Fiscal Policy Reforms and Their Effects on the Economic Viability of Mineral Projects in Ghana

Peter Arroja Eshun


Mineral sector regulatory and fiscal policies in Ghana have undergone a lot of reforms over the past three decades in an effort to attract the much-needed Foreign Direct Investment (FDI) into the mineral sector and also to maximise the returns from the exploitation of mineral asset to the country. This paper puts in perspective the effect of changes in fiscal policies on the viability of mineral projects and assesses the general risk associated with investing in the mineral industry of Ghana, using the Sikaman Gold Mining (SGM) Project as a test case. Cash flow, sensitivity and risk analyses of the SGM Project under three fiscal regimes namely: PNDCL 153, Act 703, and amendments to Act 703, indicated the second regime as the most economically favourable as it gave the highest NPV and lowest risk. It is recommended that the government should involve the mineral industry players during such reviews to show all-inclusiveness. Furthermore, mineral investors are advised to explore stability and development agreements to protect their investments in the wake of changes in fiscal policies in the mineral industry of Ghana. Future research could consider comparing the current fiscal regime of Ghana with those of the competing countries within the Sub-Saharan African region to assess whether Ghana could continue to pride itself as a preferred investment destination within the sub-region.

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Copyright (c) 2018 Peter Arroja Eshun

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International Journal of Economics and Finance  ISSN  1916-971X (Print) ISSN  1916-9728 (Online)  Email:

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