Gold price has hit its lowest since 2010. The precious metal is today trading slightly above 1000 dollars an ounce.
The decline is being influenced by a drop in investor interest for the metal, because of a strong US dollar recovery.
But this development will have serious implications on mining firms operating in the country, the economy and government’s revenue.
There be an immediate impact of this drop on the about 16 companies in Ghana that are extracting the precious metal. This could result in a sharp decline in profits, which might affect efforts to expand their companies and even employ more as well as meet the financial needs of persons working in these companies.
Already most of the mining firms have had to lay of their workers because of the current business environment, and declining gold prices. The current development is set to worsen their plight.
On the economy, the current happenings, could reduce substantially taxes earned from the sector. This is because corporate taxes and royalties paid will also go down.
Even when prices of gold was selling at around 1,200 dollars an ounce , government managed to earn a little over 1 billion Ghana cedis as revenue, so tax collection from the sector will reduce substantially.
In a related development, Crude Oil prices are also declining. It’s selling at 49 dollars a barrel today, the lowest since December 2014.
The development might come along with some mixed excitements. This is because, consumers of petroleum products might be happy, because it could lead to a reduction in prices at the pumps, if the Ghana cedi also stabilizes or appreciates.
However government on the other hand would be worried because of its impact on revenue from the sector.