• Government aims to repeal long-standing VAT on exploration to revive investor interest

• Move comes as Côte d’Ivoire and Guinea attract more exploration capital

• Gold remains key to Ghana’s economy, accounting for 57 % of exports in 2024

Ghana’s Finance Minister Cassiel Ato Forson announced late last week the government’s plan to abolish a 15 % value-added tax (VAT) applied to mining exploration expenses. The initiative could reposition the country in the race for gold exploration at a time when other West African states such as Côte d’Ivoire and Guinea are drawing increased attention from investors.

Strengthening Ghana’s mining competitiveness

In force for more than 25 years, the tax applies to investments related to sampling and drilling undertaken during exploration work. Its removal is expected “revive investor confidence, stimulate greenfield activity, and ensure the long-term sustainability of the country’s mining sector,” the minister said, according to Reuters.

Although Ghana remains Africa’s largest gold producer, it has recorded only a limited number of new mining projects in recent years. The former Gold Coast waited more than a decade to see a new gold mine enter production, with the Namdini project (Shandong Gold) launched in 2024. The Chamber of Mines has long raised concerns, arguing that the tax undermines the country’s competitiveness compared with other mining hubs.

“Most of the companies in that space are risk takers, but they are paying VAT on assay and drilling, which is the highest cost of exploration […]. We’re losing to Kenya and Côte d’Ivoire because of bad tax policy,” said Chamber of Mines CEO Ahmed Nantogmah earlier this year, according to local media.

The reference to Côte d’Ivoire is not accidental: the country’s gold sector has become increasingly attractive. According to Justin Tremain, CEO of Turaco Gold, Côte d’Ivoire is the “best place in the world” to build a gold mine. His company announced a $39 million fundraising this year to advance its Afema project, while other players such as Aurum Resources are also active.

Guinea is following a similar trend, benefiting from growing interest from mining companies. In May, Fortuna Mining said it would allocate part of its exploration budget to its Guinean assets, and a few months later Sanu Gold announced an $8.4 million financing package to support its work in the country. Perseus Mining, already active in Côte d’Ivoire and Ghana, is also investing in Guinea’s gold sector.

Supporting a key economic sector

Like Côte d’Ivoire and Guinea, Ghana’s push to attract new investment in the gold industry is driven by economic logic, given the metal’s significant contribution to public revenue. According to a report by the Bank of Ghana, gold accounted for 57 % of total exports in 2024, generating $11.6 billion. The plan to eliminate the exploration VAT also comes amid a prolonged increase in gold prices.

Trading at more than $4,000 per ounce on Tuesday, November 18, gold prices have risen by more than 50 % since the start of the year, outpacing the roughly 30 % annual increase recorded at the end of 2024. Despite these favorable market conditions, the success of Ghana’s plan is far from guaranteed.

There is still no certainty that removing the VAT will lead to renewed investment in exploration. Potential investors may consider other factors, particularly at a time when the country has announced the launch of a mining audit. This initiative will need to be closely monitored, given its potential sensitivity for the business climate.

In Mali, where authorities conducted an audit that ultimately resulted in new mining regulations in 2023, tensions arose between mining companies and the government. A dispute is ongoing between Bamako and Canadian company Barrick Mining, operator of the Loulo-Gounkoto gold mine, the country’s largest.