Professor Godfred Bokpin, an economist specializing in resource economics, has delivered a stark warning regarding Ghana’s reliance on gold as the cornerstone of its economic model. He argues that this strategy, while generating substantial wealth, poses a significant and potentially irreversible threat to Ghana’s long-term stability and survival, emphasizing the dangers of prioritizing short-term gains over sustainable practices.
Speaking on the Joy FM Super Morning Show on Monday, August 24, Bokpin highlighted a growing concern about the environmental consequences of unregulated gold mining practices. He points to the ‘Gold Board’’s influence as a factor contributing to the escalating damage, suggesting that the focus on macroeconomic stability – and the benefits derived from gold – has obscured this critical issue.
Bokpin contends that the current economic gains are susceptible to dramatic reversals should international gold prices fall sharply, placing Ghana at risk of another major economic crisis. He specifically warns that ‘if gold price today should dip by more than 40%, this macroeconomic stability we talk about will only exist in the textbook. What kind of gain is that?’
He asserts that Ghana’s current economic model, heavily dependent on gold, is fundamentally unsustainable. Bokpin contends that the focus on gold extraction and export has been consistently underestimated, particularly concerning the environmental and social costs associated with mining.
He calls for a fundamental shift in approach, urging policymakers to adopt a rigorous sensitivity analysis and stress testing regime, rather than assuming sustained gains. He urged a value chain approach that meticulously accounts for the environmental subsidy and ecological integrity destroyed by gold production.
‘Literally every 10 years, prices of commodities correct from a bust, from a boom; they correct almost every 10 years,’ Bokpin stated, emphasizing the repeated cycles of commodity price fluctuations. He emphasizes that the current model is a risky gamble, a ‘selfish position’ to cause such harm to the environment and water bodies, believing that it is a failure of leadership.
Bokpin advocates for a move away from a model that prioritizes gold extraction over sustainable development, warning that Ghana’s economic model must be radically reconsidered. He describes it as a ‘selfish position’ to think that one can cause such harm to the environment and water bodies in the name of macroeconomic stability, and say that it has gained.
He pointed out that Malaysia, a country that successfully transitioned away from a primary commodity-driven economy, provides a compelling example. Malaysia, before the 70s, was driven by copper and tin, and it is where they are today.
Bokpin cautioned that Ghana must move beyond immediate economic gains and pursue a development strategy that promotes sustainable prosperity without inflicting further environmental damage. He believes Ghana needs to focus on creating a value chain approach that recognizes the environmental cost of gold production, particularly the destruction of water bodies and ecosystems.
‘Is this macroeconomic stability compared to a life?’ he asked, highlighting that if one person dies today due to irresponsible mining, Ghana has destroyed the water bodies. Is this macroeconomic stability or gain compared to a life?’
Bokpin underscored the criticism that GDP can sometimes conceal the social and environmental costs of economic activity. He noted that while mining contributes to GDP, the environmental destruction and social costs associated with the activity are not adequately reflected in the measure. He said that GDP can be misleading if not accounted for.
He referred to Ghana’s Gross Domestic Product (GDP) as inadequate in capturing the full extent of the environmental damage caused by irresponsible mining.
Professor Bokpin warned that Ghana’s human cost of irresponsible mining should not be dismissed in the pursuit of economic indicators. He said that if one person dies today because of irresponsible mining, we have destroyed the water bodies. Is this macroeconomic stability or gain compared to a life?’
He urged Ghana to similarly look beyond immediate economic gains and pursue a development strategy capable of creating sustainable prosperity without destroying the country’s natural resources. He said that Ghana must adopt a value chain approach that properly captures the environmental cost of gold production, particularly the destruction of water bodies and ecosystems.
’It’s a selfish position to think that you can cause such harm to the environment and water bodies in the name of macroeconomic stability, and say you have gained,’ he said.
Professor Bokpin also questioned whether Ghana’s GDP adequately captures the damage caused by economic activities such as irresponsible mining. He pointed out that while mining contributes to GDP, the environmental destruction and social costs associated with the activity are not adequately reflected in the measure.
He said that if one person dies today due to irresponsible mining, Ghana has destroyed the water bodies. Is this macroeconomic stability or gain compared to a life?’
Professor Bokpin concluded by stating that Ghana must similarly look beyond immediate economic gains and pursue a development strategy capable of creating sustainable prosperity without inflicting further environmental damage. He said that Ghana must adopt a value chain approach that properly captures the environmental cost of gold production, particularly the destruction of water bodies and ecosystems. He concluded by warning that the human cost of irresponsible mining should not be dismissed in the pursuit of economic indicators.
“We are not better off.” he asserted. He described the decision to tolerate severe environmental damage in pursuit of economic stability as selfish and a failure of leadership.
“It’s a selfish position to think that you can cause such harm to the environment and water bodies in the name of macroeconomic stability, and say you have gained,” he said.
Professor Bokpin urged Ghana to reconsider an economic model heavily dependent on the extraction and export of primary commodities, particularly where such activities come with high environmental costs.
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Source: MyJoyOnline
