A mineral-economy computable general equilibrium model for Ghana

A computable general equilibrium model (CGE) model is presented for conducting mineral policy analysis in the context of national economic development for Ghana. The model places strong emphasis on production, trade, and investment, and can be used to examine both micro and macro economic impacts of policies associated with mineral investment, taxation, and terms of trade changes. The model can also be used to study mineral sector performance impacts such as increased output due to technological change or the discovery of new deposits. Broader development policy analyses of investment, trade, taxation, external shocks, environmental control, etc., can be conducted using the model. Simulation results indicate that investment in the non-gold sector of Ghana's mineral industry increases real GDP more than investment in gold mining. In addition, foreign investment in mining must be encouraged. The mineral taxation policies implemented by the government are beneficial to the economy. Investment in mining and the increased mineral exports since 1986 have contributed significantly to the country's economic recovery, and gold mining accounts for 95 percent of this contribution.