Communities in mining areas continue to demand water, schools, clinics, roads and other basic amenities from mining companies, but the real problem lies much closer to home, according to policy analyst and natural resource governance advocate Dr. Steve Manteaw.
Speaking at a roundtable on illicit gold in Accra organized by UK based charity Spotlight on Corruption, Manteaw said many district assemblies are failing to use their share of mineral royalties for the development projects they were designed to support. This failure has created widespread confusion, leaving communities wrongly directing their frustrations at mining companies instead of their local authorities.
Manteaw is Co-Chair of the Ghana Extractive Industry Transparency Initiative (GHEITI), the country’s leading body on transparency in the mining and petroleum sectors.
The roundtable sought to consolidate recommendations for tackling illicit gold flows from Ghana. Participants from the media and civil society interrogated why the illicit gold trade continues to thrive despite government clampdowns, strengthened regulations and global scrutiny.
Manteaw explained that mining companies cannot be compelled to provide development projects beyond their legal obligations. Anything they do, be they boreholes, school blocks or community centres, is purely voluntary. Due to this misunderstanding, he said, communities often turn to companies first whenever there is no water, no school or poor sanitation.
They see the company as the local government, he said. Meanwhile, a share of mineral royalty called the Mineral Development Fund is being disbursed to the local government and they are misusing it.
The Mineral Development Fund was set up by the Minerals Development Fund Act, 2016 (Act 912) to provide financial resources for the direct benefit of mining communities, institutions responsible for the development of the mining sector, as well as traditional and local government. Under Ghana’s revenue distribution framework, 20 percent of mineral royalties are allocated to the MDF, while district assemblies also receive ground rent payments and 10 percent of mineral royalties directly through the Office of the Administrator of Stool Lands (OASL).
These funds constitute approximately 40 percent of some district assembly budgets in mining areas. For example, between 2006 and 2011, six district assemblies in the mining areas of the Ashanti Region received a total of roughly one million US dollars in royalties.
Manteaw offered a blunt assessment of how some assemblies in the Western Region use funds that are supposed to support community development. Instead of investing in water systems, health facilities, feeder roads or school infrastructure, some district assemblies spend their MDF allocations on funeral donations, canopy hiring, painting office buildings and garbage collection.
These funds are abused, he said. And when communities don’t get development, they go straight to the mining company. But the money is with the local authority.
Academic research has confirmed widespread mismanagement of the MDF across multiple mining districts. A study examining 211 projects in three selected districts found that factors affecting effective management included districts adding the fund to Internally Generated Funds, several discrepancies in royalty disbursements and district receipts, no technical risk assessment to identify the harmful effects of mining, low efficiency rates, project cost and time variations, misappropriation, misapplication and carrying out frivolous projects.
Another study focusing on the Obuasi Municipal Assembly found that the assembly used its share of mineral revenues for general development purposes rather than focusing on mining affected communities, while traditional chiefs used their share of mineral revenues for their personal activities. The principal challenges identified included fluctuations in mineral royalties, delays, absence of guidelines on how to utilize mineral royalties and poor accountability mechanisms.
Ghana Extractive Industry Transparency Initiative reports have consistently revealed that most Metropolitan, Municipal and District Assemblies use their share of mineral revenues for recurrent expenditures rather than development projects. The organization found that actual payments by OASL to district or municipal assemblies were often smaller than they should have been based on royalty payments, as regional offices did not always forward the full sum received from head office to districts and municipalities.
Public awareness of the MDF remains alarmingly low. A citizen engagement process in the Tarkwa Nsuaem Municipal Assembly found that about 70 percent of citizens engaged, including some notable personalities, had no knowledge of the existence of the fund, while about 80 percent lacked an understanding of the fund and its application. Most citizens are also not aware of infrastructural projects constructed in their communities using funds from mineral resources.
Manteaw urged civil society, the media and community leaders to guide citizens to hold the right institutions accountable. Let’s be clear, the local government is the recipient of the mineral royalty. Let’s direct the communities and tell them their money is with the assembly. Let them put it to good use.
For Manteaw, addressing illicit gold is inseparable from fixing governance failures at the local level. Mismanagement of mineral revenues not only erodes trust but also fuels resentment, leaving mining companies blamed for shortcomings that rightfully belong to district authorities.
His call was clear. Fixing Ghana’s mining governance requires turning the spotlight not only on illegal miners and smugglers but also on the public institutions entrusted with the resources meant to transform mining communities.
Ghana is the largest gold producer in Africa and the sixth largest worldwide. In 2024, gold represented 57 percent of the country’s merchandise exports, worth nearly 10 billion euros. However, this official figure is far from reality. The Swiss non governmental organization SWISSAID calculated that 229 tons of gold, worth nearly 10 billion euros, were smuggled out of Ghana between 2019 and 2023.
In 2022 alone, 60 tonnes of gold worth an estimated 1.2 billion US dollars were smuggled out of the country. The illicit gold trade is fueling serious organized crime, with stakeholders noting that proceeds from illegal mining have ended up in the hands of terrorist organizations operating in West Africa.
The government has launched several initiatives to combat illicit gold flows, including the establishment of the Ghana Gold Board (GoldBod), which oversees gold trade, tackles smuggling and promotes responsible sourcing. The UK Ghana Gold Programme is working closely with the Economic and Organised Crime Office to combat gold smuggling at key border points.
A Joint Action Plan signed in October 2025 by major stakeholders including the Bank of Ghana, Financial Intelligence Centre, Ghana Gold Board, Minerals Commission, Ministry of Lands and Natural Resources and law enforcement agencies sets out clear responsibilities, timelines and milestones for institutions involved in the gold value chain.
The move signals a coordinated effort to curb illicit financial flows in the extractive sector, especially artisanal and small scale mining, ahead of Ghana’s 2026 Financial Action Task Force Mutual Evaluation. Government officials have warned that Ghana cannot afford to be blacklisted, as the costs would be severe, including higher borrowing rates, reduced investment flows, pressure on the cedi and reputational damage.
