President John Dramani Mahama has called on African countries to ensure that indigenous companies play a central role in the mining and extractive sectors as part of efforts to drive economic transformation and sustainable development.

Speaking to Members of Parliament in Zambia on Thursday, 5 February, President Mahama said Africa must take greater control of its natural resources instead of allowing external speculators to reap disproportionate benefits.

“To achieve economic transformation, Africa must not be ashamed to leverage its comparative advantage in its natural resource endowment. Africa must exercise greater sovereignty over its natural resources if it is to create prosperity for its people. The era where we parcelled out large-scale concessions to speculators who then turned around and flipped them for huge profits must end,” he said.

He stressed that the continent already has the capacity to manage its resources locally and that indigenous companies must be empowered to participate fully in the extractive industries.

“We have the know-how, the technology, and capital are available, and indigenous companies must be encouraged to participate in the extractive and mining sectors,” he stated.

President Mahama underlined the importance of strengthening the local private sector to take leadership roles in key areas of the economy.

“We must support our indigenous private sector to capture the commanding heights of our economies. In Ghana, mining and the extractive sector play a significant role in our economy,” he explained.

He noted that Ghana, like Zambia and many other African countries, produces critical minerals such as gold, bauxite and manganese, yet adds little value to them locally.

“Like Zambia and other African countries, we are the source of critical minerals like gold, bauxite, and manganese. And yet very little value is added to these minerals locally. My country is changing that narrative,” he said.

Highlighting Ghana’s reforms in the gold sector, President Mahama pointed to the establishment of the Gold Board in April last year, which has sole authority to export gold from the country.

“Ghana established the Gold Board in April last year to take control of and regulate our gold exports. The Gold Board was given sole authority to export gold out of Ghana,” he said.

He revealed that since the Board’s establishment, exports from the artisanal and small-scale mining sector have risen significantly.

“Since the establishment of the Board, gold exports from the artisanal and small-scale mining sector have increased from 63 tonnes to 104 tonnes in 10 months. And the sweetest part of it is that these 104 tonnes have earned Ghana over $10 billion in forex inflows,” he added.

President Mahama also spoke about efforts to process minerals locally instead of exporting raw materials.

“The Gold Board has recently signed an agreement with a local gold refinery to refine about one tonne of gold every week, rather than exporting the raw doré gold. We aim to commence local processing of our manganese and bauxites as well, instead of exporting the raw ores,” he said.

On mineral royalties, he said Ghana has replaced the flat-rate system with a sliding-scale mechanism to better align revenues with global prices.

“We have also replaced the flat-rate royalty system for minerals with a sliding-scale system from 5% to 12%, depending on the international market price of the mineral,” he noted.

He further referenced continental efforts to mobilise Africa’s resources for development, citing the Global African Investment Summit launched in Dubai.

“In Dubai this week, I attended the launch of the Global African Investment Summit. This initiative is led by Akin Adesina, former president of the African Development Bank, and a few collaborators, who seek to find new ways to leverage the continent's natural resource endowment to raise more affordable financing to support Africa's economic transformation. This is an exciting initiative and has the potential to unlock enormous financial resources for Africa's development,” he said.

President Mahama also highlighted the need for Africa to reclaim control over its financial resources, noting that much of the continent’s foreign reserves are held abroad with little benefit.

“As the African Union Champion of African Financial Institutions, I am leading advocacy for the repatriation and investment of part of Africa's huge foreign reserves in African financial institutions. Most of our foreign reserves are by colonial constructs held in Western financial institutions and, in most cases, generate no interest,” he said.

He added that repatriating even a portion of these reserves could have a transformative impact.

“If 30% of all the foreign reserves of African countries were repatriated and invested in our own African financial institutions, such as the African Development Bank, it would create an immense pool of wealth that could drive rapid infrastructural and economic growth,” he stated.