PSIA of Ghana Mining Sector Policies related to Artisanal and Small-Scale Mining
In recent years, the Artisanal and Small Scale Mining (ASM) sector has experienced rapid growth worldwide. In the case of sub-Saharan Africa, it is largely a poverty-driven activity, absorbing scores of public sectors made redundant under Structural Adjustment and countless more smallholder farmers struggling to survive in a liberalized agricultural market. The increasing prices of commodities such as gold and gemstones, in combination with low barriers to entry, makes ASM an attractive alternative source of employment for people from all segments of African society. Like most informal sector activities in the developing world, ASM is now an indispensible source of income and employment for a significant share of the labour market, and has provided a ladder out of poverty for hundreds of thousands of families. Large-scale, industrial mining is now Ghana’s most important industry. It contributes approximately 12% of government revenue, 7% of total corporate earnings and 41% of total export earnings. In recent years, there has been an increase in gold production in particular (3.13 million ounces in 2009), in response to the spike in the gold price, which is now in the range of US$1,500/ounce. With this boom in activity have come increased expectations from the population, mining communities, and civil society for large-scale activity to contribute more to poverty reduction. The World Bank plans to extend support to the three sectors (forestry, mining, and environment) through a second DPO (NREG II). This operation would build on progress made during NREG I, but with a deeper focus on demand-side governance and social related issues in the mining sector, including both formal and informal small scale mining. The proposed Poverty and Social Impact Analysis (PSIA) to be undertaken by OPM will focus on ASM policies and institutions and help inform new policies and practices in the sector. It will feed into project preparation of NREG II and other on-going activities.