The Damang mine has finally been given to a wholly Ghanaian-owned company. This new decision by the Government of Ghana to award the Damang mine to Engineers and Planners (E&P) will make an explosive inside-out impact on the extractive industry in the country. The first entirely Ghana-owned company has replaced a multinational giant, Gold Fields, to operate a huge gold asset. Though the move is being hailed as a move towards indigenous entrepreneurship, it is also a litmus test of the principles of transparency, market competition, and rule of law.
Considering the free-market approach, the main aim of a resource governance system is the effective delivery of assets to the player, which is most likely to create value. E&P’s willful commitment to invest $505 million to meet the demands of the industry challenges aligns with the private sector’s mission of resolving the problems in the industry. True liberty of a market, however, is not measured in accordance with the nationality of the winner but rather by the fairness of the process.
The Price of Opacity
The attitude of the people in the past weeks has been extreme. The “Ghanaian can do it” story is being applauded by many; however, there is a huge concern in the background about the tender. NGOs and critics are also insisting that the ministry of lands and natural resources should issue all the legal and technical requirements to evaluate the competitive bids.
When information in the market is one-sided, it causes wrong decision-making in the market, leading to failure. In this regard, secret operations on the state in business deprive entrepreneurs of their genuine merits. And in a bid to make the deal of Damang a sustainable success, one has to cushion the deal against the perception of the favoritism of politics. Sincerity is the best policy to enact; therefore, low opacity is definitely the only way to turn a political win into a business success.
Competition as a Catalyst
The reality that Gold Fields’ lease was expiring provided a rare opportunity to experience the competitive business environment. This must not be compromised to any political links or the notion of having an incumbent so as to make Ghana truly grow a competitive industry in mining. Transparent system fixed on a merit-based framework ensures that:
1. There is effective use of capital: The most capable operator is the technical and financial efficiency of the state.
2. Public trust is held: Citizens can observe and participate in the use of the national assets to reap the maximum whereby the state will be accountable to even the least citizen.
3. Investments are Secured: Foreign and domestic investors feel secure to invest, knowing that the emergence of some certain rules means businesses will not still operate without friction and investments are secured.
The Damang agreement is a warning that, without openness, indigenization is a missed chance as we enter the Liberty Sphere and Ghanaian policy in the future. It is that freedom of the economy must have a level playing field so that the best businesses and ideas will succeed without the government nodding them. Only at that time will we be able to move away from a patronage-driven towards a wealth-driven economy.
Call To Action
- Transparency: Openness means pushing the ministry to share every evaluation of bids, lifting that hidden curtain once and for all.
- Meritocracy: The state should shift from favoritism to skill. We should offer opportunities to those who can do the work and not those we know.
- Institutional Reform: The emergence of a law on entrepreneurship could shift how businesses grow, diminshing favoritism, encouraging a fair market through real market forces instead of government picks. Rules that welcome competition might replace backroom advantages, letting local efforts rise on their own terms through transparent systems.
Conclusion
The Damang deal is an eye-opener that indigenization is a wasted opportunity when it is not transparent. Economic freedom must be achieved through a level playing field where the most suitable businesses and ideas can emerge without the need for government nods. In order to develop- appropriately -the extractive industry of Ghana, we need to shift the patronage-based economy to an open competition system and institutional integrity.
Article by
Nii Lamptey Klokpah
He holds a degree in Political Studies from the Kwame Nkrumah University of Science and Technology. With a deep interest in innovation, technology, agriculture, and philosophy, he is driven in a firm belief that Africa’s future must be shaped by its own people through inclusive, forward-thinking approach.
