Analyst Amanda Clinton Explains Why Global Powers Are Pressuring Ghana Over Gold Royalty Hikes

• Amanda Clinton analyses the potential impacts and prospects of the expected increase in Ghana's gold royalty scale after some pushback from international players

Lawyer and industry expert Amanda Clinton has underscored the importance of the government enforcing Ghana's sovereignty after concerns were raised about gold royalty hikes.

While the increase in royalties portends monetary gains for Ghana, Clinton, an industry insider, told YEN.com.gh that downstream sovereignty matters more to the country for development.

She noted that sovereign gold reserve accumulation, if done gradually and transparently, would reinforce Ghana's long-term resilience.

"Refining must deepen beyond symbolic capacity. Domestic bullion storage should expand. Local industrial gold use should become policy, not aspiration. Regional trading platforms can strengthen pricing autonomy over time."

Early in March, Reuters reported that China, the US and other Western governments had mounted an unusually coordinated ​push to get Ghana to halt a gold royalty hike because of the negative effects on multinational mining companies.

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Ghana wants to replace its fixed 5% royalty with a sliding scale between 5% and 12% linked to bullion prices.

This is part of an effort to capture ​more revenue from gold's run to successive historic highs, with gold prices currently selling at over $5,000 per ounce.

Clinton believes this is a sign that people are thinking about controlling long-term mineral wealth.

The analyst also said Ghana needs to rise above basic resource nationalism by ensuring institutional predictability.

She noted that what investors fear more than higher royalty rates are sudden shifts in the rates.

However, Clinton explained that Ghana is doing something right in this regard.

"...Unlike many historical mineral disputes elsewhere on the continent, the current debate is occurring through law, consultation, parliamentary process, and fiscal design, not through decree. That institutional maturity is precisely why the country is unlikely to follow the darker trajectories often invoked in alarmist commentary."

Are Ghana's gold royalties under threat?

The concerns over the royalty hikes are coming within the context of the increased importance of gold because of geopolitical uncertainties.

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Clinton noted that Ghana’s effort to forge a more self-determined mineral future will naturally attract scrutiny.

However, she downplayed dramatic concerns that the country could face some political instability because of this in the form of coups.

She recalled that Africa’s history certainly provided examples where mineral wealth and political destabilisation became entangled.

However, she described Ghana as not as fragile as some countries that descended into political turmoil because of tension over extractives.

Clinton used Sierra Leone to convey this distinction.

"Sierra Leone’s diamond wars remain the most cited case, where weak institutions, external actors, armed conflict, and illicit extraction combined into a catastrophic cycle in which resource wealth fed instability rather than state development."

She described Ghana as one of West Africa’s most durable democracies, with a military tradition shaped less by factional extraction than by constitutional professionalism over recent decades.

Since the democratic consolidation period, no modern evidence suggests an externally engineered pathway capable of easily dislodging the state over fiscal mining policy alone.

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Clinton also explained that Ghana’s present path is notably more cautious than revolutionary rhetoric seen elsewhere in history, which has been accompanied by aggressive nationalisation.

"There is no formal abandonment of international monetary frameworks, no abrupt nationalisation wave, no declaration of anti-market rupture."

Recommendation to government on gold royalties scale

Clinton maintained that mining firms can tolerate higher taxation when rules are clear, gradual, and legally durable.

She suggested that the government could preserve the principle while refining the sliding royalty mechanism.

That would mean the royalty floor should remain at 5%, but upward movement should be triggered only by clearly defined international gold price bands with transparent review periods.

"Rather than a steep top range, Ghana could initially cap the upper rate lower and tie future increases to production profitability rather than gross revenue alone. This would protect state earnings during extraordinary price spikes while avoiding the perception of punitive extraction during ordinary market fluctuations," Clinton concluded.

Proofreading by Bruce Douglas, copy editor at YEN.com.gh.

Source: YEN.com.gh