The Ghana Chamber of Mines welcomes ongoing efforts by stakeholders to interrogate the
drivers of exchange rate volatility and to propose durable solutions to strengthen
macroeconomic stability. In this regard, the Chamber commends the CEO of Dalex Finance,
Mr. Joe Jackson, for stimulating public discourse through his presentation titled “Ananse
Stories about the Economy of Ghana.”
Excerpts of the presentation have since been published widely in the media. While the
presentation raises important questions regarding the relationship between export earnings
and exchange rate dynamics, particularly within the mining sector, certain methodological
issues require clarification to ensure that conclusions drawn are firmly grounded in a
consistent and comprehensive analytical framework.
- Scope Mismatch in the Estimation of “Retention” A central element of the presentation is
the estimation of a “retention ratio” of 46.2%, derived by the ratio of in-country
expenditure of US$5.5 billion to mineral export earnings of US$11.9 billion. The US$5.5
billion represents a broad measure of domestic economic activity generated by large-scale
mining firms that are members of the Chamber of Mines, including local procurement,
wages, taxes, and other payments.
As such, it provides a reasonable proxy for domestic value associated with that segment of
the industry. It must be noted that not all mining companies are members of the Ghana
Chamber of Mines. However, the methodological concern arises from the inconsistent
scope of comparison. The export value reflects output from all mining companies in Ghana
(both large smallscale mines), whereas the in-country expenditure captures only the large-
scale mines that are members of the Chamber of Mines. This results in a comparison
between a total (sector-wide exports) and a partial measure (Chamber’s producing
members’ domestic expenditure). This mismatch leads to a systematic understatement of
the domestic economic contribution of the mining sector and renders the resulting
“retention ratio” unrepresentative of the mining sector as a whole. - Omission of the Small-Scale Mining Sector The exclusion of the small-scale mining sector
from the estimation of “retention ratio” is particularly significant. Available industry data
indicate that small-scale mining accounted for approximately 40% of Ghana’s gold exports in
2024, representing a substantial share of total mineral export value. The omission of this
segment from the estimation of incountry economic activity, while simultaneously including
its output in total exports, materially distorts the assessment of value retained within the
sector. Any measure of retention that seeks to reflect sector-wide outcomes must therefore
incorporate both large-scale and small-scale mining activity on a consistent basis. - Illustration Under a Simplifying Assumption For purposes of illustration, one may adopt a
simplifying assumption that in-country expenditure approximates domestic value retained.
Even under this assumption, the estimated “retention ratio” of 46.2% is materially
understated due to the scope inconsistency identified above. Extending this simplifying
framework, one may further assume, purely for illustrative purposes, that proceeds from
the small-scale mining sector are retained within the domestic economy. Given that the
subsector accounts for approximately 40% of total gold exports, incorporating this segment
would materially increase the estimated retention ratio. This demonstrates that the
conclusion that less than half of mineral export value is retained in-country is not supported,
even within the internal logic of the methodology employed. It should be noted, however,
that this assumption is used solely for illustrative purposes, as gross export proceeds do not
fully translate into domestic value retained.
- Limitations of the Approach While the above illustration is useful, it is important to note
that the underlying approach has inherent limitations. Both export values and expenditure
figures are aggregate measures that may include elements which do not fully accrue to the
domestic economy. For instance, the in-country spending of $5.5 billion may include
expenditure on items produced in-country with imported raw materials or other inputs. As such, relying on a direct comparison of these aggregates, without a consistent treatment of their underlying components, can lead to distorted estimates of the mining sector’s domestic contribution. It is in that regard that domestic value added is the gold standard for
measuring the value retention. Such an approach would provide a more accurate
representation of the mining sector’s contribution to domestic economic activity and avoid
the distortions inherent in comparing gross export values with expenditure-based proxies.
Implications for Policy Interpretation Given these considerations, the conclusion that the
mining sector retains less than half of its export value, and that this is a primary driver of
exchange rate weakness, should be treated with caution.
The metric (retention ratio) used to support this conclusion: • understates domestic
economic activity due to scope inconsistencies, and does not adequately capture domestic
value added As a result, policy prescriptions based on this interpretation may not effectively
address the underlying drivers of exchange rate volatility.
Conclusion The Chamber reiterates its commitment to constructive, evidence-based dialogue on Ghana’s economic challenges. Ensuring analytical consistency is essential for informing sound policy conclusions.
A more comprehensive and internally consistent assessment of the mining sector will better
support the development of targeted interventions to strengthen both the Cedi’s stability and long-term economic resilience.
Issued by: The Ghana Chamber of Mines
