Chief Executive Officer of the Ghana Chamber of Mines, Ing. Kenneth Ashigbey, has warned that frequent changes in Ghana’s fiscal policies are increasing the cost of financing mining projects in the country.
Speaking on Channel One TV’s The Point of View on Monday, August 17, Ing. Ashigbey said the unpredictability of fiscal policies makes it difficult for mining companies and potential investors to accurately assess the costs and expected returns of their projects.
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According to him, investors can factor Ghana’s existing tax rates into their financial projections, but uncertainty over future policy changes makes it difficult to determine the figures they should use when raising funds.
The thing that unpredictability does is that it makes raising funds for projects in Ghana very expensive. It’s the reason why you need a stability agreement,” he said.
Ing. Ashigbey explained that mining projects require significant upfront capital before they begin generating revenue, making fiscal certainty particularly important to investors.
He cited a Newmont project that required more than $1 billion in investment before its first ounce of gold could be produced.
He said investors therefore need assurance that the fiscal environment will remain sufficiently predictable to enable them to secure funding and generate returns on their investments.
What they cannot handle is their unpredictability because they don’t know what numbers to use at a particular point. And you’re going to take this money, people’s money. So you need to be able to guarantee them a return for investment,” he said.
Ing. Ashigbey, however, acknowledged the need for government to protect its fiscal interests, particularly when commodity prices rise significantly.
He said the solution should be to establish clear conditions and investment milestones for companies seeking fiscal stability agreements, rather than relying on frequent policy changes or blanket long-term arrangements.
