forum in Davos in January 2026, where he warned that supplying critical minerals while capturing little value amounted to a “trap”.

The IEA argues that the problem is not the percentage point on royalties, but the structure behind it. In its view, royalty systems, whether fixed or variable, leave ownership and control in private hands, while the state takes only a small slice of the proceeds.

Instead, it is urging a decisive shift to full national ownership, with private operators engaged only through service contracts—whether those operators are local or foreign. The institute said comparable approaches have been used in countries such as Norway, Botswana and Chile, as well as in several oil-producing states.

With a number of mining leases expected to expire in the coming years, the IEA said Ghana has an opening to reset policy without tearing up existing agreements. It called on government not to renew expiring leases, but to adopt a new framework built around state ownership and contracted services.

It also rejected arguments that Ghana lacks the expertise or financing to manage its resources directly, pointing to Ghanaian mining professionals and local firms already active in the industry. The institute said the real constraint, in its view, has been political will.

The statement ends with an emphatic dismissal of the proposed royalty reforms and a push for a governance model that, it says, ensures Ghana keeps ownership of its mineral wealth for national benefit.