Estimating the Revenue Potential of the Quarry Subsector in Ghana

The quarrying industry is essential for the provision of raw materials for infrastructural development, employment, livelihood sustainment and government revenues. The contribution of the industry to revenue generation of the mining and quarry sector is however insignificant. A preliminary interrogation to determine the reason for minimal government revenues shows potential underreporting of production statistics. Further, efforts at the efficient administration of mining taxation and mineral production monitoring are generally skewed towards traditional minerals. These also have implications for governments to track production by companies engaged in the extraction of industrial minerals.

The quarry industry is insulated from the persistent risk of commodity price shocks on the global market. Optimising the industry has the potential to generate more stable revenue to support government budget implementation, which requires government action to both artisanal and commercial levels. This has triggered the need to examine the potential of the quarry industry in contributing to domestic revenue mobilisation, which is the focus of this study.

A sample of quarrying companies across five regions of Ghana was selected from a database of quarries operating in Ghana. To independently verify the production volumes of quarry aggregates from quarrying companies, truckloads of quarry aggregates directly sourced from the sampled quarries were used as proxies for production. The study also involved interviews with officials from the Ghana Revenue Authority to assess the challenges with revenue collection from the quarry industry.

The analysis showed that the potential of quarry companies for revenue generation far outweighs actual receipts reported by the revenue generation institutions and regulators. The difficulties in tracking production and revenues generated by quarries contribute to the potential understatement of production volumes which impact government revenues. The quarry industry remains a promising area for revenue mobilisation, where government’s increased efforts at monitoring and regulation of activities in the industry could translate into positive outcomes for host mining communities and the country at large. Based on the findings of the study, the following recommendations are made:

Post a comment

Your email address will not be published.