Contribution to Gross Domestic Product (GDP) by the mining and quarrying sub-sector of Industry sector on a year-on-year basis declined by 1.1 percentage points in 2020.
According to the recently published 2020 Annual Report of the Ghana Chamber of Mines, recorded contribution of the mining and quarrying sub-sector to GDP for 2020 is 7.5 percent as against the recorded 8.6 percent contribution to GDP in 2019.
In monetary terms, the gross value added by the mining and quarrying sub-sector to Ghana’s GDP declined from Ghs 13.6 billion in 2019 to Ghs 11.8 billion in 2020.
Making the disclosure, President of the Chamber, Eric Asubonteng, noted that despite fall in the sector’s contribution to GDP due to the impact of the Covid-19 pandemic, the mining and quarrying sub-sector at the end of 2020 emerged the third and fifth largest economic activity in the industrial sector and the entire economy, respectively, regaining its position as the leading source of direct domestic revenue for government in 2020.
The Chamber also asserts that, the sector’s contribution to the national fiscal purse increased from Ghs 4.013 billion in 2019 to Ghs 4.172 billion in 2020.
According to the Chamber, the 3.97 percent increase in fiscal revenue was primarily due to the increase in mineral royalty receipts, which partially made up for the reduction in the other sources of revenue from the sector.
“The significant appreciation in the price of gold during the year under review increased mineral royalty revenue by 38.20 per cent from Ghs 1.007 billion in 2019 to Ghs 1.391 billion in 2020. Corporate income tax however declined from Ghs 2.269 billion in 2019 to Ghs 2.139 billion in 2020. Similarly, employee income tax (PAYE) also fell from Ghs 736.256 million to GH641.868 million over the same period. Other revenue sources from the sector also dropped from Ghs 674,312 in 2019 to Ghs 557.868 in 2020. The share of mining and quarrying in total direct domestic fiscal receipts was 18.1 per cent in 2020, which is not significantly different from the 18.3 per cent recorded,” posited the Chamber in the report.
In terms of exports, the mineral sector alone accounted for 48.4 percent of gross merchandise exports in 2020, comparing favourably with the 42.6 percent recorded in 2019 and far outstripped the combined contribution of crude oil and cocoa exports in 2020 by more than 12 percentage points.
“Proceeds from export of minerals increased from USD 6.678 billion in 2019 to USD 6.998 billion in 2020, representing a growth rate of 4.8 percent. Producing member companies of the Chamber returned USD 3.67 billion out of the mineral revenue of USD 5.14 billion to the country. This represents 71 percent of the revenue of producing member companies. The proportion of mineral revenue returned exclusively through commercial banks was more than the statutory threshold described in the various Development Agreements as well as the Minerals and Mining Act 2006 (Act 703). This further emphasizes the Chmaber’s commitment to supporting the growth of Ghana’s economy,” noted the Chamber.
Meanwhile, gold production volume by Ghana in the year 2020, according to Chamber was the lowest in the last sixteen (16) – since 2004.
The Chamber intimates that gold production dropped 12.1 percentage points to 4.02 million ounces in 2020 compared with the 4.57 million ounces in 2019.
But despite the fall in gold production, the country however, retained its position as Africa’s top gold producer.