Is the mineral development fund act, the panacea for development of mining areas in Ghana?
Abstract
Despite the potential of mineral wealth, many resource-rich countries persist in a “paradox of plenty” whereby despite the abundance of wealth, citizens live in “gross material poverty.” In Ghana, it would not be out of place to describe communities hosting mining companies as wallowing in poverty based upon the prevailing socio-economic conditions in these communities because of mining. The sorry state of the mining communities in Ghana has been the source of confrontation between them and the mining companies and sometimes the government. The treatment given to mineral wealth is that 80 percent of the revenue goes into the Consolidated Fund and 20 percent to the mining communities, which has failed to develop the areas. This paper seeks to ascertain whether the Mineral Development Fund Act introduced in Ghana in 2014 is the all-cure for developing mining communities in Ghana. The paper argues that the passage of the Mineral Development Fund Act (MDFA) may do very little to the development of the mining areas with the current state of the law. The paper recommends the amendment of the Minerals and Mining Law concerning the source of funding for the MDFA. Secondly, the article advocates the promulgation of a law like the Petroleum Revenue Management Act to separate mineral payments from the Consolidated Fund with specific provisions targeted at the development of the mining communities.