Blazing the Path to Formalization, Ghana

Countries

Ghana

Focus Area

Inclusive Growth and Community Engagement

Status

Completed

Contact

Info

sustainable development goals

Budget

$189,860 CAD

Funders

Global Affairs Canada

Who Benefits

Direct and immediate beneficiaries
Ghana Minerals Commission
Small-scale miners
Mining communities in Ghana

Delivery Partners

University of Mining and Technology, Twarka
Diamond Development Initiative (DDI)

The Challenge

Despite high levels of risk, the artisanal and small-scale mining (ASM) sector provides important informal livelihoods to millions of people. However, these gains often come at a cost. Many newcomers to the sector are exploited by buyers and middlemen and become trapped in a cycle of borrowing and indebtedness. There is little official recognition of this exploitation and little done to break the cycle. It has been argued that formalization of ASM is the key to empowering unregistered miners and making the sector more sustainable.

Project Details

This project’s goal was to deepen the understanding of formal and informal financial flows in ASM communities. By recording and analyzing detailed financial dairies for 36 mining households in rural Ghana, the study exposed how formal and informal financial relations affect the livelihoods and well-being of poor individuals in Sub-Saharan Africa. The research was shared with government officials to inform formalization and micro-financing models.

Cross-cutting Themes

Gender

  • Research has shown that women make up a larger portion of the ASM sector in Africa than on most other continents. The World Bank (2015) estimated that in Ghana, the ASM workforce is more than 50% women. Financial diary researchers trained to ensure data collection from interviewees is stratified by age and gender, that there is sufficient gender representation during data collection and mapping of financial flows. This is critical to ensure women are sufficiently represented and have a stronger voice during data collection for decision-making. Both men and women were included in the survey and data was gender-disaggregated. The unique roles of vulnerable groups in ASM financial flows were investigated, in order to allow the analysis of gendered trends. Financial policy recommendations include consideration of the differential needs of each gender.

Environment

  • The environmental impact of this research was indirect. Financial flow data included the purchase of mercury and other processing chemicals, mercury-gold countertrade, the sale of concentrate or amalgams, etc. The collection and analysis of this data allowed for environment-related conclusions to be drawn. Understanding these metrics will allow environmental-safeguarding recommendations to be made.

Governance

  • The Ghana Minerals Commission (GMC) is the chief ASM policy-making body in Ghana. The project informed the GMC’s development of services and policy for ASM formalization. Financial data flow was anticipated to give an indication of any illicit or exploitative financial practices to provide insight into the governance and formalization of the sector.

Project results

  • University of Mining and Technology (UMAT) researchers have been trained in the financial diary method and the target and mining households have been identified.
  • Detailed financial field data has been collected on 36 miners/mining households in rural Ghana (12 each from Kobriso, Japa and Noyem). The data was collected at the household level and therefore included individuals who played different roles across the ASM value chain.
  • The principal researchers conducted engagement workshops in February 2017 in each community to help strengthen people’s understanding of the research.
  • Hosted a workshop at the University of Surrey, England in July 2018. Participants included two Ghanaian representatives from the mining communities where the research for this project was conducted and two Ghanaian government officials, alongside international ASM experts. The workshop facilitated the early presentation of the financial diaries data analysis, with participants contributing to this analysis through workshop discussions.

Project Impact

This project improved understanding of the formal and informal financial relations and flows in a typical ASM community. This allowed:

  • Inform improvements to financial extension services for ASM stakeholders.
  • Improve decision-making regarding ASM formalization processes.
  • Enable informed consideration of the needs of impoverished ASM families in the development of poverty alleviation measures.
  • Inform international policy engagement on improved financial mechanisms for ASM.

project team

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