From Nationalization to Liberalization: How Mining Sector Reforms Weakened Environmental Protection in Ghana

Abstract

Mining and environmental laws regulate environmental protection in the mining sector. Many governments of developing countries liberalized their mining sector in the 1980s to create enabling conditions to attract foreign investment into the mining sector. Although the mining sector liberalization policy revitalized Ghana’s economy, it paid less attention to environmental legislation. We assessed whether Ghana’s mining sector liberalization has deregulated the mining and environmental laws to attract FDI. The study used mixed-method that combines qualitative and quantitative methods. We rely on survey data from 384 respondents, 64 from each of six strata, and qualitative data from 41 interviewees and 42 focus group participants, six in each of seven groups. Descriptive statistics, such as percentages and cross-tabulation and inferential statistics, such as analysis of variance (ANOVA) and Spearman’s rank correlation analysis were used to analyze survey data. Qualitative data was analyzed using NVivo. Spearman’s rank correlation analysis results (r = 0.833 and p-value = 0.000) revealed that, a strong positive relationship exists between mining sector liberalization and weaknesses in the mining and environmental laws at a 99.9% confidence level.  This indicates that Ghana’s mining sector liberalization in the 1980s has led to deregulation and weakening of its mining and environmental laws. The country’s environmental standards have failed to include specifics to deal with the externalities of mining activities. Further, these laws do not included clauses to prohibit mining activities that are inimical to the environment. Many interviewees and focus group participants supported these views.