Ghana’s mining sector reeled this week after the government blindsided companies with a decision to triple the Growth and Sustainability Levy from 1% to 3% on gross production, a move industry leaders warn could destabilize one of the economy’s few bright spots.
The tax hike, buried in Finance Minister Cassiel Ato Forson’s 2025 budget without prior consultation, marks a sharp reversal from earlier signals of modest adjustments and has ignited fears of eroded investor confidence.
“This isn’t just about the rate—it’s about trust,” said Sulemana Koney, CEO of the Ghana Chamber of Mines, who learned of the policy less than 24 hours before its announcement. He revealed that companies had been in active talks with investors to expand operations amid soaring gold prices, but the abrupt levy increase now threatens to derail those plans. “Investors need predictability. How do you explain a sudden tripling of costs with zero dialogue?” Koney added, noting the levy’s application to revenue before cost deductions would squeeze margins already strained by existing taxes.
The government defended the hike as a necessary step to capture more value from a sector that contributes 14% of GDP but only 1.5% of state revenue. Forson argued Ghana’s mineral wealth has been “under-monetized,” though critics counter that the move ignores the sector’s heavy upfront capital costs and volatile commodity cycles. The decision also extends the levy’s sunset clause by three years to 2028, raising suspicions that the “temporary” measure could become permanent—a pattern familiar to industries in other resource-dependent economies.
For miners, the fiscal whiplash underscores a deeper anxiety: Ghana’s reputation as a stable investment destination is at risk. While the nation has long touted its peaceful political transitions, executives say erratic policy shifts—like the 2023 VAT hike on mining supplies—are chipping away at its appeal. “Stability isn’t just about elections; it’s about knowing the rules won’t change overnight,” Koney said, warning that exploration budgets and long-term projects could face cuts if the levy stands.
Analysts note the timing is precarious. Gold prices remain near record highs, but rivals like Burkina Faso and Mali are courting investors with lower fiscal burdens. Meanwhile, Ghana’s own history offers cautionary tales: a 2012 windfall tax triggered a five-year slump in mining investment. While the state aims to narrow its budget deficit, the industry argues collaboration—not unilateral taxes—would better balance revenue needs with growth.
The standoff leaves Ghana at a crossroads: leverage its mineral boom to stabilize public finances or risk an investment exodus that could leave its gold underground—and its fiscal holes unfilled.
