Ghana Moves to Spur Mining Investment by Eliminating Exploration Tax

Ghana

In a bid to rekindle interest in one of the country’s most important industries, Ghana announced that it will abolish the value-added tax on mineral exploration and reconnaissance activities, a long-standing levy that officials and industry leaders say has hindered investment and diminished the nation’s competitiveness in global mining markets.

The 15% tax, imposed more than 25 years ago, applied to early-stage mining activities such as geological surveys, drilling and laboratory assays, increasing upfront costs for companies undertaking high-risk exploration work. Ghana’s Finance Minister, Cassiel Ato Forson, told Parliament that eliminating the tax was central to the government’s strategy to attract fresh capital and stimulate greenfield investment across the sector.

“Abolishing VAT will revive investor confidence, stimulate greenfield activity, and ensure the long-term sustainability of the country’s mining sector,” Mr. Forson said during his presentation of the 2026 national budget.

Ghana is the largest gold producer in Africa and a leading global exporter of the precious metal. But mining executives and analysts have long criticized the exploration tax as a deterrent to new discovery projects, especially when compared with neighboring countries such as Côte d’Ivoire, Burkina Faso and Kenya, which already exempt exploration from value-added tax.

Industry groups welcomed the change. The Ghana Chamber of Mines said the tax had eroded the country’s competitive position and that its removal should lower barriers for companies weighing entry into Ghana’s mineral-rich terrain. Chamber officials also highlighted the potential for increased exploration to sustain long-term output and diversify the range of minerals developed.

The reform comes against the backdrop of notable growth in smaller mining operations; government data show record volumes of gold exports from small-scale miners this year, underscoring the sector’s vitality even as large-scale investment has lagged.

Mining remains a cornerstone of Ghana’s economy, accounting for a significant share of export revenues and employment. Beyond gold, the sector includes deposits of bauxite and manganese, with many investors also watching for opportunities in critical minerals.

By eliminating the VAT on early exploration, Ghana aims to reset the calculus for mining firms weighing West African ventures, aligning policy with regional peers and signaling a more business-friendly environment. Whether the move will translate into actual investment in new projects, especially in deep-geological or nontraditional commodities, remains to be seen, but officials expressed confidence that the shift will broaden the pipeline of prospective ventures.