Ghana overhauls its mining sector, set to scrap mineral exploration tax

Ghana is moving to reset its mining investment landscape, with the government announcing plans to scrap the long-standing mineral exploration tax as part of a broader sector-wide overhaul.

The decision, announced during the 2026 budget presentation by Finance Minister Cassiel Ato Forson, marks the first significant rollback of the levy since its introduction 25 years ago as part of broader fiscal reforms.

The current 15% VAT applies to early-stage exploration costs such as drilling, sampling and assay work, which are already high-risk expenses and capital-intensive. Industry players, including the Ghana Chamber of Mines, have long argued that the tax has discouraged greenfield investment by inflating start-up costs for exploration companies.

Forson told parliament that eliminating the VAT is expected to “revive investor confidence, stimulate greenfield activity, and ensure the long-term sustainability of the country’s mining sector.”

According to the minister, the policy change also forms part of a broader review of Ghana’s VAT regime aimed at formalising exploration work and curbing unregulated prospecting, which has contributed to deforestation and pollution of waterways in recent years.

The policy shift comes at a time when Ghana’s gold sector is experiencing notable momentum, particularly within small-scale operations.

According to Reuters, exports from artisanal and small-scale miners between January and October reached 81.7 metric tons valued at about US$8.1 billion, overtaking large-scale gold shipments of 74.1 tons worth US$6.6 billion for the first time.

With Ghana targeting a total production of 144.5 tons in 2025, analysts say the scrapping of VAT on exploration is expected to support government efforts to formalise the artisanal segment and strengthen oversight of export channels, Forson noted.

Industry players have broadly welcomed the move. Michael Akafia, president of the Ghana Chamber of Mines, told Reuters that the now-abolished tax had “negatively affected our competitiveness as a mining jurisdiction and was a clog on the pipeline of projects.”

Removing the levy, he said, should stimulate new exploration, attract foreign capital and reinforce Ghana’s standing as one of the world’s top gold-producing economies.

The move is expected to reinforce Ghana’s position as Africa’s leading gold producer and one of the continent’s most attractive destinations for mineral exploration.

By lowering entry barriers, the government hopes to unlock fresh discoveries, expand reserves and strengthen the country’s long-term production outlook.

Countries such as Zimbabwe, the Democratic Republic of Congo and Mali have introduced policies that either increase state participation in mining projects or tighten local-content requirements.

While these measures are designed to maximise national benefit and retain more value domestically, they have at times raised concerns among investors wary of shifting regulatory landscapes.

Ghana, by contrast, is sending a clear investment-friendly signal, prioritising exploration growth and long-term sector stability.