The Commission expressed worry over the eventful decline fearing that it would negatively affect government revenue and the economy since gold is Ghana’s highest gross foreign exchange earner.
Mr Benjamin Aryee, the Chief Executive Officer of the Minerals Commission, told participants at a brainstorming workshop that Ghana’s gold currently contributed 27 per cent of government’s revenue as captured by the Domestic Tax Division of the Ghana Revenue Authority.
He, however, stated that with the current fall in prices, government revenue would be affected, resulting in a halt in major government projects.
Mr Aryee said the situation called for urgent strategies that would provide solutions in the short, medium and long term to sustain the economy and revenue inflow.
He, therefore, called on government as an interim measure to prioritize projects and to diversify attention from gold as the major foreign exchange earner in the medium term and to generate employment through expanded industrialization and the service sector.
“The more you diversify from one commodity, the more prepared you get”, he said.
He explained that the Commission had had various consultations and briefings with government over the past months on the effect of this development on the overall performance of the mining sector to the country’s revenue generation efforts for national development.
Professor Bruce Banoeng-Yakubo, Chief Director of the Ministry of Lands and Natural Resources, said the workshop by the Minerals Commission for technical officers, would afford them the opportunity to assess the impact and develop strategies to manage the impact in the immediate, short and long term.
He admitted that the price of gold hit historic high until its eventful decline in 2013, explaining that the annual cumulative average gold price on the world market, which was $1,224.53 per ounce in 2010 rose to $1,571 in 2011 and subsequently to $1,669.98 per ounce in 2012.
“However, in 2013 the price of gold began to dip from the historical highs to its lowest in recent years of $1,192.00 per ounce in June 2013.
Currently gold is trading between $1,300 and $1,350 per ounce”, he said.
Prof Banoeng-Yakubo said the significant fall in the price of gold, Ghana’s flagship mineral, was a major concern to government as well as industry players.
In 2012 alone export revenues from the mineral sector amounted to over $5.6 billion, while total Foreign Direct Investment into the minerals and mining sectors from 1983 to 2012 amounted to over $12.5 billion.
He said these significant contributions had been possible because of Ghana’s conducive investment environment as well as the favourable precious metal prices in the past four years.
He said it was expected that the output from the workshop would inform government policy in the management of the country’s mineral resources.