Gold mining continues to be a noteworthy source of growth and wealth making in some emergent states with superlative influences in Papua New Guinea (15% of GDP), followed by Ghana (8% of GDP) and Tanzania (6% of GDP) and with over 210 billion USD estimated to be generated in 2012 globally, gold has at all times been one of the major sources of export and, therefore, foreign exchange earnings (World Gold Council, 2013). In May 2019, Ghana was believed to have surpassed South Africa as Africa’s leading gold producer (Graphic Online, 2019) contributing roughly 95.billion GH₵ in the year 2018. Generally, the influence of Gold on Ghana’s GDP fluctuated after recording its lowest in 2012 of about 7.8 billion Ghanaian cedis (GH₵), roughly 1.3 billion U.S. dollars (Statista, 2021).
However, the operation of Galamsey is believed to be costing the public purse by way of loss tax revenue and exports. For instance, it is recounted that in 2016, the Ghanaian government lost an approximated amount of 2.3 billion USD in monetary proceeds through unlawful mining (Mining Review Africa, 2021). Aside the mislay of revenues, an International Growth Centre (IGC) 2019 analysis from its studies in the western region tells it would cost almost $250 million to salvage lands and water bodies ruined by Galamsey (International Growth Centre, 2015; Graphic online,2017). In the same year 2019, the government of Ghana had to upsurge budgetary provision for the Mineral Commission from GH₵ 28.62 million in 2018 to GH₵ 63.55 million signifying an increase of 122% just to combat Galamsey (Graphic online, 2019). Citinews in 2017 reported that, the execution of Ghana’s anti-Galamsey strategy is assessed to cost $150 million (Citinews, 2017). With these figures out there, I believe we need no one to make us realize that this menace Galamsey and its associated financial stress on the nation’s purse is driving or would drive the economy in the wrong direction as all these funds could be useful in developing mining communities and the country at large.
Aside its stress on public finance, one delicate resource of our economy that Galamsey affects is that of human capital. The Human capital of any nation refers to the fiscal worth of the qualities of labor that have influence on productivity. Human capital mentioned here are mainly the aptitudes of the working force of the nation and not essentially about works itself (Economics Online, 2021). In lieu of this, we won’t be wrong to identify education as one illustration of human capital investments by any state as these investments leads to better monetary due to its correlation to economic growth (Steven Nickolas, 2021). It is asserted that, preceding the activities of Galamsey in mining communities, the performance and turnout of pupils were very high, but, for the love of money, these pupils exit the classroom to prospect for gold at Galamsey sites resulting in a high rate of drop outs (Peacefm Online, 2015). It is important to understand that, the significance of education cannot be limited to rendering persons refined but correspondingly to enable an infantile economy solve diverse nonetheless correlated macro-economic setbacks like poverty, earnings disparity, population, investment, underutilization of funds by increasing involvement of persons in the process of growth.
I would end my scrutiny of Galamsey as economic crisis on the note that, international economic relation between Ghana and some international republics with citizens involved could be ruined. International relation in this logic describes the collaboration of nation-states and non-governmental organizations in the fields of policymaking, money matters, and security. In this era of globalization, international economic relations play an imperative role in the development of economies across the globe affecting many economies in the area of trade, migration, information flow, foreign capital investments and even intercultural co-operations (Economy Watch, 2021) and providing clarity as to why many nations are highly diplomatic in dealing with global societies. With foreign citizens especially Chinese involved in Galamsey in Ghana and contributing to the destroying of lands and water bodies, causing a lot of threat in the area of national security (BBC News, 2021; NewsCom World, 2020), it is highly prominent that Ghana as a sovereign state take delicate steps as we war against considering the fact that experts have raised concerns on the possibility the war against can affect Ghana’s relationship with China (Hammond, 2019). Even though there has been some guarantees in the past by both the Ghanaian and Chinese government to maintain a good relationship for a common economic benefit of its citizens (Ghanaweb, 2020), I am afraid things can get out of hand in the coming years if nothing is done (South China Morning Post, 2013; Financial Times, 2017).
On these note, it would be expedient on our side as a nation to be aware of the Galamsey as a form of economic crisis our country is facing and reinforce our combat against this menace now or blame ourselves for all associated economic challenges we would face in the years to come.
References
BBC News, (2021). The illegal gold mines killing rivers and livelihoods in Ghana. https://www.bbc.com/news/av/world-africa-58119653
Citinews, (2017). Implementation of Anti-Galamsey plan to cost $150 million. https://citifmonline.com/2017/07/implementation-of-anti-galamsey-plan-to-cost-150-million/
Economics Online, (2021). Human Capital: What It Is and How It Impacts the Economy. https://www.economicsonline.co.uk/competitive_markets/human-capital-what-it-is-and-how-it-impacts-the-economy.html/
Economy Watch, (2021). Globalization and International Economic Relations. https://www.economywatch.com/globalization-and-international-economic-relations#:~:text=In%20the%20era%20of%20globalization%2C%20countries%20have%20realized,easier%20movement%20of%20goods%20and%20services%20across%20nations.
Financial Times, (2017). Ghana crackdown on illegal gold mining inflames tensions with Beijing. https://www.ft.com/content/cb032036-2a63-11e7-bc4b-5528796fe35c
Ghanaweb, (2020). China-Ghana to deepen bilateral ties. https://www.ghanaweb.com/GhanaHomePage/business/China-Ghana-to-deepen-bilateral-ties-1088956
Graphic online, (2017). ‘$250 million required to reclaim lands and water bodies destroyed by Galamsey’. https://www.graphic.com.gh/news/general-news/250-million-required-to-reclaim-lands-and-water-bodies-destroyed-by-galamsey.html
Graphic Online, (2019). Ghana overtakes South Africa as top gold producer: https://www.graphic.com.gh/business/business-news/ghana-news-ghana-overtakes-south-africa-as-top-gold-producer.html
Graphic online, (2019). Minerals Commission gets more funds to fight ‘Galamsey’. https://www.graphic.com.gh/news/general-news/minerals-commission-gets-more-funds-to-fight-galamsey.html
International Growth Centre, (2019). The footprints of Galamsey in Ghana: The Western Region under the microscope. https://www.theigc.org/project/the-footprints-of-galamsey-in-ghana/
Joseph Hammond, (2019). Sweet and Sour: China in Ghana. https://thediplomat.com/2019/12/sweet-and-sour-china-in-ghana/
Mining Review Africa, (2021). Galamsey in Ghana: A policy impasse? https://www.miningreview.com/west-africa/galamsey-in-ghana-a-policy-impasse/#:~:text=Nationally%2C%20galamsey%20represents%20huge%20sums%20in%20lost%20revenue,%242.3%20billion%20in%20fiscal%20revenues%20through%20illegal%20mining.
NewsCom World, (2020). Chinese Debt Trap Diplomacy – The Case of Ghana’s Galamsey. https://newscomworld.com/2020/07/27/chinese-debt-trap-diplomacy-the-case-of-ghanas-galamsey/
Peacefm Online, (2015). Pupils Abandon School for Galamsey. https://www.peacefmonline.com/pages/local/education/201505/240739.php
South China Morning Post, (2013). Chinese gold miners flee Ghana amid crackdown and reports of abuse. https://www.scmp.com/news/china/article/1267251/chinese-gold-miners-flee-ghana-amid-crackdown-and-reports-abuse?module=perpetual_scroll_1&pgtype=article&campaign=1267251
Statista, (2021). Contribution of gold to Gross Domestic Product (GDP) in Ghana from 2013 to 2020; https://www.statista.com/statistics/1272300/annual-contributions-of-gold-to-gdp-in-ghana/#:~:text=In%202020%2C%20gold%20in%20Ghana%20contributed%20close%20to,the%20lowest%20value%20added%20of%20the%20precious%20metal.
Steven Nickolas, (2021). What Is the Relationship Between Human Capital and Economic Growth? https://www.investopedia.com/ask/answers/032415/what-relationship-between-human-capital-and-economic-growth.asp
World Gold Council, (2013).Gold industry generated over $210 billion for the global economy in 2012, new study finds: https://www.gold.org/news-and-events/press-releases/gold-industry-generated-over-210-billion-global-economy-2012-new#:~:text=Gold%20mining%20is%20a%20significant%20source%20of%20growth,source%20of%20exports%20and%2C%20therefore%2C%20foreign%20exchange%20earnings.
