Four percentage point growth in gold production in Ghana has been projected for this year. According to Fitch Solutions, the research arm of Fitch Ratings, the growth is attributed on the back of new gold mining projects to be carried out by mining firms as well as the integration of artisanal miners into the country’s formal gold mining sector.
Growth in the mining sector coupled with increment in gold prices due to the Russia-Ukraine war, Fitch Solutions asserts, is expected to widen the country’s trade surplus for 2022 with exports of the gold and oil to increase by a robust 26.9% this year over the 1.8% recorded in 2021. Fitch Solutions however, said it expected Ghana’s oil output to decline by 1.3% this year.
“Elevated global commodity prices will cause Ghana’s trade surplus to widen in 2022. Supply disruptions and risk-off sentiment following Russia’s invasion of Ukraine have increased prices of crude oil and gold – Ghana’s two leading export commodities (together accounting for roughly a third of total exports) – and in turn Ghana’s export earnings,” said Fitch Solutions in a report.
“From a volume perspective, however, a projected decline of 1.3% in oil output in 2022 indicates that Ghana will not be able to reap the full benefits of elevated energy prices. In contrast, we expect gold production to expand by a healthy 4.0%, supported by the start of new gold mining projects and the integration of artisanal miners into Ghana’s formal gold mining sector. Taking these dynamics into account, we project merchandise exports to increase by a robust 26.9% over 2022, up from 1.8% in 2021,” the research arm added.
Ghana has lost its position as the continent’s biggest bullion (gold) producer to South Africa, when its gold production declined by 29.9% to slightly over 2.8m ounces last year – 2021 – from 4.02m ounces in 2020.
Prior to 2020, gold production by Ghana dropped from 4.57m ounces in 2019. The recorded gold production of 2.8m ounces for 2021 is the lowest since 2008. The decline in the production of the precious metal was despite a 16% anticipated rebound in production for 2021 by the Ghana Chamber of Mines. Mainly accounting for the decline in production, the Chamber was due to low investments in the sector coupled with taxes and levies imposed on mining firms. According to the chamber, taxes and levies imposed on mining firms are making exploration investments into the country’s mining sector unattractive.