Chamber of Mines Disputes Joe Jackson’s ‘Retention Ratio’, Warns Against Misguided Policy Conclusions

The Ghana Chamber of Mines has strongly challenged key claims made by Joe Jackson in his presentation, “Ananse Stories about the Economy of Ghana,” cautioning that flawed assumptions and data inconsistencies could lead to misleading conclusions about the mining sector’s role in exchange rate pressures.

While commending Mr. Jackson for stimulating public debate on macroeconomic stability, the Chamber said aspects of his analysis—particularly the widely cited 46.2% “retention ratio”—are based on inconsistent comparisons that understate the sector’s true contribution to the domestic economy.

According to the Chamber, the retention ratio was calculated using US$5.5 billion in in-country expenditure by large-scale mining firms against US$11.9 billion in total mineral export earnings. However, it argued that the export figure reflects the entire mining sector, including both large- and small-scale operators, while the expenditure figure captures only activities of its member companies.

The Chamber further noted that the exclusion of small-scale mining—responsible for about 40% of Ghana’s gold exports in 2024—significantly distorts the analysis.

This results in a comparison between a total sector-wide export value and a partial measure of domestic expenditure, leading to a systematic understatement of the mining sector’s true economic contribution,” the Chamber stated.

“The omission of the small-scale mining sector… materially distorts the assessment of value retained within the sector,” it added.

The Chamber explained that even under simplified assumptions—such as treating in-country expenditure as a proxy for domestic value retained—the conclusion that less than half of mineral export value stays in Ghana does not hold when the small-scale sector is properly accounted for.

Any measure of retention that seeks to reflect sector-wide outcomes must incorporate both large-scale and small-scale mining activity on a consistent basis,” the statement emphasized.

It also highlighted broader methodological limitations, noting that both export and expenditure figures are aggregate measures that may include components not fully accruing to the local economy. As such, it recommended the use of “domestic value added” as a more accurate benchmark for assessing the sector’s real contribution.

The conclusion that the mining sector retains less than half of its export value… should be treated with caution,” the Chamber warned.

It further cautioned that policy decisions based on such interpretations risk failing to address the true drivers of exchange rate volatility.

Reaffirming its commitment to evidence-based dialogue, the Chamber called for more rigorous and consistent analysis to better inform policies aimed at stabilising the cedi and strengthening Ghana’s long-term economic resilience.