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Ghana launches programme to link mining sector and local businesses

file photo
file photo

Strengthening the mining sector’s contribution to local and national development is the theme of a meeting slated for November 1 and 2, 2017 in Accra. With annual mining procurement exceeding $1 billion, the meeting will see the launch of an innovative National Suppliers’ Development Programme (NSPD) that aims to secure a greater share of this market for Ghanaian firms.

The Ghana government endorses the NSPD because of its alignment with the government’s own priorities of private sector-led industrialization and economic transformation.

The meeting is organised jointly by the African Minerals Development Centre (AMDC), based in Addis Ababa, the Accra-based African Center for Economic Transformation (ACET) and the German Federal Institute for Geosciences and Natural Resources (BGR) in Hannover.

It will gather ministers and senior public and private sector representatives to discuss how domestic manufacturers and suppliers of goods and services can take advantage of the great opportunities along the mining value chain to generate growth and create jobs.

Ghana is the second largest gold producer in Africa after South Africa and 11th in the world. But according to AMDC coordinator Kojo Busia, “we see a lack of transformation very acutely in Ghana. While world-class mining supply and processing firms have emerged in South Africa, Chile and other mineral-producing countries, Ghana’s mining sector inputs are mostly procured abroad, and its minerals are processed abroad.”

Noting Ghana’s vulnerability to commodity price fluctuations, ACET director of policy advisory services Ed Brown says, “To build resilience to external shocks, the country has to transform its economic structure by shifting from the ‘revenue first’ approach to the mining sector to deepening local content and value addition.”

The Government of Ghana is working with the AMDC, BGR and ACET on a Country Mining Vision (CMV) that supports the industrialization agenda by linking the mining sector to domestic manufacturers and suppliers. It is a comprehensive strategy for structural transformation that reinforces coordination between economic sectors. The Country Mining Vision is guided by the African Mining Vision (AMV), adopted by African heads of state in 2009 to foster “transparent, equitable and optimal exploitation of mineral resources to underpin broad-based sustainable growth and socio-economic development.”

According to joint research by the AMDC, ACET and the BGR, Ghana’s structural weaknesses impede its drive for economic diversification and industrialization. Local firms are also largely unable to meet the supply needs of the mining industry in terms of quality, quantity and timeliness.

Other issues include the strong presence of a class of business people who are essentially intermediaries between importers and the mining industry; a lack of political consensus on how to strengthen linkages between mining and industrialization; red tape and other difficulties in the business environment; and insufficient commitment from the mining industry itself to support local sourcing.

In light of these findings, the meeting will look at opportunities for linkages between mining and the local economy, from upstream procurement to downstream value addition. Results from Phase I of the Country Mining Vision process will be presented, and there will be detailed discussion of domestic and external roles in supporting implementation of the NSPD.

The launch will be opened by Hon. John Peter Amewu, Minister of Lands and Natural Resources. In attendance will be Hon. Alan Kyerematen, Minister of Trade and Industry; Kwame Addo Kufour, President of Ghana Chamber of Mines and H.E. Christoph Retzlaff, German Ambassador to Ghana.

Credit: African Center for Economic Transformation (ACET)

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