Poverty allevation how is it affected when withdrawals exceed injections in the economy?

Answer 1

Many have argued that the mining industry in Ghana has strong potential to generate taxes and related revenue and employment, substantial enough to provide significant economic benefits to the country and improved livelihood for the population. However, over-bloated tax concessions and incentives to investors in the mining sector leave little in the way of retained earnings for visible national development efforts. The situation is exacerbated by the growing exclusive use of surface mining technology by mines coming on-stream since the reforms. This has constrained employment opportunities in the sector. Indeed the controversy surrounding the appropriateness of government taxation of private business in general is an age-old one which has been aptly captured by a recent World Bank sponsored study on mineral royalties in the mining industry globally: === === Mining activities, particularly surface mining activities, have resulted in the alienation of large tracts of land from communities, depriving poor and marginalised communities of their land surface rights, and as a result depriving many communities of their sources of livelihood. The appropriation of the land of local communities for mining has often engendered social upheavals and adversely impacted on the routine livelihood activities of these communities. Such social upheavals are commonplace in communities affected by mining projects in Ghana. The growing incidence of conflict between mining communities and their chiefs on one hand, and the mining companies on the other hand, echoes the growing concerns about the effects of the mining-sector-led SAP on the population (Akabzaa, 2000). From 1990-98, mining investment in gold in the Wassa West District resulted in the displacement of 14 communities with combined populations of 30,000. The displacement process has been criticised for a number of weaknesses. Apart from being cumbersome and subject to considerable delays, the compensation packages awarded by mining companies to Ghana's subsistence groups generally do not account for farmers who lose land to a mining project at a time when no crops are planted; strictly provide one-off payments for tree crops without factoring in the gestation period; and are not awarded to the many 'landless' hunters and palm wine tappers who have lost their means of livelihood as a result of mine expansion (Andoh, 2002).