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Ghana EITI to explore impact of mining on local economy – Obuasi under spotlight

minersThe bumpy deplorable road leading to the gold city of Obuasi in the Ashanti region depicts a worrying state of an area that has played a significant role in Ghana’s economic development.

For over 100 years, mining at Obuasi has been a major contributor to the country’s foreign exchange earnings – mining has contributed an average $2billion to government’s revenue in the past five years.

Mining communities however complain the industry has failed to deliver tangible benefits for local people.

‘They should hear the communities cry,’ wailed Madam Gifty Owusu Afriyie, who represents Tutuka Central electoral area in the Obuasi Municipal Assembly. ‘Children are suffering and women too are suffering because they have to travel a long way before they can fetch some water.’

Concerns are rife that the government has used up revenue from mining without recourse to addressing the development challenges of local mining communities.

The quality of spending minerals revenue by local assembly authorities has been questioned. For instance, the Obuasi Municipal Assembly in 2007 constructed the Obuasi Entrance Arch at a cost of Gh₵89,000 whilst local people yearn for good road network, potable water, quality healthcare and education.

The next Ghana Report on the Extractive Industries Transparency Initiative (EITI) would be keen on how the mining sector has negatively or positively impacted on the economy.

‘If there is any community in Ghana that we all need to be concerned about the lessons, experiences and impact of mining, its Obuasi, especially in this moment that the company [AngloGold Ashanti] is in its critical state,’ noted Emmanuel Kuyole, Africa Regional Coordinator, Natural Resource Governance Institute (NRGI).

AngloGold has put the Obuasi mine under what is termed as ‘care and maintenance’, following operational losses recorded in recent times.

The redevelopment of the concession has left over 5,000 workers losing their jobs – only 500 to 600 of the workforce are being maintained.

The two-year break is expected to cripple the ability of the Obuasi Municipal Assembly to generate enough revenue to finance local development projects – as much as 70 percent of the Assembly’s total property rate mobilization is from AngloGold Ashanti.

‘We’re looking forward into how we can take advantage of the number of years that is left for mining to take place in Obuasi to actually develop a local economy that will be independent of the mine so that we can find jobs and grow other sectors and make sure that once mining comes to an end, the economy of this great place will also not come to an end,’ stated Mr. Kuyole.

Obuasi and adjourning districts mined by AngloGold Ashanti are under the spotlight of a research by the Centre for Social Impact Studies (CeSIS), through the civil society oversight activity of the NRGI.

Under the Ghana Extractive Industries Transparency Initiative (GHEITI), interest groups have been analyzing the EITI reporting on sub-national revenue management and other benefits received at the local level.

The validation dialogue process involves industry players, local authorities, regulatory bodies, civil society and the media.

Major issues emanating from the discussion is the proper use and formula for sharing of mining royalties.

The consensus is that deprivation of local people of benefits from mineral resources could be disastrous as they sacrifice farms and livelihood sources for mining to thrive.

‘Government must begin the process of addressing community challenges within the framework of its own development planning processes,’ observed Richard Ellimah, Lead Researcher of CeSIS Study.

The EITI seeks to create the missing transparency and accountability in revenue flows from the extractive industry.

The 2012-2013 EITI Ghana Report will show the contribution of the extractives sector to the local economy, exploring how much revenue has been generated and its application.

Story by Kofi Adu Domfeh/ Luv fm

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Reporting Oil and Gas project was launched on 4th June 2009atTakoradi, Western Region, Ghana by Penplusbytes (PPB – www.penplusbytes.org) with the vision of providing a one stop online information and knowledge about Ghana’s oil and gas sector
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