OBG talks to Mike Hammah, Minister of Land and Natural Resources

Interview: Mike Hammah

Why are land rights an issue for foreign investors?

MIKE HAMMAH: The history of Ghana’s land administration has been fraught with challenges. Governments have moved our land policy back and forth. Now we have a land commission, and the goal has been to harmonise regulations under a “one-stop shop” concept. The legal framework is in place, but in terms of the physical integration of these laws, we still have some way to go.

The Ghanaian government only owns about 20% of the country’s land. The remaining areas are described as custom lands. Most of this land faces the challenges of indefinite or multiple owners, which causes social agitation between traditional authorities or groups. This is not only an issue for international investment. Because of unclear titles, there is a lot of latent capital in the system. We have been able to extend title registration throughout the regions, and the turnaround time for receiving land titles has been reduced to an average of two months. As the government deals with the issue, the impact will be felt not only by international investors, but especially by Ghanaians.

How can local processing and transformation for mineral commodities be encouraged?

HAMMAH: We need to decide what the focus of the mining sector should be, and how it can promote growth. If we want to reap the maximum benefits of our mining resources, we need to promote value added products and local content. We are currently following the 2012 mining initiative, which focuses on mining support services, and essentially promotes and encourages the participation of Ghanaian companies.

We are also building capacity along the entire value chain, which will ensure that we add value each step of the way. A good example of this is the Precious Minerals Marketing Company, which exports raw diamonds and has now opened a local diamond polishing plant in Accra. We are also working on constructing a gold refinery to add value to gold. When countries want to reap greater benefits from their natural resources, they should go beyond simply exporting raw commodities, and this is what we envision for Ghana. This policy is directed at creating jobs and enhancing the value of the precious minerals that come from our land. The next step will be to encourage mining-related business incubators that can use the exploration of minerals to spin off into new productive ventures.

What can the government do to balance increased royalties and taxes with foreign investment?

HAMMAH: In recent years we have seen that the African continent has been moving towards getting more benefits from its mineral resources. Keeping that in mind, we need to make sure that whatever we do, we do not do it alone. When evaluating investment conditions, companies compare countries and try to determine where their investments will turn the highest profit.

Ghana will continue to be an attractive place for investors in the mining sector, but we still need to be proactive. We try to balance incentives to attract investors while ensuring that the local communities that bear the brunt of the operations are well protected.

In what ways can the environmental risks of mining be assessed and reduced?

HAMMAH: It is essential for us to broaden stakeholder consultation and encourage partnerships amongst all stakeholders. Government, civil society organisations and industry operators need to understand that we must work together to ensure sustainable mining operations. It is important that we advocate healthy business practices and focus on the future consequences of our actions. Even if natural resources become depleted, future generations will see power plants, highways and airports – infrastructural benefits that come from mining. We have to ensure intergenerational equality, since future generations also have a stake in these resources. If we mine responsibly, we can put in place structures that allow the growing population in the future to benefit from the operations taking place now.