US$2.3 billion lost annually to illegal mining and gold smuggling - UK government

The economy loses an estimated US$2.3billion annually – a figure just US$700million short of the funds secured through the country’s three-year International Monetary Fund (IMF) bailout programme – to illegal mining and gold smuggling.

Additionally, more than 2.5 million hectares of forest cover have been lost over the last decade due to galamsey (illegal mining), according to the Forestry Commission. This is equivalent to losing approximately 12 percent of the country’s total forested area.

The ecological destruction has displaced thousands of farmers, leading to a 20 percent decline in cocoa production in regions like Ahafo and Bono per data from the Ghana Cocoa Board (COCOBOD), which contributes 15 percent of Ghana’s GDP

Similarly, there has been an increase in small arms of 2.5 million – with 1.1 million of them having been acquired illegally. Consequently, crime in mining-affected areas has shot up by 25 percent.

Equally disturbing is the unacceptable levels of mercury, cyanide and arsenic in fresh vegetables and fruit due to illegal mining activities, posing serious health and environmental concerns.

The UK-Ghana Gold Programme (UKGGP), which aims to highlight the connection between artisanal small-scale gold mining and crime, argues that addressing these losses could significantly enhance the cedi’s stability.

“We want to disrupt illegal mining and illicit financial inflows. Ghana loses more than US$2billion yearly to gold smuggling,” said Chris Aston, Team Lead at UKGGP.

Mr. Aston said this at a post-manifesto dialogue with major political parties at Peduase, Eastern Region, adding that in 2022, 16 tonnes of gold was smuggled from Ghana – more than any other country except Mali.

More worryingly, he said, these illicit inflows from gold smuggling could be funding criminal groups and terrorism in Ghana and the sub-region.

The illegal mining activity is largely driven by the influx of unregulated foreign capital, with investors collaborating with locals – particularly politically-connected individuals and other ‘big men’. This has made the fight against illegal mining increasingly difficult and nearly a lost cause.

It is the reason that event organisers Civil Society Organisations Alliance and UKGGP are engaging political parties on how to curb the canker. The dialogue follows an earlier meeting with the New Patriotic Party (NPP), National Democratic Congress (NDC) and other political parties, where a series of recommendations were made.

“Illegal gold mining has environmental consequences and criminal aspects. These are illegal activities harming the environment and aimed at benefitting certain individuals, groups or companies through the exploitation and theft of, or trade in, natural resources.

“Such operations frequently use arsenic, cyanide and mercury – a potent neurotoxin which results in severe and long-lasting soil, air and water pollution. 60 percent of Ghana’s water-bodies are now contaminated.

“Mercury poisoning impacts public health through being released into the atmosphere, and has now entered the food chain,” lamented Professor Kwesi Aning, a senior conflict and security specialist at the Kofi Anan Peacekeeping Training Centre in Accra.

Furthermore, Ghana’s rainforest and forest reserves are being destroyed. The majority of this deforestation has taken place within the last ten years – and the pace of destruction is quickening, he said.

For instance, he said reserves with some of the most biodiverse areas of the world are being destroyed with impunity. Forest reserves such as Atewa in the Eastern Region and parts of Sefwi in the Western Region have been ravaged by mining activities.

“These are biodiversity hotspots, harbouring hundreds of species found nowhere else on Earth,” he added.

“The situation is very dire, and I think that US$2.3billion is a very conservative estimate; we need to take very urgent steps to close the gap,” says Dr. Steve Manteaw, a natural research governance specialist who chairs the Ghana Extractive Industries Transparency Initiative (GHEITI) National Steering Committee.

“I do not understand why Kotoka International Airport should be the only designated exit point for gold. Why can’t we have the required equipment installed at the various borders to facilitate gold export?” he queried, alluding to the fact that a centralised approach might be fuelling smuggling of the precious yellow metal and denying the state much-needed revenue.

Political parties

The event featured presentations from political parties – NPP, NDC, Movement for Change and New Force – on how they plan to curb the illegal mining menace.

Gomashie Wisdom, representing the ruling NPP, stated that if their candidate Dr. Mahamudu Bawumi is elected in the upcoming December elections, the party plans to decentralise the licencing of small-scale miners, establish a minerals development bank and provide social security for industry players, among other initiatives.

The NDC also plans to decentralise licencing and reclassify mining activities into large, mediu and small-scale operators, with each category having distinct requirements. The main opposition party further advocates for a strict ban on mining in or near water-bodies and forest reserves.

These measures will be implemented if its candidate, former President John Mahama, is elected in the upcoming elections says Dr. Tony Aubynn, who represented the NDC.