What has been the effect of illegal mining on the agriculture sector in Ghana?
Introduction
The regional dynamics in Ghana
Ghana is in West Africa and has ten (10) regions. These regions are broadly divided into northern
and southern parts of Ghana. The climate, agro-ecological and economic disparities between the
south which has two rainy seasons, and the arid north which has only one rainy season, are polls
apart (World Food Program 2016). The northern part of Ghana is predominantly employed in
animal and crop farming. Climate change is contributing to increasing erratic rainfall in this area.
This has impacted the main economic activity in the area, thus in this region chronic poverty and
food insecurity are widespread.
“Whereas in the south around 20 percent (20%) of people live in poverty, in the north that figure
is 60 percent (60%). In the Northern Region thirty percent (30%) of children under the age of five
are stunted or chronically malnourished, and this affects not only their growth but also their
educational development and economic potential. In the Upper East Region, nearly thirty percent
of people do not have adequate access to food, compared to a national average of five percent”. –
World Food Program (2016).
The northern sector serves the bread basket of Ghana as the Southern majors in both cash crops,
timber and tubers. Out of every 10 families in the northern sector, 8 are actively engaged in farming
where as about 3 are engaged in farming in the southern zone. (Ghana Statistical Service, 2010
population census)
The Agriculture Sector
Food sustainability is eminent to the survival of all states but there is an overarching interest
beyond just survival in the case of Ghana. For Ghana, agriculture is the backbone of the Ghanaian
economy. With a population of about twenty-eight (28) million people and a labour force of about
twelve (12) million, the agriculture sector employs about 55% of the entire labour force (budget
statement 2016). Agriculture has been the single largest contributor to the Gross Domestic Product
of Ghana since independence in 1957. It is largely dependent on rain fall and on water bodies for
irrigation during the dry season. This makes the sector very delicate for economic, political and
social permutations as the livelihood of more the half the families in Ghana depends on it.
The Mining Industry
Ghana remains one of the world’s richest countries in mineral exports. Ghana is the second largest
world producer of gold. It is also a major producer of diamonds, bauxite, manganese, iron ore, and
in recent year oil. The mining industry of Ghana accounts for 5% of the country’s GDP and
minerals make up 37% of total exports, of which gold contributes over 90% of the total mineral
exports. Thus, the focus of Ghana’s mining and minerals development industry remains focused
on gold. – (Wikipedia).
Ghana’s mining sector comes in two main ways; Large scale or Corporate mining and small
scale mining. The small-scale mining, by law, is the preserve of the indigenous people who
largely do surface mining with pick axe, hoes, and pans. A phenomenon of illegal mining as part
of small scale mining has developed in the wake of a growing unemployed youthful population.
Even worrying is the influx of Chinese into the illegal mining market in Ghana. They use
bulldozers, excavators, and other unapproved implements in this sector which is reserved for
indigenes.
In Ghana, small-scale mining was regularised in 1989, and over 1.5 million troy ounces of gold
and 8.0 million carats of diamonds have been produced by the sector. By the end of 2001, 420
small-scale mining concessions had been licensed, generating over 100,000 miners in the country
(Amankwah and Anim-Sackey, 2003). The Act was repealed in 2006.
The battle of the two sectors for land
The mining sector in Ghana has seen a lot of growth in recent years. It served as a hub to
accommodate the growing unemployed youth, create in its wake a large market for illegal small
mining activities. An influx into the sector meant more demand for land.
Keith Slack (2016) rightly explains that “the heart of the issue is that mining activity has come
into direct competition with another predominant means of economic development in rural areas:
small-scale agriculture. Tensions over control of land and, most importantly, water have led to
community protests and violent conflict. Reconciling these two important development drivers has
become a critical governance issue, particularly in the most fragile states where the conflicts
between the two can often be seen most starkly”.
Not only has farm lands suffered from land degradation, these mining activities, both legal and
illegal, have dealt a major blow to major water bodies which used to be the source of water for
irrigation in most of the farming communities.
PICTURE 1:
From the utility curve, to establish an equilibrium, mining and agriculture would have to operate
at lM and lA respectively. If the mining sector acquires more land by moving from lM to lMii. This
reduces the availability of land for use of the agriculture sector from lAii. This moves the
equilibrium from point e to A. This will mean lesser food production and lesser jobs in the
agriculture sector, influx into the mining sector, more externalities from the mining activities like
the degradation of land and destruction or pollution of water bodies. On the other land, an increase
in the use of land for agriculture purposes from lA to lAii and a reduction in the operations of the
mining sector from lM to lMi. It is therefore to create a healthy balance between the two sectors.
Fred (2015) explains that from the economic view point, mining booms can induce a mineral
dependent economy, and this stifles the non-mining sectors of the economy, including agriculture
and manufacturing (Ballard and Banks, 2003), with agricultural exports becoming less
competitive. On the other hand, mismanagement of the economic boom has been mentioned as the
key political concern (Ballard and Banks, 2003). Per Ross (1999), increased government revenue
(from mineral exports) can lead to: myopic policy formulation, greater rent-seeking behaviour by
interest groups, general weakening of state institutions, and less emphasis on accountable and
transparent systems of governance.
The conundrum of the mining and agriculture sector
Fred (2015) recounts that there is a growing concern about the real impact of the mining industry
on agriculture in Ghana and other parts of the world. Large-scale mining and mineral exploration
have displaced hundreds of thousands of rural dwellers in the developing world: the farmlands and
rangelands on which they have long subsisted have been demarcated to multinational mining
companies by the government (Hilson and Banchirigah, 2009, Fred 2015). In Ghana, the expansion
in the mining sector has not only led to the degradation of agricultural lands, but also to a decrease
in land for agricultural production, resulting in shortening of the traditional fallow from a period
of 10–15 years to one of 2–3 years (Aryeetey et al., 2004; SAPRIN, 2002, Fred 2015).
PICTURE 2:
Adopted from: Communities relocated to make way for gold mines in Ghana struggle with loss
of agricultural land, unemployment, and environmental damage. Photo: Neil Brander / Oxfam
America.
PICTURE 3:
Farm land taken over illegal small scale miners. (picture from Ghana web)
Small scale mining has dealt a great blow to the agriculture sector; farm lands have been lost.
These illegal miners pollute water bodies, destroy farm lands and worst of all, the do no land
reclamation. A lot of cocoa farms have been destroyed in the wake of these activities.
In principle, the mining and agriculture sector are both pathways out of unemployment and
poverty, but a disequilibrium can result in a collateral damage for any economy; a situation where
one sector grows abnormally or is mismanaged, it dwarfs or diminishes the progress the other.
Both sectors employ about 70% of the labor force in Ghana. The government raises a lot of money
in the form of taxes and royalties from companies in the mining industry.
Keith Slack (2016) points out that, agriculture provides direct benefits to those who engage in it. Farmers receive payments for crops they produce, which they can then use to invest in future production and to pay for their
families’ basic needs. Mining can also play a role in promoting development, although more indirectly, by generating revenues for governments. Governments can use taxes and royalties paid by mining companies for infrastructure investments and other productive purposes. Mining companies also pay for community development programs, build schools and roads, and make other investments.
Literature review
Tom-Dery et al (2012) in their research paper concluded that the activities of illegal small-scale
miners in Nagodi (a suburb in the northern region) have resulted in land degradation through loss
of vegetation and soil erosion. Generally, research (Barry, 1996; United Nations, 1996;
Heemskerk, 2002; Tom-Dery et al., 2012) suggest small-scale gold mining as gaining global
importance both as a source of subsistence for the poor and as a cause of environmental
degradation. Akabza (2005) however, suggested that the concentration of mining activities in an
area results in the environment undergoing rapid degradation and its immense economic value
diminishing from year to year. The Upper East Region of Ghana, is highly degraded with the
resultant loss of vegetation cover, fertile top soil and wild faunal species because of adverse
climatic trends and negative factors influencing environmental degradation such as small-scale
gold mining (Gyasi et al., 2006; Tom-Dery et al., 2012). Desertification and land degradation are
two closely interrelated processes; Land degradation refers to the progressive loss of the intrinsic
or natural quality of the land and if this process occurs in arid or semi-arid areas, it is called
desertification (Gyasi et al., 2006; Tom-Dery et al., 2012).
Fowzia Adiyah (2014) assessed the impact of the growing mining operations on the water bodies
that serve as a source of water for irrigation for farmers during the dry season. Her work revealed
massive destruction and introduction of chemicals that are used by illegal miners in their
operations in the water. She concluded that small-scale gold mining activities have impacted
negatively on the water quality of the Sintim and Akantansu rivers, and that the use of water from
the two rivers for domestic purposes could pose a potential health risk to consumers and have also
reduced in volume.
Fred (2015) concluded in his research that agricultural lands were being claimed and converted for
mining operations. This possibly triggered the policy agenda for acreage expansion and production
of certain major food crops to compensate for crop production loses, resulting in significant
improvement in the production of most major crops; especially in the output of cassava, plantain,
and yam. his research findings supported his hypothesis that ‘resource curse’ occurs only
conditionally, and may be offset by proactive policies and sufficiently good institutions. However,
he submitted that clearing of increasingly virgin lands also has policy implications: dealing with
the issues of deforestation, habitat destruction, biodiversity loss, climate change and environmental
sustainability, which need to be taken into consideration by policy advisors, especially in this 21st
century when the world is advocating for sustainable development, reduction in atmospheric
carbon and suffering from increases in extreme climatic events.
Objective of the paper
The two sectors are very traditional to the economy of Ghana. With an upsurge in youthful
unemployment in Ghana, the mining sector became as hub for these youthful population. There is
currently about 2million people involved directly in the illegal mining. These are persons who are
plying their trade without permit. With or Without permit, such an influx demand for more land
for their operations. Earlier researches have concentrated on the impact of mining on either water
bodies or specific communities. This paper seeks to compare the performance of the agriculture
sector year on year, in terms of yearly growth of the sector, the consistent contribution of the sector
to the Gross Domestic Product of Ghana, all in the wake of the growing activities of illegal miners
in Ghana. This paper hopes to assess how the mining and the agriculture sector have co-existed in
the last decade. Lastly, this paper will to relate the economic concepts learned in class to the
conundrum of the two sectors and form valid and concrete connections and arguments.
Hypotheses
The paper seeks to draw conclusions based on the facts available that;
1. The externalities from illegal mining has negatively affected farming activities in Ghana.
Data and methodology
The paper will rely on documents from nationally recognized institutions and organization like
National Development & Planning Commission (NDPC); EPA-Ghana; Ministry of Food and
Agriculture (MoFA); Ministry of Lands, Mines, and Forestry; Minerals Commission; Lands
Commission; Center for Policy Analysis (CEPA); Institute of Economic Affairs (IEA); Institute
of Statistical Social and Economic Research (ISSER); Ghana Chamber of Mines and other
academic works done by scholars in this area.
Agriculture Sector and Illegal Mining Sector
Small scale mining is the preserve of Ghanaian per the Minerals and Mining Act 2006. The law
seeks to legitimize the activity fir local people but presents some legal caveats that defeats the very
purpose for which it was legislated. In Section 233 of Act 703, it provides that a Ghanaian must
have an amount of money in his/her account, undergo numerous check and approval processes by
the Environmental Protection Agency and must wait for an approval process which might take 3
6months. These requirements to all intents and purposes have made the people who are at the
bottom of the social ladder unable to access the benefits of the act.
This loophole has created room for the influx of Chinese immigrants into the mining sector. The
mostly use the local people as a bait to secure the Small-Scale Mining permit. They operate with
little or no regards for the environment, water bodies and farms. On 23 April, 2013, the Guardian
reported that, “the scale [of illegal mining in Ghana] is so vast it is difficult to quantify,” said
Brigadier General Daniel Mishio, Chairman of Ghana’s national security commission for lands
and natural resources. “Apart from the security threat that is posed by the weapons that [illegal
miners] wield, we even also have issues of human security,” he said. “In certain areas, people
don’t even get clean drinking water, and in some areas, you can see that most of the forest cover
has been destroyed. This poses a very big danger to our future.”
The agriculture sector experience a significant growth from 2008-2010, with an average growth of
about 6%. The sector recorded a growth rate of -1.7 in the 2007 financial year. During the Global
Financial Crisis, there was massive cuts on the budgets allocation to the agriculture sector and
Local Government Administration to support some of the Financial Institutions in Ghana in 2006
and 2007. Within this same period, there was an influx into the mining sector by many unemployed
youths. These actions where been blamed for the negative performance of the sector in 2007. In
2008, new programs were introduced to boost the growth of the sector. Some of these programs
were National Youth Employment Program, Youth in Agriculture Program, Cocoa Mass Spraying
Exercise, Free Sidling, Microfinance and Small Loan Centers in rural farming communities, and
Subsidies on Farming Implements. These programs took most of the youth from the illegal mining
sector and sought to assist farmers to produce more. Table 1 catalogues the growth rates from 2006
to 2010.
Table 1.
2006 2007 2008 2009 2010
1. AGRICULTURE
(Growth Rate)
5,415
–
5,322
(-1.7%)
5,716
(7.4%)
6,129
(7.2%)
6,453
(5.3%) Crops 3,794 3,743 4,064 4,479 4,703
Cocoa 537 493 509 535 677
Livestock 437 458 481 502 526
Forestry & Logging 736 706 682 687 757
Fishing 448 416 488 460 467
*Source: Ghana Statistical Service (GSS), Revised Gross Domestic Product 2010
Observations from table:
1. Between 2006 and 2010, Agricultural GDP at 2006 Constant Prices increased from
GHC5,415 million to GHC6,674 million (GHC1,259 million increase) representing 23%
growth in GDP over the 5-year period.
2. GDP growth in 2007 was -1.7% and is the only time over the period 2006-2010 that GDP
declined.
Growth in agriculture sector from 7.4% in 2008, and 7.2% in 2009, the sector diminished to 5.3%
in 2010, hitting the bottom of 0.8% in 2011. It then stayed down at 2.3% in 2012, recovering
somewhat to 5.7% in 2013 and then 2.6% in 2014. With these increases in the agriculture sector,
it boosted the overall growth rate of Ghana.
In the national budget for 2016, the Finance and Economic Planning Minister, Hon. Seth Terkper
told the Parliament on Friday, November 14, 2015, that agriculture sector which was projected to
grow by 4% in 2015, recorded a growth rate of 0.04% signifying a down turn from the revised
target of 3.6%, its record all time lowest.
The contribution of agriculture to the country’s Gross Domestic Product (GDP) has dropped by
an alarming 12.8% in just seven years. It dropped from 31.8% in 2009 to a mere 19% as of
September 2015, a period of seven years.
On March 7, 2016, Alhaji Iddris Hassan, Chairman of the Supreme Consultative Council of the
Ghana COCOBOD, made the call at a public forum organized by the Ghana COCOBOD, at
Dunkwa-On-Offfin, in the Upper Denkyira East Municipality of the Central Region for Cocoa
farmers. He lamented over the rate at which large cocoa farms were being destroyed because of
activities of illegal small scale mining, saying if care was not taken and the menace persist,
Ghana’s cocoa industry would suffer a serious setback.
It is estimated that about 2% of cocoa plantations and 3.7% of all farms lands get destroyed by
illegal mining activities each year since 2010. These activities have led to a massive reduction in
the tones on cocoa produced by Ghana from 2010. From 1million tones of cocoa in 2010, it had
reduced to about 650,000 tones. With the loss of farm land, food self-sufficiency is threatened.
This led to a situation where Ghana spent a total of about $2.4 billion importing food in 2015, the
very produce that rot in the farms during seasonal periods (maize, onions, tomato, pepper,
plantain, etc.).
Limitations
All the data is used in this paper is based on the review of works done by other scholars, data
from state institutions and articles in the Ghanaian media space. More so, it was difficult
assessing some of the vital documents from the official websites of the Ghana Cocoa Board, The
Official web pages of the Parliament of Ghana and the Ministry of Ghana. The paper solely rely
on secondary data.
Recommendations
1. The Ghanaian government should introduce a Pigouvian tax on the acquisition of
land concession for mining activities. These monies can be used for land
reclamation or subsidizing the agriculture sector. A Pigouvian tax will increase the
cost of production of these mineral products which will reduce the quantity
produced and make the sector less attractive.
Tariff reduces shifts the supply curse to S+Tax. This increases the price to PT and
quantity demanded from Q* to QT. The shaded area represents the Tax that the
government will collect in the form of revenues.
2. The Environmental Protection Agency should be tooled to deliver on their mandate.
3. The approval process should be made more friendly to the local people by doing
away with the bottlenecks and the delays. This will help do away with the foreign
influence in the small-scale mining sector.
Conclusion
Illegal mining does account funny for all the externalities it brings; the pollution of eater bodies
which served as source of irrigation for farmers; and farm lands are destroyed. The government
would have to take a critical look at the two sectors and balance the operations of the mining and
agriculture. There is a clear case that the regulators are overwhelmed with the duty of regulating
these activities either because the law was difficult to implement or they are understaffed. I submit
that the government should be consider legalizing the act and bring all the illegal miners under
umbrella to control and supervision. That is the only way to kick out the Chinese immigrants who
have taken over the small-scale mining sector.
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