The Institute of Economic Affairs (IEA) has rejected the government’s proposed sliding-scale mineral royalty framework, describing it as a continuation of a “colonial” system that shortchanges Ghana from the full value of its natural resources.
In a statement released today, the policy think tank criticized the draft Minerals and Mining (Royalty) Regulations 2025, which propose royalty rates ranging from 5% to 12% for minerals including gold and lithium, and a flat 5% for diamonds, bauxite, manganese, salt, limestone, and iron ore.
The IEA also expressed concern over reports that the Ministry of Lands and Natural Resources is considering a separate bill to impose a 9%–12% sliding-scale royalty across the sector, calling the Ministry’s position “confounding and contradictory” to President John Mahama’s publicly stated vision for resource sovereignty.
The release cited multiple speeches in which President Mahama has emphasized Ghana’s right to fully benefit from its resources. In March 2025, he supported a review of mining agreements, stating that “Ghana must earn more from its natural resource endowment.” At the UN General Assembly in September 2025, he stressed that “Africa must exercise sovereignty over its natural resources” and warned that granting extensive concessions to foreign firms must end.
At the World Economic Forum in Davos in January 2026, the President highlighted the imbalance in mineral value capture, saying: “We supply the world’s critical minerals but capture almost none of the value. This isn’t sovereignty. It is a trap.”
“The President has moved on, but the Minister of Lands and Natural Resources is still advancing the old colonial royalty model,” the IEA said, adding that “the President is ahead of his ministers.”
The think tank argued that both fixed and sliding-scale royalty systems are fundamentally flawed because they transfer control and ownership of resources to foreign companies, leaving Ghana with only a small fraction of the benefits. Instead, the IEA recommends full state ownership, with private firms—local or international—contracted solely under service agreements.
The institute noted that such a model has been successfully implemented in countries like Norway, Botswana, Chile, and several OPEC and West African nations. According to the IEA, full national ownership and competent management of resources would deliver far greater financial, economic, and security benefits than any royalty scheme.
With several mining leases set to expire in the coming years, the IEA sees a historic opportunity for Ghana to break from past practices without violating existing agreements. “We urge the government not to renew expiring leases, but instead pursue a new trajectory based on state ownership and service contracts,” the statement said.
The IEA also dismissed claims that Ghana lacks the technical expertise or capital to manage its resources independently, pointing to the country’s pool of skilled mining professionals and locally-owned firms already active in the sector. “What has been lacking is the political will to act decisively,” it concluded.
The press release ended with a firm rejection of the Ministry’s proposed royalty reforms and a strong endorsement of President Mahama’s sovereignty-driven approach. “Ghana must abandon the colonial practice of handing over ownership rights to foreign companies,” the IEA said, calling for a modern framework that guarantees full national ownership for the benefit of the country.