Ghana Legal

Indian Journal of Law and Legal Research Volume V Issue III | ISSN: 2582-8878
AN OVERVIEW OF GHANA’S HISTORY OF

MISMANAGEMENT OF MINERAL RESOURCES
Kwame Gyan, Senior Lecturer, University of Ghana School of Law, Ghana

Justin Awanzirigo Akampule, B.L Candidate, Ghana School of Law, Ghana
ABSTRACT
Minerals, in whatever form, remain arguably nature’s most valuable gift to

mankind. The best part is that nearly all peoples, be they politically, socially,
economically or even religiously organized, are blessed with one type of
mineral or another. Ghana is not left out. Minerals provide the wheels on
which economies around the world run. The country has a huge share in
nature’s distribution of these mineral resources. Yet, the verisimilitude of the
country’s true economic situation betrays this show of nature’s magnanimity
towards her. The reasons for this are manifold. The paper explores the
different dimensions of this situation and argues fervidly that the mineral
resources of Ghana are terribly mismanaged. The paper draws from my
findings in an earlier publication and argues that the phenomenon of
mismanagement of mineral resources over the years is a product of Ghana’s
legal regime that allows for the State to superintend over mineral resources.
It is, therefore, my argument that a timely review of this legal regime will
help quicken the country’s transformative agenda by allowing individuals,
institutions, stools or groups to own and manage mineral resources found in
their lands.
Page: 1
1. INTRODUCTION
I have argued elsewhere that the law on ownership and management of land and mineral
resources in Ghana has undergone three major movements since the start of British colonial
rule.1 The first movement commenced with the introduction of the Crown Lands Bill in 1897
by the Crown and ended with the collapse of the colonial project in 1957.2 The second
movement started and ended together with its architect, Kwame Nkrumah.3 The third and
current movement, which I call a hybrid system, kicked off properly with the coming into force
of the 1992 Constitution and is carried over to the Land Act of 2020.4 All through these
movements, the State has remained stubborn against letting go of or even sharing the right of
ownership and management of mineral resources. The result of this state capture of the mineral
resources over the years in is anything but mismanagement and underdevelopment.
2. GHANA’S SHARE OF MINERAL RESOURCES
Ghana is endowed with large mineral reserves and has a thriving mining sector with a more
than 200-year history.5 Gold, bauxite, diamond, manganese, silver and granite are a few of the
important minerals mined in the nation.6 Major quantities of limestone, iron ore, quartz and
lithium are also present in the country. More than 90% of mineral profits are generated from
the greatest commercially mined material—gold.7 The nation consistently ranks among the top
10 gold producers in the world and recently surpassed South Africa as the continent’s leading
producer of gold.8 Currently, it is estimated that mining is ongoing in 14 out of Ghana’s 16
1
Kwame Gyan, The Three Movements in The Management of Land and Natural Resources in Ghana: From the
Crown Lands Bill of 1897 to the Land Act of 2020 2 (May. 20, 2023) (unpublished manuscript, on file with the
Author).
2
Author).
3
Author).
4
Kwame Gyan , The Three Movements in The Management of Land and Natural Resources in Ghana: From the
Author).
5
Minerals Commission Ghana, Minerals and Mining Policy of Ghana (May. 1, 2023, 11:05 AM),
https://www.mincom.gov.gh/wp-content/uploads/2021/06/Mineral-and-Mining-Policy-Ghana.pdf.
6
7
8
Page: 2
administrative regions.
3. GHANA’S MINERAL RESOURCES MANAGEMENT REGIME
The 1992 Constitution makes provisions for the management of mineral resources,
underscoring their importance to national development. The purpose is to provide a safeguard
for the protection of the collective interest of the Ghanaian people. Article 257(6) of the 1992
Constitution states that: “Every mineral in its natural state in, under or upon any land in
Ghana, rivers, streams, water courses throughout Ghana, the exclusive economic zone and any
area covered by the territorial sea or continental shelf is the property of the Republic of Ghana
and shall be vested in the President on behalf of, and in trust for the people of Ghana.”
Minerals, as used in this context, refers to “all extractive natural resources”9 including crude
oil.10 Indeed, I am aware of the debate on what really constitute mineral resources and what do
not, including what distinction lies therein between mineral resources and natural resources.
However, I will resist the temptation to engage it here as it does not advance the core of this
paper. For the purpose of this work, a reference to mineral resources is a reference to natural
resources.
Article 268(1) also states that “Any transaction, contract or undertaking involving the grant of
a right or concession by or on behalf of any person including the Government of Ghana, to any
other person or body of persons howsoever described, for the exploitation of any mineral,
water or other natural resource of Ghana made or entered into after the coming into force of
this Constitution shall be subject to ratification by Parliament.” This provision operates to cast
an iron-clad constitutional check against sloppy and oftentimes self-serving concessionary
agreements or undertakings that are entered into in the name of and on behalf of the people of
Ghana by the powers that be.
The Constitution also established the Lands Commission, with the task to manage lands or
minerals that are vested in the President. To restrict the interference of the Executive with its
work, the Constitution debars a Minister or Deputy Minister, while in office, from becoming
chairperson of the Commission.11 In furtherance of this empowerment, the Constitution
9
Institute of Economic Affairs Ghana, Natural Resource Management in Ghana: A Case for Constitutional (May.
3, 2023, 09:15 AM), https://www.africabib.org/htp.php?RID=406338639.
10
Attafuah K.A, Managing the Political and Social Expectations from Ghana's Oil and Gas Resources 4 GPJ, 110,
113 (2010).
11
Constitution of Ghana, 1992, article 189(1)(a).
Page: 3
requires that in discharging its mandate the Commission is not under anyone’s thumb, save for
allowable restrictions put in place by the Constitution itself.12
The Lands Commission, however, was seen by many as too omnibus a body and lacked the
necessary expertise to manage the different natural resource units that required specialized
attention. This made it necessary for the draftsmen and women of the Constitution to shift the
burden on Parliament to establish “natural resource commissions within 6 months after the
coming into force of the Constitution for the regulation and management of the utilization of
the natural resources concerned, and the co-ordination of the policies in relation thereto.”13
Indeed, Parliament has since honored this call with the creation of the Minerals Commission
and all the other commissions mentioned in Article 269(1), together with their respective
regulative legislation. Thus, the proper cradle of regulatory bodies of the natural resource sector
is Article 269.
In the same spirit as the midwives of the 1992 Constitution, the drafters of Ghana’s most recent
Land Act, 2020 (Act 1036) retained the existing resource ownership framework of vesting all
minerals in the State in line with the Constitution, in spite of the many obvious cracks the
system is shown to have. Of course, the Constitution is the supreme law of Ghana and all other
laws must by virtue of their subsidiarity submit to the highest law.14 We see the Supreme Court
on many occasions speaks to this superiority of the Constitution and the need for all other laws
to submit to it. First, in Tuffour v A-G, the court identified article 1(2) as the foremost principle
that is enshrined in the Constitution and noted that “[it] is the constitutional criterion by which
all acts can be tested and their validity or otherwise established.”15
Later in New Patriotic Party v Attorney-General,16 the Supreme Court held that articles 1(2),
3(1) and 3(2) of the 1969, 1979 and 1992 Constitutions respectively are the same to the extent
that they uphold the Constitution as the supreme law of Ghana. Consequently, “All laws and
acts or omissions which are inconsistent with or in contravention of any provision of the
Constitution are void and [the] court is empowered by the Constitution to make declarations
12
Constitution of Ghana, 1992, article 265.
13
Constitution of Ghana, 1992, article 269(1).
14
15
Tuffour v. Attorney-General [1980] DLSC 1122, 12.
16
New Patriotic Party v. Attorney-General [1993-94] 2 GLR 35.
Page: 4
to that effect.”17
And in Acquah JSC’s view,
[A]rticle 1(2) of the Constitution, 1992 is the bulwark which not only fortifies the
supremacy of the Constitution, but also makes it impossible for any law or provision
inconsistent with the Constitution, 1992 to be given effect to. And once the Constitution,
1992 does not contain a schedule of laws repealed by virtue of article 1(2), whenever
the constitutionality of any law vis-a-vis a provision of the Constitution, 1992 is
challenged, the duty of this court is to examine the relevant law and the Constitution,
1992 as a whole to determine the authenticity of the challenge. And in this regard, the
fact that the alleged law had not specifically been repealed is totally immaterial, and
affords no validity to that law. For article 1(2) of the Constitution, 1992 contains an in-
built repealing mechanism which automatically comes into play whenever it is found
that a law is inconsistent with the Constitution, 1992.18
In light of the above test, very little could have been done differently by the drafters of Act
1036 without risking conflict with the Constitution. If the draftsmen and women desired a path
different from the old, which has proven dysfunctional thus far, such a path could only be
chartered in line with the supreme law. This is only possible through constitutional amendment
to make way for private ownership of natural resources in line with modern and progressive
views.
Notice ought to be taken, however, that the Constitution enjoins the State to “recognize that
ownership and possession of land carry a social obligation to serve the larger community”.19
In particular, the State is obliged to acknowledge that the managers of public, stool, skin and
family lands are fiduciaries charged with the obligation to discharge their functions for the
benefit of the respective people of the stool, skin or family concerned, and are accountable as
fiduciaries in this regard.20 The Act rehashed this constitutional call as follows: “A chief,
tendana, clan head, family head or any other authority in charge of the management of stool
or skin, or clan or family land, is a fiduciary charged with the obligation to discharge the
17
New Patriotic Party v. Attorney-General [1993-94] 2 GLR 35, 154.
18
Mensima and Others v Attorney General and Others [1997-98] 1 GLR 159 – 218. Page 42.
19
1992 Constitution, article 36(8).
20
1992 Constitution, article 36(8).
Page: 5
management function for the benefit of the stool or skin, or clan or family concerned and is
accountable as a fiduciary.”21
4. FORMS OF MISMANAGEMENT
In this part of the paper, I focus on the different forms through which the phenomenon of
mismanagement of Ghana’s mineral resources manifest.
4.1 Bad Contracting
The President holds all mineral resources in Ghana “on behalf of, and in trust for the people of
Ghana.”22 By virtue of this trusteeship, the President is placed in a fiduciary relationship with
the people of Ghana. Millett LJ in Bristol & West Building Society v Mothew23 defines a
fiduciary as “someone who has undertaken to act for or on behalf of another in a particular
matter in circumstances which give rise to a relationship of trust and confidence.”24 The core
obligation of a fiduciary, his lordship noted, is the obligation of loyalty which comes in many
facets. “A fiduciary must act in good faith; he must not make a profit out of his trust; he must
not place himself in a position where his duty and his interest may conflict; he may not act for
his own benefit or the benefit of a third person without the informed consent of his principal.”25
Though Miller LJ’s definition is not intended to exhaust the core duties of a fiduciary, “it is
sufficient to indicate the nature of fiduciary obligations.”26
As a constitutional trustee, with beneficiaries running into tens of millions, perhaps the
President’s fiduciary duties even extend beyond the common law notions. Every contract
involving the exploitation of the people’s minerals must be done with the utmost good of the
32 million beneficiaries in mind. Yet, it is no secret that that is hardly ever the case. It cannot
be the utmost good of the people that contracts are signed in their name with gigantic foreign
companies which only give the people a paltry 10% for gold,27 a measly 20% for bauxite;28 or
a negligible 17.44% for crude from Ghana’s two oil fields, Enyenra Entomme (TEN) and
21
Land Act, 2020 (Act 1036), section 13(2).
22
23
Bristol and West Building Society v. Mothey [1998] Ch 1.
24
Bristol and West Building Society v. Mothey [1998] Ch 1, 18B-C.
25
Bristol and West Building Society v. Mothey [1998] Ch 1 ,18B-C.
26
Bristol and West Building Society v. Mothey [1998] Ch 1, 18B-C.
27
Institute of Developing Economies, Gold Fields Limited – AGE (African Growing Enterprises (May. 6, 2023,
1:05 PM), https://www.ide.go.jp/English/Data/Africa_file/Company/ghana01.html.
28
Ghana Investment Promotion Centre, Ghana’s Mining Sector Report (May. 7, 2023, 3:25 PM)
https://gipc.gov.gh/wp-content/uploads/2022/12/Ghanas-Mining-Sector-Report.pdf.
Page: 6
Sankofa Gye-Nyame, from 2016 and 2017 respectively to 2020.29It cannot be the utmost good
of the mothers and children in Obuasi, Axim, Prestia, Tarkwa and Tongo that in their daily
lives they see how much of these minerals are pulled out from beneath their lands, dusted clean
and whisked away while they remain impoverished. What it is, is sheer greed that results in
contracts oftentimes deliberately skewed to short-change the poor lot and enrich those given
the power to contract on behalf of the people. Indeed, what it is, is a breach of the fiduciary
duty imposed on the President as a trustee required to hold the mineral resources for the benefit
of the Ghanaian people.
4.2 Poor Monitoring Schemes
Even where state actors have contracted well, our monitoring culture is sure to betray us still.
There are reports of large volumes of mineral resources that exit the shores of Ghana
unaccounted for daily. The most recent one is the documentary by Al Jazeera network that
made some startling and worrying revelations of gold to the tune of 40 million dollars smuggled
out of Ghana monthly through unapproved means without being detected by our monitoring
bodies.30 Teschner bemoans the increased difficulty in regulating the informal artisanal and
small-scale mining sector over time, largely due to corruption in law enforcement and political
leniency.31 This enforcement problem, Mcquilken and Hilson observe, is further “deepened by
the limited financial, personnel and logistical capacity of state regulators.”32
4.3 Tricks by Large Companies
Reports also abound about large extractive companies operating in the country that employ
different tricks aimed at short-changing the country. The modus operandi of these companies
includes tax avoidance and tax evasion to avoid paying the right amount of taxes owed the
State. By using tax havens, businesses can avoid paying taxes. In its 2016 publication,
waronwar, an organization committed to fighting against the root causes of poverty and human
rights violation, as part of the worldwide movement for global justice disclosed shockingly that
29
Acheampong T. & Stephens T.K, Petroleum Resource Management in Africa: Lessons from Ten Years of Oil
and Gas Production in Ghana (2022).
30
Citi Newsroom, Gold Mafia Smuggles $40m of Ghana’s Gold Monthly (May. 7, 2023, 4:15 PM)
https://citinewsroom.com/2023/03/gold-mafia-smuggles-40m-of-ghanas-gold-monthly-al-jazeera-report/. See
also Gold Mafia – Episode One- Al Jazeera Report https://www.youtube.com/watch?v=evWEuVR1XIs.
31
Benjamin T.A, Small-scale mining in Ghana: The government and the galamsey, 37(3), Resources Policy,
Elsevier, 308 (2012).
32
Mcquilken J. & Hilson G, Artisanal and Mining in Ghana Evidence to Inform an Action Dialogue, (2016).
Page: 7
25 of the 101 firms registered on the London Stock Exchange were really founded in tax
havens, primarily the British Virgin Islands.33 According to estimates, Africa loses about $35
billion annually to illicit money outflows and another $46 billion annually to profits gained
from operations in Africa by international corporations.34
UK firms play a dominant role in Africa, which is comparable to a new form of colonialism.
Four policies are identified by the publication as noteworthy. First, Whitehall has long been a
staunch supporter of trade and investment regimes that give foreign businesses access to local
markets in Ghana and Africa as a whole.35 It is primarily opposed to African nations putting
up protective or regulatory hurdles to such investments, the kinds of measures that are
frequently adopted by prosperous economies in East Asia.36 Second, Britain has led the globe
in promoting low business taxation in Africa, particularly in the extractives industry.37 Third,
British policy has done nothing to oppose multinational corporations adopting tax havens; in
fact, Britain is substantially responsible for the worldwide architecture of tax havens.38 Fourth,
British governments have consistently backed only voluntary measures for businesses to track
their effects on human rights; they reject the strengthening of existing, legally obligatory
international procedures to stop abuses.39 These reports speak to a deficiency in our monitoring
scheme. Thus, the big companies exploit these deficiencies to cheat the State and the ultimate
losers are undoubtedly the Ghanaian people.
4.4 Corruption
In Ghana, corruption remains stubbornly visible throughout the entire natural resources
33
Curtis M, The New Colonialism: Britain’s scramble for Africa’s energy and mineral resources (May. 6, 2023,
2:05 PM) https://www.waronwant.org/sites/default/files/TheNewColonialism.pdf.
34
35
36
37
38
39
Page: 8
sector.40 The 2018 GAN Integrity Report41 found that financial misuse and embezzlement in
the management of community-based natural resources in Ghana, especially as it relates to
funds meant for the development of mining communities, are caused by local elite capture
coupled with little to no openness and accountability. Dupuy revealed that although “such funds
are usually established with good intentions”,42 local power dynamics frequently impair their
capacity to improve incomes, social services and infrastructure of mining communities.43
Researchers have also determined that one of the primary causes of this attitude is large-scale
mining bias, which results in the inability of majority of resource-rich African governments to
make the most of mineral rents received. The informality in the subsector has been exacerbated
by actions and tactics like dividing up large tracts of land rich in minerals for big miners at the
expense of artisanal small-scale miners, obstacles “to formal licensing, and a lack of technical,
logistical, financial, and market support services.”44 In addition, Hentschel et al. and
Hausermann et al. attribute the neglect of the small-scale subsector by stakeholders to vested
interests related to the potential for corruption.45 According to Van Bockstael, the outcomes of
such extralegal agreements are considered a means of surviving administrative chaos and the
breakdown of public services.46
In Ghana, traditional authorities manage an estimated 45% of funds that are accrued from
mining and distributed to the populace47 presumably to be used for development of the mining
neighborhoods. Reports in Ghana, however, reveal that this is not always the case as chiefs
40
GAN Integrity, Ghana Corruption Report, (May. 6, 2023, 2:05 PM) http://www.business-anti-
corruption.com/country-profi les/Ghana.
41
42
Kendra D, Corruption and Elite Capture of Mining Community Development Funds in Ghana and Sierra Leone,
in Le Billon, Philippe; & Aled Williams, eds, Corruption, Natural Resources, and Development: from Resource
Curse to Political Ecology. Cheltenham and Northampton (MA): Edward Elgar Publishing, 69–79, (2017).
43
Kendra D, Corruption and Elite Capture of Mining Community Development Funds in Ghana and Sierra Leone,
in Le Billon, Philippe; & Aled Williams, eds, Corruption, Natural Resources, and Development: from Resource
Curse to Political Ecology. Cheltenham and Northampton (MA): Edward Elgar Publishing, 69–79, (2017).
44
Adu-Baffour F., Daum T. & Birner R, Governance challenges of small-scale gold mining in Ghana: Insights
from a process net-map study, (May. 7, 2023, 04:05 PM) https://doi.org/10.1016/j.landusepol.2020.105271.
45
Hentschel T., Priester M. & Hruschka F. (2002) Global report on artisanal & small-scale mining Min. Miner.
Sustain. Dev., 70, p. 67; Hausermann H. et al (2018) Land-Grabbing, Land-Use Transformation and Social
Differentiation: Deconstructing ‘Small-Scale’ in Ghana’s Recent Gold Rush World Dev., 108 (2018), pp. 103-
114.
46
Bockstael S.V. The persistence of informality: perspectives on the future of artisanal mining in Liberia
Futures, 62, (2014) pp. 10-20.
47
Page: 9
frequently exhibit little interest in spending money gained from natural resources for the growth
of their communities.48
The district assemblies also have a bad reputation in Ghana because they are unable to handle
funds responsibly, are unaccountable and often do not represent constituents’ demands and
interests. The development of mining and other resource-rich communities, therefore, cannot
be expected to advance rapidly as a result of any increase in mining earnings for these
assemblies.
5. THE IMPLICATION OF THE MISMANAGEMENT
The mismanagement of Ghana’s mineral resources is akin to rape being perpetuated against
the Ghanaian people. The unfortunate consequence is that very little revenue is accrued to the
State for the benefit of the real owners of these resources. One would have thought that at least
the immediate communities where these resources are mined would receive some special
attention from the State that is entrusted to hold these minerals. This is not the case. Popular
mining communities such as Obuasi, Tarkwa, Prestia among several others have become the
poster image of this unfortunate development. For instance, in a 2018 study on the state of
human rights in mining communities, involving interviews and focus groups in most mining
communities, it was disclosed that: “…communities impacted by mining activities do not
directly benefit from mining royalties. In most cases most communities did not even know of
the existence of the facility. In communities where people expressed knowledge of the facility,
they said the chief was the main beneficiary of these funds.”49 Part of the problem, the study
revealed “stems from the failure of the [Ghanaian] Constitution to clarify, explicitly, the role
of chiefs in local political processes, something that continues to be a sensitive issue in
contemporary Ghanaian society.”50
6. THE WAY FORWARD
As far as I can see, there are two possible ways to deal with this situation. One way is to
48
49
CHRAJ, Impacts of Mining on Human Rights Experiences from Ghana, (May. 6, 2023, 05:25 PM),
https://chraj.gov.gh/wp-content/uploads/2018/04/Impact-of-Mining-on-Human-Rights-Experiences-from-
Ghana.pdf.
50
CHRAJ, Impacts of Mining on Human Rights Experiences from Ghana, (May. 6, 2023, 05:25 PM),
https://chraj.gov.gh/wp-content/uploads/2018/04/Impact-of-Mining-on-Human-Rights-Experiences-from-
Ghana.pdf.
Page: 10
maintain the status quo and pretend to get serious about contracting and monitoring better.
However, that option, as the Ghanaian cultural and political orientation has shown over time,
is sure to fail completely. The reason for the failure of state ownership of natural resources, in
the case of Ghana and many other countries across the continent, may be linked to culture. A
comparative analysis of the African and Asian situations is sure to reveal quite a number of
parallels. While the Asian Tigers, particularly the Chinese and the Malaysians, have built a
culture founded on the sacred pillars of probity, accountability, honesty, patriotism and service,
Africa, and Ghana, by delimitation, has not. Again, while a politician or public official is likely
to go to jail for acts of bribery and corruption, same is very unlikely in this part of the world.
Consequently, while a case may be made for state ownership of mineral resources for these
countries which have demonstrated utmost responsibility and good faith in the management of
resources entrusted to them, same cannot be said of Ghana.
The other option is to break with the past and chart a new path which essentially recognizes
the individual rather than the State as the rightful owner and manager of minerals found on or
under his land. Juxtaposing Ghana’s system of mineral resource management with that which
exists elsewhere, particularly the property-owning Western world such as the United States
where private ownership of these resources is encouraged, the latter obviously holds a better
scorecard. By that arrangement, the State steers clear of acts that may lead it to meddle in the
ownership and management of mineral resources found in private individuals’ lands. The result
is that the system can make millionaires of those on whose lands these resources are found.
The trickle-down effect of this cannot be lost on us. A viable private sector-led economy is
enabled to build good businesses and create decent jobs, providing the State with enough
revenue through taxes obtained from these businesses and jobs. Ultimately, the State is better
for it as the quality of life of its people is enhanced in significant ways.
7. CONCLUSION
The object of this paper was to expose the age-old phenomenon of mismanagement of Ghana’s
mineral resources by the State that is entrusted with the power to manage them. I observe that
thus far, the State has shown that it is not a good manager of our precious mineral resources.
The record is not one we can be proud of; it is one of reckless contracting and weak and
deficient monitoring schemes. Indeed, it is a scorecard of poverty in the midst of abundance.
Page: 11
Overall, it is my argument that a review of the legal framework to allow individuals,

institutions, stools or groups to own and manage their mineral resources, rather than the State,
offers the key to unlocking the country’s economic fortunes.
Page: 12

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Indian Journal of Law and Legal Research Volume V Issue III | ISSN: 2582-8878

AN OVERVIEW OF GHANA’S HISTORY OF

Kwame Gyan, Senior Lecturer, University of Ghana School of Law, Ghana

Minerals, in whatever form, remain arguably nature’s most valuable gift to

2. GHANA’S SHARE OF MINERAL RESOURCES

3. GHANA’S MINERAL RESOURCES MANAGEMENT REGIME

And in Acquah JSC’s view,

4.1 Bad Contracting

4.2 Poor Monitoring Schemes

4.3 Tricks by Large Companies

5. THE IMPLICATION OF THE MISMANAGEMENT

6. THE WAY FORWARD

Overall, it is my argument that a review of the legal framework to allow individuals,

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