sharing in governance of extractive industries
Hon. Prof. Gyan-Baffour, Minister for Planning of Ghana, officially launched a National Suppliers’ Programme (NSDP) aiming to build the capabilities of Ghanaian firms to secure a greater share of mineral sector procurement, and eventually to link with other productive sectors in the economy. In his remarks on behalf of Vice President Dr. Mahamudu Bawumia, the Minister said that the goal of this initiative is to use the mineral sector as a launch-pad for industrialization. As noted by Hon. John-Peter Amewu, Minister of Lands and Natural Resources, this initiative will complement the existing policy environment for industrialization.
The launch occurred during a workshop on value addition in Ghana’s mineral sector, which was held in Accra from 1-2 November and organised jointly by the African Minerals Development Centre (AMDC), the African Center for Economic Transformation (ACET) and the German Federal Institute for Geosciences and Natural Resources (BGR). It featured discussions by ministers and senior public and private sector representatives on how domestic manufacturers and suppliers of goods and services can take advantage of opportunities along the mining value chain to generate growth and create jobs.
Participants recognized that Ghana is the second largest gold producer in Africa after South Africa and 11th in the world. But according to AMDC coordinator Kojo Busia, “we see a lack of transformation very acutely in Ghana. While world-class mining supply and processing firms have emerged in South Africa, Chile and other mineral-producing countries, Ghana’s mining sector inputs are mostly procured abroad, and its minerals are processed abroad.”
The workshop began with a presentation of findings on upstream value chain, linkage and local procurement potential in Ghana and across West Africa, based on a study undertaken by AMDC, BGR and the Government of Ghana. According to this research, Ghana’s structural weaknesses impede its drive for economic diversification and industrialization. Local firms are largely unable to meet the supply needs of the mining industry in terms of quality, quantity and timeliness. Other issues include the strong presence of a class of business people who are essentially intermediaries between importers and the mining industry; a lack of political consensus on how to strengthen linkages between mining and industrialization; red tape and other difficulties in the business environment; and insufficient commitment from the mining industry itself to support local sourcing.
This study comes within the context of Ghana’s Country Mining Vision process, which onboards the tenets of the Africa Mining Vision adopted by African Heads of State in 2009, which seeks to foster “transparent, equitable and optimal exploitation of mineral resources to underpin broad-based sustainable growth and socio-economic development.” Dr. Julius Gatune of ACET presented findings and policy recommendations on local content in the mineral, oil and gas sectors in selected African countries.
Following the launch of the NSDP, discussions focused on taking action on this initiative, focusing on the policy environment and challenges to NSDP implementation, the institutional structure needed to help it succeed, the role of businesses and the private sector, and overcoming skills and capacity gaps.
Further discussions will be held on embedding the NSDP within Ghana’s institutional landscape for economic transformation, with mining firms as well as suppliers, manufacturers and service providers playing a central role in driving the process. The Country Mining Vision will eventually progress to future phases on downstream beneficiation as well as linkages with the petroleum and gas sector, with these initiatives building on the NSDP.
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