Ghana's Golden Opportunity

Country: Ghana

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In 2006, Asutifi, a tiny district in central Ghana, changed forever. The relatively unknown farming community had caught the attention of one of the world’s largest gold producers, Newmont Mining Corporation. The company had discovered the mineral in the tiny district and began exploitation through its subsidiary, Newmont Gold Ghana Ltd (NGGL). Though the revenue Asutifi was to receive from Newmont was little compared to other districts, it made up a significant percentage of Asutifi’s income. Income from gold, however, is volatile and requires financial forecasting, realistic budgeting and participatory management, all of which were major challenges for Asutifi.

Three years later, Revenue Watch Institute (RWI) partnered with two Ghanaian organizations to create the Asutifi subnational project. Executed from 2009 to 2011, the project’s aim was to improve the governance of mining revenues. To achieve this goal, the project would improve local government’s policies and practices for collecting and using finite mining revenues effectively. It also would build civil society’s capacity to participate in, monitor and evaluate the sector’s governance processes. The project’s ultimate goal was to avert the curse of mismanagement often associated with extractive resources in developing countries.

The Asutifi project succeeded in building awareness, enhancing trust among stakeholders, and ensuring meaningful participation from citizens and community-based organizations in preparing the district’s development plan, a process that had been dominated by a few officials. The project also improved collaboration between Newmont’s voluntary corporate social responsibility activities and the priorities of the district assembly and administration.

Despite the project’s developments, its gains were limited, and no institutionalized systems and practices were put in place for effective governance and public accountability. Local politics, which should have been a democratizing factor, constrained public accountability. Traditional chiefs, who receive a substantial share of mining royalties, did not change much and continued to resist public accountability. The community’s demand for transparency remained weak.

The project’s successes and failures reflect the institutional strengths and weaknesses of its partners and indicate a degree of disparity between project intentions and capacities.