After the general economy was devastated by the coronavirus pandemic biting hard each and every sector, all of them have shown encouraging signs of recovery – except for the mining and quarrying industry, which is still in a contraction mode.

Data published by the Ghana Statistical Service (GSS) have shown that the mining and quarrying sector contracted by 18.9 percent in the second quarter of 2021 – the highest to be recorded this year. This follows another contraction of 11.2 percent recorded in the previous quarter.

What makes it more disturbing is that since 2020 the Mining and Quarrying sector has never experienced growth – making it the only industry to record contraction for four consecutive quarters, as the other sectors have slowly emerged from the economic quagmire and started recording growth; signifying they are gradually recovering from the pandemic’s impact.

Prior to 2020, the last time the industry experienced any form of contraction was in 2016. But since then it has seen impressive figures, even recording 42.6 percent growth in the last quarter of 2017.

Commenting on what may have accounted for the sector’s poor performance, CEO of the Ghana Chamber of Mines, Sulemana Koney, explained in an interview with the B&FT that the small-scale mining industry has not been in good shape recently, as export figures have seen a significant reduction from what they used to be.

“We have been concerned with the trend. When you look at the mining industry now, the sector consists of both small and large-scale mining. In the last few years, small-scale mining has been such an important part of the industry that at a point in time it contributed about 35 percent of gold production. Our checks show that there has been a near-collapse in export from the small-scale mining sector, so this may largely account for the Mining sector’s poor performance.

“When we talk about small-scale mining in this country, generally, it is more about purchases and exporting than production. So, it may even happen that production has not gone down but exportation through official channels has gone down. What I am driving at is that, probably, production is going up and yet a lot of smuggling is happening.

“Unfortunately, when it comes to small-scale mining we don’t capture production but capture exportation. So if you are capturing what is exported and there is smuggling, it means the GDP will go down because we are using exportation as a proxy for production,” he said.

Besides the significant dip in exports that has led to the industry’s abysmal performance, as said by the CEO of Chamber of Mines, the ongoing fight against illegal mining – also known as galamsey – has had a terrible impact on the mining industry, as some of the perpetrators are working under the guise of being part of small-scale mining companies; thereby pushing government to halt all small-scale mining activities at some point.

Performance of economy in second quarter

A rebound of activities in the services sector, particularly growth in the hospitality industry, impacted positively on the economy; as gross domestic product recorded 3.9 percent in the second quarter of the year, the GSS report has shown.

According to the report, the Services sector claimed its position as the main driver the economy as it grew by 11 percent in the second quarter, nearly triple the rate it grew in the previous quarter – thereby restoring the economy into default-set mode, as the sector has cemented its position as the frontrunner of growth after the Agriculture sector took over briefly.

What’s even more refreshing is the fact that the hospitality sector, which contracted heavily over the past one year, has finally emerged out of the thick quagmire as it saw an impressive growth of 18.7 percent compared with 10.7 percent in the first quarter of the year. In fact, no sub-sector in Services saw any contraction at all in the second quarter.