The mirage of “Usable FX”: Why rent-seeking cannot replace resource custodianship

By Ben Brako

The recent analysis by Joe Jackson, CEO of Dalex Finance, regarding Ghana’s currency crisis provides an invaluable, data-driven autopsy of our national malaise. Jackson accurately diagnoses the “Anansi” trickery of our economic narrative: the comforting myth that our currency drops simply because “we import too much and export too little.” By exposing the reality of structural leakage — where, according to Bank of Ghana balance-of-payments data, an estimated 54% of gold revenue and 65% of oil revenue leave the country before touching the local economy — Jackson hits a critical nerve.

However, the recent defensive press statement by the Ghana Chamber of Mines reveals a deeper ideological impasse. The Chamber dismisses critiques by pointing to standard concessionary frameworks, asserting that the state retains “in excess of 60 per cent of mining sector rents” through corporate taxes, royalties, and its 10% free-carried interest.

This counter-argument conflates accounting rents with real economic liquidity, creating a dangerous illusion of national benefit. When we interrogate the mechanics of this leakage alongside the broader bleeding of our financial and agricultural systems, we arrive at an uncomfortable but necessary conclusion: if the state’s regulatory framework and domestic capacity can only safeguard a minority fraction of our actual resource value, then the most patriotic and economically sound act is to enforce a strategic pause on new extraction licences until the institutional conditions for full value retention are in place.

The Illusion of “60% Rent” vs. The Reality of Gross Leakage

To understand why the Chamber of Mines’ defence is a mathematical sleight of hand, one must distinguish between “mineral rents” and gross export value. Mineral rent is merely the profit left over after an extraction company has deducted its massive operational costs. The true bleeding of Ghana’s economy happens before rent is ever calculated.

It happens through service imports — the single largest hole in our economic bucket — where Ghana’s balance-of-payments accounts record billions of dollars flowing annually to foreign technical firms, consultants, and equipment suppliers.

When a foreign corporation extracts $100 worth of Ghanaian gold, the fact that the state taxes 60% of their net profit is cold comfort when the majority of that original $100 has already left the domestic liquidity pool to pay for foreign engineering, overseas management fees, and imported machinery. We are left with the hollow legal ownership of an empty box, while the liquid wealth that enables the extraction floats away.

To illustrate: if foreign service costs consume two-thirds of gross export value before net profit is calculated, then the state’s “60% of rents” may represent as little as 13 to 15 cents of every dollar of gold that leaves our soil. The Chamber’s figure is not inaccurate — it is simply measuring the wrong thing.

Dismantling the Historical Threat of State Failure

The Chamber warns that questioning the private-capital model is a recipe for returning to the collapsed state-dominance era of the 1970s and 1980s, which culminated in the 1983 IMF structural adjustment. This narrative presents a false binary: either we tolerate the current leakage arrangements, or we return to inefficient, corrupt state-run corporations.

The Custodianship Model rejects both extremes. Critically, it is also distinct from the Institute of Economic Affairs’ proposal to nationalise the Tarkwa Mine. That proposal substitutes one operator for another.

The Custodianship Model asks a prior and more fundamental question: are any current terms — state or private — structured to retain the majority of gross value domestically? Where the answer is no, the rational response is to pause new licensing and renegotiate existing terms, not simply change ownership.

The alternative to immediate exploitation under unfavourable terms is not mismanaged state extraction but strategic patience. Unlike fiat currency, gold, oil, and transition minerals like lithium are finite, non-perishable assets.

They will not rot. If our domestic institutions currently lack the sophistication to retain their gross value, the most rational economic decision is to leave them unmined and use that time to build an indigenous class of engineers, local capital structures, and domestic processing capacity.

Botswana is frequently cited as a counterpoint to this argument. It is instructive precisely because it proves the thesis. Botswana did not simply open its diamonds to passive foreign capital.

It renegotiated terms with De Beers repeatedly over decades, built Debswana as a genuine 50-50 partnership, established the Diamond Trading Company in Gaborone to capture downstream processing value, and invested resource revenues into domestic institutions through the Pula Fund. The lesson from Botswana is not “private capital works.” It is: negotiate hard, build capacity first, and capture value at every stage of the chain. Ghana has not yet done this.

The Fiduciary Trust: Intergenerational Custodianship

This argument is anchored not just in economics, but in the traditional jurisprudence of resource ownership that predates the colonial state. In Akan customary law, the land does not belong to any sitting political administration.

It belongs to a transcendent trust composed of the ancestors, the few who are living, and the “countless hosts yet unborn.” Ghana’s own Minerals and Mining Act (Act 703) reflects this precisely: it vests all minerals in the President in trust for the people of Ghana — not as owner, but as custodian. The Chamber itself cited this Act in its own press statement. We are simply asking that its custodial language be taken seriously.

A transient government operating on a four-year political cycle has no moral or legal right to permanently liquidate non-renewable wealth to patch over temporary fiscal deficits. We must acknowledge the intense poverty pressures facing Ghana today — they are real and urgent.

However, burning our generational inheritance to fund temporary consumption is a breach of fiduciary duty. It is the equivalent of eating the seed of tomorrow’s harvest to satisfy the hunger of an afternoon.

Survival Without New Extraction: Turning Off the Import Tap

Critics will ask the necessary question: how does a nation survive a strategic pause on new extraction without plunging deeper into fiscal crisis? This deserves a substantive answer, not a rhetorical deflection.

First, a pause on new licences is not an overnight halt to all extraction. Existing operations under existing contracts continue while terms are reviewed and renegotiated. The fiscal bridge is existing production revenue — not zero.

Second, the more productive national focus is on stopping import bleeding, not chasing export dollars. Ghana Statistical Service trade data shows rice, sugar, and poultry alone account for hundreds of millions of dollars in annual import expenditure — on staples we have the land, climate, and labour to produce domestically.

A dollar saved by feeding ourselves with locally grown and processed rice stays entirely within the domestic economy, circulating from the farmer to the mill to the local bank. This creates sustainable domestic multiplier effects that the “jobless growth” of foreign-dominated extraction enclaves never delivers.

Third, a dedicated Agricultural Transformation Fund — seeded by renegotiated extraction terms during any transition period — can finance the irrigation, processing, and cold-chain infrastructure that makes import substitution achievable at scale within a decade.

Plugging the Financial and Insurance Conduits

The leaky bucket extends far beyond the mining pits; it is hardcoded into our financial architecture. Three targeted reforms can plug significant conduits immediately.

Banking sector reform. We must disincentivise the seamless repatriation of profits by foreign-owned commercial banks. Redirecting regulatory support toward indigenous banks ensures that interest and capital generated within Ghana remain in the domestic credit loop to fund local manufacturing and agriculture.

Domesticating high-value insurance. Significant sums leave our shores as offshore insurance and reinsurance premiums for the high-end risks of the petroleum and mining industries. Mandating that these risks be underwritten by local consortia would immediately build domestic financial capacity and retain vital foreign exchange.

Enforcing foreign exchange repatriation. The state must aggressively deploy the Foreign Exchange Act to ensure that all export proceeds are repatriated through local banks within the statutory window, stopping the capital flight that keeps our treasury perpetually vulnerable.

Confronting the Technology Transition Risk

A sophisticated critique of strategic patience is the danger of technological disruption. If we leave lithium untouched for two decades, changes in global battery chemistry could render it less valuable. This is a legitimate concern — and it requires strategic awareness, not a stampede to sell cheaply.

The response is continuous market intelligence: monitoring global commodity trajectories, building in extraction triggers tied to value-retention thresholds, and ensuring that any decision to extract is conditioned on domestic processing capacity being in place.

Where genuine obsolescence risk exists, extraction may proceed — but only under deal structures that capture the majority of processing value domestically. We must reject the capitalist urgency that compels us to hand over resources to the first foreign bidder under the pretence of “market readiness.”

Conclusion: Custodianship over Consumption

The Ghana Chamber of Mines defends a status quo that treats policy certainty and investor security as the ultimate goals of governance. But the ultimate goal of a sovereign state is the welfare of its citizens and the preservation of their future.

Joe Jackson’s breakdown has accurately shown us the holes in the bucket. The response cannot be to tweak local content laws while the bucket continues to pour wealth into foreign financial centres. The ultimate reframing must shift our national debate from “How do we earn more foreign exchange?” to “Why are we liquidating our wealth so cheaply?”

Let the gold stay in the rocks and the oil beneath the seabed — but let us be precise. We are not calling for the abandonment of the sector. We are calling for a moratorium on new licensing until we have the structural discipline to block the financial leaks, the local capacity to underwrite the risks, and the technical competence to mine with our own hands under terms that keep the majority of value at home.

True sovereignty is found not in the volume of what we sell, but in the value of what we keep.

Ben  is a Musician and cultural thinker.

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