Chamber of Mines Urges BoG to Reveal Full Mining Forex Inflows

Ghana’s Chamber of Mines has called on the Bank of Ghana (BoG) to publish a full and detailed account of foreign exchange inflows from the mining sector. The Chamber stated that partial data risks misrepresenting the industry’s contribution to the economy. This request comes after claims attributed to the Gold Board suggested large-scale miners repatriate no more than 20% of export proceeds.

The Chamber argues this 20% figure only covers foreign exchange sold directly to the central bank. It excludes significant inflows routed through commercial banks within Ghana. A complete accounting across both direct and commercial channels is necessary for informed policymaking. This transparency will also aid sound macroeconomic management and sustain investor confidence in the sector.

This dispute highlights a critical data gap in understanding Ghana's foreign exchange landscape. Accurate data is crucial for the Bank of Ghana to manage the cedi’s stability, especially given ongoing pressures on Ghana’s currency. The mining sector is a major source of foreign exchange for Ghana. Ensuring its true contribution is captured affects national fiscal planning and international financial perceptions. Prior BoG data on forex inflows have been instrumental in assessing the economy's health.

“The Chamber stresses the need to distinguish between gross forex repatriation, total inflows into the country and net retention after external obligations are met,” the Chamber stated. It insists that gross repatriation, aligning with balance-of-payments principles, provides the correct measure of the sector’s contribution. Excluding commercial bank flows significantly understates actual inflows into the country.

The BoG now faces pressure to release comprehensive data. Such a release would clarify the true extent of foreign exchange generated by the mining sector. This transparency will enable more accurate economic assessments and foster greater public trust. It will also guide future policies related to mineral revenues and foreign exchange management, impacting the stability of the Ghana cedi.

Mining companies use commercial banks to meet various domestic obligations. These obligations include royalty payments to the government and payments for utilities like electricity and fuel. A portion of the foreign exchange repatriated through commercial banks is converted into cedis. This conversion covers local costs, wages, supplier payments, and community investment projects. These conversions directly increase domestic foreign exchange availability. They also support exchange rate stability by adding to the supply of foreign currency in the market. The Chamber reports that approximately 70% of export proceeds from its producing members return to Ghana. This occurs through a combination of central bank and commercial banking channels. The central bank itself previously required mining companies to offer it a right of first refusal on foreign exchange. This foreign exchange was intended for sale to commercial banks, confirming the recognised role of this channel. The data needed to present a full picture should therefore be available to the Bank of Ghana, according to the Chamber.