Government backs hybrid model for Ghana’s extractive sector, rejects move to shut out foreign investors

The government is pursuing a hybrid financing and investment approach for Ghana’s extractive sector. This is part of broader reforms aimed at maximizing benefits from the country’s natural resources while safeguarding future generations.

According to Mineral Economist at the Minerals Commission, Wisdom Puplampu, government policy does not support completely removing foreign participation from the mining sector, stressing that such a move could send negative signals to investors and limit opportunities for growth.

Speaking to Joy Business on the sidelines of the Joy Business Roundtable Dialogue on rethinking Ghana’s approach to gold mining, oil and critical minerals, Mr. Puplampu explained that government is implementing reforms focused on strengthening revenue management and sealing loopholes that lead to leakages in the sector.

Mr. Puplampu noted that government is leveraging legal and regulatory frameworks to strengthen local participation in the extractive industry.

He pointed to local content regulations and plans to expand access to financing as critical elements of the strategy.

He further stressed the need for Ghanaian banks to see opportunities within the sector and provide financing support, explaining that the stock market alone may not be able to provide the required capital for large-scale operations.

According to him, the proposed hybrid approach would combine debt financing from banks, equity raised through the stock market, and potential pension fund investments to support mining activities.

He added that ongoing discussions involving the National Pension Regulatory Authority could pave the way for portions of pension funds to be directed into the equity market as patient capital for long-term investments.

“If we adopt the hybrid approach, we will be able to make significant impact,” he stated.

Despite the push for stronger local participation, Mr. Puplampu maintained that foreign investments remain essential to the growth of Ghana’s extractive industry.

He argued that while increasing local benefits is important, nationalizing mines or shutting out foreign investors does not automatically guarantee higher returns for the country.

“If we nationalize the mines, we are telling investors that we are closing our doors, and that is not government policy,” he cautioned.

The discussion formed part of broader conversations on how Ghana can rethink its approach to managing gold, oil and critical mineral resources while ensuring sustainable economic gains.

المصدر: MyJoyOnline (GH)