Ghana’s Gold Pivot: Scrapping VAT on Exploration to Keep Its Mining Crown
- Derry Thornalley
- 51 minutes ago
- 5 min read
When Ghana’s finance minister, Cassiel Ato Forson, stood up to present the 2026 budget, one line cut through the usual noise of deficits and debt targets: after 25 years, the government would abolish the 15% VAT on mineral exploration and reconnaissance.
For most Ghanaians, it sounded technical. For the mining industry, it was seismic.
For a quarter of a century, companies prospecting for gold and other minerals have paid VAT on high-risk, upfront spending – drilling, assaying, geological surveys – long before a single ounce of gold is produced. Industry groups, led by the Ghana Chamber of Mines, have argued that the levy pushed investors toward neighbours like Côte d’Ivoire and Burkina Faso, where early-stage exploration is VAT-exempt.
“Exploration is the lifeblood of mining,” one Accra-based analyst puts it. “Taxing it is like taxing research and development – you don’t feel it today, but you are starving yourself of future projects.”
The new policy, confirmed in recent statements and industry briefings, removes that VAT burden entirely in a bid to revive greenfield exploration and keep Ghana ahead in the race for capital.
A gold boom in full swing
The timing is no accident. Ghana is already riding a powerful gold wave.
After a record year in 2024, gold production is projected to rise again in 2025 to about 5.1 million ounces, cementing Ghana’s position as Africa’s top gold producer. New large-scale operations – including expansions by Newmont and the ramp-up of Namdini – are adding to output, even as some older mines mature.
Beneath those headline numbers, something more dramatic is happening: small-scale and artisanal miners have surged to the front of the export league table.
In the first half of 2025, small-scale gold exports reached around 51.5 tonnes, worth roughly US$5 billion, nearly double the volume a year earlier.
By mid-October, new data from the Ghana Gold Board (GoldBod) showed small-scale exports had generated over US$8 billion in FX earnings in just over nine months.
For the first time in Ghana’s history, officials confirmed, the small-scale sector has overtaken the large-scale mines in export volumes.
On the macro side, the boom is doing exactly what the IMF hoped when it approved a US$3 billion Extended Credit Facility in 2023. Gold, alongside cocoa, has driven a sharp turnaround in Ghana’s external accounts: trade surpluses have widened, reserves are rebuilding and the cedi has firmed.I
Recent IMF reviews describe growth gaining momentum, single-digit inflation returning for the first time since 2021, and investor confidence slowly recovering – albeit from a low base after the country’s domestic debt restructuring.
Cleaning up a messy boom
The government’s tax move is not just about volume; it is also an attempt to reshape who benefits and how.
Early in 2025, Ghana created the Ghana Gold Board (GoldBod) to centralise purchases from small-scale miners, curb smuggling and capture more export proceeds through official channels. New rules ban foreigners from trading artisanal gold directly, making GoldBod the only legal buyer, seller and exporter for licensed small-scale operations.
President John Mahama has since launched a dedicated GoldBod Task Force to crack down on illegal mining – “galamsey” – which has scarred farmland, polluted rivers and cost the state an estimated US$2 billion a year in lost taxes.
Taken together, these reforms are meant to do three things:
Channel more gold through legal, taxable routes, boosting FX reserves and tax revenue;
Reduce environmental damage by bringing miners under closer supervision;
Create a more predictable framework that can attract long-term exploration and development capital.
Scrapping VAT on exploration is the latest piece of that puzzle: once enforcement tightens at the small-scale end, the state needs a stronger pipeline of professional, large-scale projects to keep output – and revenues – up in the 2030s and beyond.
A bet on competitiveness – and on discipline
There are clear risks.
Ghana is still under an IMF programme after its debt crisis, and the Fund has been explicit about the need to keep fiscal discipline and avoid backsliding on reforms after the 2024 election cycle. Removing VAT on exploration means forgoing some revenue today, in the hope of higher investment and exports tomorrow.
It also raises familiar questions about environmental oversight. Critics point out that even legal mining has a heavy footprint; if Ghana becomes significantly more attractive relative to neighbours, it must ensure regulators, communities and courts can keep up with a likely rise in project applications.
Still, in a world of footloose mining capital, doing nothing was becoming a risk of its own. The 15% VAT had long been cited in industry surveys as a structural disadvantage, especially when other West African hubs offer more generous terms at the exploration phase.
Where Verī Platform fits in Ghana’s mining and investment story
For Ghanaian and regional investors, this policy shift doesn’t just change the fiscal calculus; it reshapes the opportunity set.
Pension funds, insurance companies, asset managers and banks now face a mining sector where:
New exploration projects may come to market in greater numbers;
Established names – from major gold houses to mid-tier producers – are repositioning;
GoldBod-linked reforms are formalising what used to sit in the shadows.
Verī Platform sits behind regulated institutions and gives them a single, controlled environment to:
Access listed mining companies, resource funds and related infrastructure plays in Ghana, across Africa and globally;
Blend those exposures with broader portfolios – from government bonds and money markets to diversified equity and multi-asset strategies – in one architecture;
Maintain custody-agnostic, look-through reporting, so that investment committees and regulators can see exactly how much risk is tied to gold, to Ghana, and to any single issuer.
For a Ghanaian pension fund or bank treasury, that could mean:
Holding core positions in domestic bonds and local blue chips;
Adding measured exposure to Ghanaian and pan-African gold producers, or even to global mining ETFs;
Monitoring all of it through a single platform that reconciles daily with multiple custodians.
In a sector where fortunes can swing with a commodity cycle, that sort of transparency and diversification is vital.
The next chapter in Ghana’s gold story
Ghana’s decision to scrap VAT on mineral exploration is more than a technical tax tweak. It is a statement of intent: to stay competitive as a gold powerhouse while trying to bring order to a chaotic boom.
If the bet pays off, the country could lock in a new wave of responsible exploration, broaden the base of formal mining activity, and strengthen the macro turnaround already visible in IMF data. If it doesn’t – if governance falters or environmental and social costs mount – the gains of the current gold rush could prove short-lived.
For now, though, Accra has thrown down a clear marker to investors: Ghana wants their exploration dollars, and it is willing to change the rules to get them. The challenge will be making sure that, this time, the benefits run deeper than the headline export numbers.
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