Salt industry to generate US$1 billion annually by 2028 – IMANI

The domestic salt industry could generate over US$1billion in annual revenue by 2028 a policy brief by IMANI, titled ‘Prospects of Ghana’s Salt Industry: A Pathway to Adding an extra US$1billion in Foreign Exchange Earnings’, has shown.

The growth largely hinges on the Songor Salt project spearheaded by the McDan Group-backed Electrochem Limited, an indigenous company that has secured a lease to develop the Songor Lagoon area – historically known for its artisanal salt production.

The project also involves minor funding by the Minerals Income Investment Fund (MIIF), with plans underway to list on the Ghana Stock Exchange (GSE) as it seeks to expand infrastructure.

The ambitious project aims to increase domestic annual salt production from around 250,000 metric tonnes to 1.5 million metric tonnes within the next four years. This dramatic scale-up could transform Ghana from a minor player, currently ranked 59th globally in salt exports, to one of the top 25 salt-producing nations worldwide.

“We are sitting on a goldmine, only it is white. For years, we have barely scratched the surface of what’s possible here,” said Kwame Narteh, a local salt pan owner said.

Missing out

Indeed, Ghana’s current salt exports, a mere US$4.36million in 2022, reflect a startling underutilisation of the country’s potential. Electrochem aims to change this dramatically, projecting an increase in annual production from the current 150,000 metric tonnes to 1.5 million metric tonnes by 2028.

“Revenue projection for 2025 will be around US$350-400million according to projected production based on current infrastructure. After subsequent investment rounds and infrastructure development spanning four years, it is expected that the Songor area alone will yield up to 1.5 million metric tonnes annually – leading to potential revenues in the region of US$1billion from 2028 onward,” IMANI’s document explained.

From contributing just 0.022 percent of Ghana’s export earnings, salt could account for up to five percent by end of the decade. This would place Ghana among the top-25 salt producers globally, a list dominated by industrialised nations.

However, the path to this white gold rush is not without its challenges. The Songor Lagoon, a delicate ecosystem and protected Ramsar site, has been at the centre of community life for centuries. The prospect of industrial-scale production has sparked concerns among local artisanal miners.

“This lagoon is not just our livelihood; it is our heritage,” explains Mama Adiki, a third-generation salt-winner. “We fear being pushed out by big machines and fancy techniques,” she added.

Electrochem, aware of these sensitivities, has pledged to create over 5,000 direct jobs and support an additional 12,000 in related activities. The company’s plans include developing 1,500 acres of adjoining land for community-operated salt pans, fed by high-quality brine from Electrochem’s evaporation ponds.

Historical challenges

Currently, about 9,000 residents engage in small-scale, unregulated salt mining, with most workers – many of them women – earning the equivalent of less than US$500 annually. The industry, dominated by so-called ‘Atsiakpo miners’, has been criticised for perpetuating poverty and failing to contribute in local development.

The Songor project has faced challenges, including resistance from some community organisations invested in the status quo.

Electrochem’s plan includes introducing two harvesting seasons, improving brine quality and ensuring community ownership of salt pans. The company has already signed agreements with local leaders and promises to pay workers double the current rates.

“It is therefore regretful that several community-based organisations and individuals are invested in keeping this cycle intact – to the detriment of what could be achieved with more investment and better infrastructure development. With no investment, the industry remains dominated by small-scale, unregulated operators who exploit the resources without contributing to the community’s development,” IMANI said in its commentary.

“Communities are direct beneficiaries of investments and directly participate in the economic activity of salt harvesting, thus preserving their age-old culture and practices while enjoying the benefit of enhanced salt production,” it added.

Early signs of transformation

Early signs of this transformation are visible from space. Satellite imagery shows a dramatic increase in the lagoon’s water-covered area from just 8 square kilometres in 2019 to 72 square kilometres in 2024, following Electrochem’s initial infrastructure investments.

IMANI recommendations

The think-tank argues that government should take a more active role in managing Ghana’s salt resources, suggesting that potential benefits to the state far outweigh those of private operators. IMANI contends that increased government involvement could lead to significant improvements in infrastructure, healthcare, education and overall economic development for salt-producing regions.

Central to IMANI’s recommendations is the establishment of a robust regulatory framework. The think-tank proposes creating either an independent regulatory body for the salt industry or a dedicated salt desk within the Minerals Commission. This new entity would be tasked with developing and enforcing regulations for salt mining operations of all scales, from artisanal to industrial.

Additionally, IMANI suggests the creation of a Ghana Salt Producers Registry that would work in tandem with local authorities to establish guidelines for operators in each salt-producing area. The proposed regulatory framework would also involve collaboration with various state agencies, including the Ghana Standards Authority and Food and Drugs Authority, to ensure quality control and explore industrial applications of salt.

Recognising the importance of traditional leadership structures, the report recommends developing a framework for equitably distributing royalties to chiefs and clans. This process, IMANI suggests, should be led by the proposed regulatory body in conjunction with the Ministry of Lands and Natural Resources.

While acknowledging the need for a stable environment to ensure returns on Electrochem’s substantial investment, IMANI emphasised the company’s responsibility to prioritise local employment and expertise.

It also underscored the critical importance of community engagement and education. The think-tank argues that for the project to succeed, local communities must understand and embrace the potential benefits of industrial-scale salt production while retaining access to and ownership of community salt pans.

In the words of a local official who sought anonymity: “Our ancestors always said the lagoon would provide for us. Perhaps they saw further than we realised”.