Government backs hybrid model for Ghana's extractive sector, rejects move to shut out foreign investors

The government is pursuing a hybrid financing and investment approach for Ghana's extractive sector. According to Wisdom Puplampu, Mineral Economist at the Minerals Commission, government policy does not support completely removing foreign participation from the mining sector, stressing that such a move could send negative signals to investors and limit opportunities for growth.

Mr. Puplampu explained that government is implementing reforms focused on strengthening revenue management and sealing loopholes that lead to leakages in the sector. He noted that government is leveraging legal and regulatory frameworks to strengthen local participation in the extractive industry, pointing to local content regulations and plans to expand access to financing as critical elements of the strategy. He stressed the need for Ghanaian banks to see opportunities within the sector and provide financing support, explaining that the stock market alone may not be able to provide the required capital for large-scale operations. The proposed hybrid approach would combine debt financing from banks, equity raised through the stock market, and potential pension fund investments to support mining activities. Ongoing discussions involving the National Pension Regulatory Authority could pave the way for portions of pension funds to be directed into the equity market as patient capital for long-term investments.

Mr. Puplampu maintained that foreign investments remain essential to the growth of Ghana's extractive industry. He argued that while increasing local benefits is important, nationalizing mines or shutting out foreign investors does not automatically guarantee higher returns for the country. He cautioned, "If we nationalize the mines, we are telling investors that we are closing our doors, and that is not government policy."