Ghana lost US$50 billion between 1970 and 2021 through capital flight, a study by the National Development Planning Commission (NDPC) and the University of Massachusetts has found.
Capital flight is a large-scale movement of financial assets and capital from a nation.
The study, titled: “Capital flight and natural resources in Ghana: the cases of gold and cocoa” found that private wealth in Ghana is growing faster than per capita income, with individuals in the country owning $5 billion in private wealth.
Data from government sources and the United Nations statistical databases analysed by the team showed that the growth rate in private wealth in Ghana is the highest in Africa in the last 10 years (27.5%).
There are 110 multimillionaires in Ghana who own more than $10 million in private wealth each, the researchers also found.
The study was conducted by Professor Léonce Ndikumana, from the University of Massachusetts, United States; Dr William Godfred Cantah, University of Cape Coast, Ghana, and Dr Kwame Adjei-Mantey, University of Environment and Sustainable Development, Ghana.
The researchers, under the auspices, of the NDPC disseminated the findings of the study at a workshop in Accra on Thursday (26 October).
Professor Ndikumana said the study found that although Ghana had seen an increment in exports, natural resources (gold, oil, and cocoa) dominate the exports, adding that foreign exchange earnings are repatriated.
He said available data indicate that in 2021, cocoa, gold, and oil, accounted for 81% of Ghana’s total exports, “but the exports are not earning forex.”
Ndikumana said in the gold sector for instance, foreign companies were allowed to retain as much as 95% of their export earnings, a situation he pointed out, had a severe impact on the stability of the local currency.
In the cocoa sector, the researchers found farmers earned 4% of the price of the product, with a chunk of the money going to distributors and processors.
Ndikumana said capital flight had taken an upward trend in Africa and cautioned that the continent would continue to see a decline in economic growth if it failed to take control of its natural resources.
“If we are going to auction our resources to foreign companies all the time, it will not work. You must take control of your own resources…policy decisions should be done democratically; the citizens should have a say in how resources are managed,” he said.
Prof George Gyan-Baffour, chairman of the NDPC, said the repatriation of foreign exchange earnings “is at the heart of the problems we are facing” due to the negative impact it has on the strength of the local currency.
“This is a phenomenon that has become a major constraint to the under-development of most African countries and requires a concerted effort to significantly overcome its impact on our economy,” he said.
Dr Said Boakye, the acting executive director of the Institute for Fiscal Studies, urged the government to employ production-sharing agreements to achieve significant revenue from the mining sector.