Mining And Development In Ghana: A Case Study Of The Mineral Development Fund In The Obuasi Municipal Assembly

ABSTRACT

Mining in Ghana is an important economic activity that can be traced back to the colonial times. Although it has contributed substantially to the national income purse, its benefits to the local populace have been of contestation because of the negative impact on the livelihoods of people who live close to mining areas. In order to mitigate the negative impacts of mining, an administrative fiat in 1992 created the Mineral Development Fund (MDF) as a way of redistributing part of mineral revenues to communities in close proximity with mining activities through the District Assemblies and Traditional Authorities. The aim of this study is to look at the factors that led to the establishment of the MDF, how the fund has been utilized by the Obuasi Municipal Assembly (OMA) and the chiefs, the challenges faced in the utilization of the fund and the extent to which chiefs and OMA can be held accountable in the utilization of mineral revenues. A qualitative approach was used for the study in which thirty (30) key actors were interviewed. The findings showed that OMA used its share of mineral revenues for general development purposes rather than focusing on mining affected communities while the chiefs used their share of mineral revenues for their personal activities. This has been fostered by unequal power relations in terms of access to information and influence in the decision making as well as institutional weakness in our governance system. The principal challenges that inhibit the effective use of the fund are fluctuations in mineral royalties, delays, absence of guidelines as to how to utilize mineral royalties and poor accountability mechanisms in the use of the fund.