The Africa Center for Energy Policy (ACEP) has strongly welcomed the government’s proposal to amend the Mineral Income and Investment Fund (MIIF) Act in its 2025 Budget Statement.

The 2025 Budget proposed that 80% of mineral royalties, previously managed by MIIF, be transferred to the Consolidated Fund to support infrastructure projects.

Kodzo Yaotse, Policy Lead for Petroleum & Conventional Energy at ACEP raised concerns over MIIF’s “opaque investment strategy, suboptimal investments, and significant Environmental, Social, and Governance (ESG) risks.”

The MIIF Act was originally established to facilitate the controversial Agyapa Royalties deal under the previous administration, a deal that was ultimately abandoned due to widespread stakeholder opposition.

“Despite the failure to implement Agyapa, the government continued to channel about 80 percent of risk-free mineral royalties to MIIF for discretionary investment, funds that could have otherwise supported direct socio-economic investments through the national budget.”
Kodzo Yaotse, Policy Lead for Petroleum & Conventional Energy at ACEP

Kodzo Yaotse further pointed out that aside from the Fund’s disclosed US$20 million investment in Asante Gold Corporation, the details of its other investments remain shrouded in mystery.

“There is limited information on the GHS 2.5 billion of mineral royalties the Fund has received to date. This lack of transparency is concerning, particularly given the fiscal deficit faced by the economy.”

Kodzo Yaotse, Policy Lead for Petroleum and Conventional Energy at ACEP

Given this backdrop, the proposed amendment to the MIIF Act has been welcomed by some as a necessary step to rein in opaque financial practices and ensure that the revenues from Ghana’s mineral wealth are better utilized for the country’s development.

The proposal to amend the MIIF Act and re-channel funds to the Consolidated Fund has been widely welcomed by some stakeholders. However, the proposal has also brought to light some important considerations.

“A comprehensive value-for-money review of all existing MIIF investments, with accountability for Fund managers and prosecution for those found responsible for causing financial loss to the state.”
Kodzo Yaotse, Policy Lead for Petroleum & Conventional Energy at ACEP

Kodzo Yaotse also highlighted the need for the government to firmly commit to abolishing the MIIF Act and disbanding the Fund altogether.

“There is a clear need to introduce a Mineral Revenue Management Act, similar to the Petroleum Revenue Management Act (PRMA), to govern mineral revenue expenditure and provide transparency, rather than relying on spending from the Consolidated Fund.”
Kodzo Yaotse, Policy Lead for Petroleum & Conventional Energy at ACEP

A dedicated legislative framework for managing mineral revenues could improve transparency and ensure efficient allocation of resources to priority development areas.

Increase in GSL for Mining Companies

In addition to amendments to the MIIF Act, the 2025 Budget also proposed an increase in the Growth & Sustainability Levy (GSL) from 1% to 3% on the gross production of mining companies.

“The average royalty rate in the mining sector is 5 percent of gross production.
“With an increase in the GSL to 3 percent, the effective royalty rate for mining businesses would increase to about 8 percent.”
Kodzo Yaotse, Policy Lead for Petroleum & Conventional Energy at ACEP

The GSL, introduced in 2023, was designed to generate revenue for Ghana’s fiscal sustainability.

Unlike other businesses, where the levy is based on profit before tax, the extractive sector’s GSL is applied directly to gross production, making it an additional royalty imposed by the government.

Yaotse cautioned that the increase in GSL could trigger resistance from mining firms that have stability agreements with the government, as was the case with the earlier 1% GSL implementation.

“A high political risk could lead to divestment of assets from capable and compliant companies to the less capable ones.
“Rather than signaling arbitrariness, the government needs to learn lessons and introduce windfall taxes when existing mining contracts are up for renegotiation. Uncertainty and arbitrariness are bad for the extractive business.”
Kodzo Yaotse, Policy Lead for Petroleum & Conventional Energy at ACEP

He also stressed the importance of understanding both production costs and market pricing in the mining sector.

“It is important for the Ministry of Finance to note that the in-situ gold asset is as important as the investment that produces it. In other words, the gold is only useful when it comes out of the ground: bringing it out costs money.
“The Ministry of Finance must have equal understanding of how much it costs to produce the gold as it fixates on how much it is sold – the two variables are useful for really understanding the fiscal take.”
Kodzo Yaotse, Policy Lead for Petroleum & Conventional Energy at ACEP

As Ghana prepares to amend the MIIF Act and adjust mining sector taxation, the government must address concerns regarding transparency, investment security, and industry competitiveness.

While the reallocation of mineral royalties to the Consolidated Fund could enhance infrastructure development, ensuring accountability in mineral revenue management will be critical.

Additionally, while increasing the GSL may generate more revenue, it risks discouraging further investment in the mining industry.

Policymakers must carefully balance revenue generation with maintaining a stable and attractive investment climate for the extractive sector.

As parliamentary deliberations on the 2025 Budget continue, stakeholders in Ghana’s mining industry will be watching closely to assess the long-term impact of these proposed fiscal policies.