Extractive Sector Ghana generates $15 for each $100 in exports.

It is important to observe that the extractive sector is not the only industry facing difficulties in Ghana. The COVID-19 pandemic has severely impacted the country's economy, with many enterprises struggling to survive. In addition, the country confronts additional economic challenges, such as import reliance and inefficient tax administration, that must be addressed.

Ghana's extractive sector has historically been a significant contributor to the country's export revenues. However, recent remarks by Joe Jackson, director of operations at Dalex Finance, have brought to light a concerning trend. According to Jackson, Ghana generates only $15 in income or revenue for every $100 in exports.

Jackson spoke during a Twitter Space Conversation held on April 23, 2023, with the topic "The Current Economic Crisis: Is There Any Silver Lining; What is Ghana Missing?" He noted that the extractive sector is dominated by foreign companies, and that unlike in Nigeria, where the majority of extractive sector companies are owned by Nigerians, Ghanaian companies are not the dominant actors in the sector.

Concerning Ghana's economy is the low rate of revenue retention in the extractive sector. In addition to paying taxes and mineral royalties, every business operating in the extractive sector in Ghana is required to cede 10% of the business to the government. Due to the foreign ownership of the majority of businesses in the sector, Ghana is only able to retain a minor portion of the revenue generated by the sector.

The problem of low revenue retention in the extractive industry is not unique to Ghana. Numerous resource-rich nations have struggled with the same issue. Nonetheless, the dearth of local ownership in Ghana's extractive sector is particularly concerning. This is due to the fact that the sector is a significant contributor to the country's economy, and without greater local ownership of businesses, it may be difficult for the country to completely benefit from its natural resources.

The government must take action to address this issue and encourage greater local ownership of extractive sector enterprises. Providing incentives for local businesses to invest in the sector is one possible solution. For instance, the government could provide tax exemptions or subsidies to businesses owned by Ghanaians in the majority. Creating a more favorable investment climate for local enterprises is another solution. This could be accomplished by building infrastructure, such as roads and power facilities, and enhancing the legal and regulatory environment.

It is important to observe that the extractive sector is not the only industry facing difficulties in Ghana. The COVID-19 pandemic has severely impacted the country's economy, with many enterprises struggling to survive. In addition, the country confronts additional economic challenges, such as import reliance and inefficient tax administration, that must be addressed.

According to Dr. Priscilla Twumasi Baffour, a senior lecturer in the Economics Department at the University of Ghana, the country's current economic challenges present an opportunity to restructure its economy for sustained growth and development. This includes addressing the challenges confronting the extractive sector and encouraging greater local ownership of sector businesses.

Ghana's extractive sector has been a significant contributor to the country's economy, but the absence of local ownership of businesses in the sector prevents the country from reaping the full benefits of its natural resources. The government must promote greater local ownership of enterprises in the sector and improve the investment climate for local businesses. This will not only help to address the challenges confronting the extractive industry, but will also contribute to the country's sustained economic growth and development.