The wealth and woes of Ghana’s small-scale mining economy: contemporary issues

Abstract The study provides an in-depth analysis of the role and contributions of Ghana’s artisanal and small-scale mining (ASM) sector to national economic development. It argues that the ASM sector has evolved into a critical driver of inclusive economic growth and a vital source of livelihood for local populations. Accounting for approximately 40% of national gold production, the sector contributes substantially to foreign exchange earnings while generating millions of direct and indirect employment opportunities. Despite these positive contributions, the sector is also characterized by significant governance and environmental challenges. Substantial revenue losses occur through smuggling and illicit gold trading, depriving the government of essential resources required to finance public services and infrastructure development. Moreover, escalating environmental degradation, particularly the widespread pollution of water bodies remains an acute and persistent concern. This has increased the cost of water treatment by nearly sixfold in mining-affected areas and imposed additional social and health-related burdens on local communities. The study concludes that while Ghana may not conform to the classical characterization of a resource-curse economy, the dual challenges of illicit gold trading and environmental degradation significantly diminish the contributions of the ASM sector to national economic development. This underscores the need for effective regulatory enforcement and strengthened environmental governance to curb financial leakages and mitigate the ecological and social consequences associated with the sector.