A discussion paper by Edward Brown
High unemployment and high gold prices since the 2000s have resulted in a boom in artisanal and small-scale mining in several African countries. However, there has also been a negative impact on agriculture and the environment. This highlights the need for policy and regulatory action supported by consistent implementation, says the African Center for Economic Transformation.
Inclusive growth and job creation are prominent issues on the development agenda. In sub-Saharan Africa (SSA), the phenomenal growth of artisanal and small-scale mining (ASM) has prompted some policy makers to consider it as a pathway to sustainable job creation and poverty reduction in rural areas. However, there is stark evidence that ASM is causing extensive damage to the environment and to livelihoods and threatening food security. This has forced a rethink about how ASM can co-exist with smallholder agriculture, which is still the backbone of many SSA economies.
The importance of the two sub-sectors is clear. Research conducted in 2017 by the African Center for Economic Transformation (ACET) found that about 1.1 million people are engaged in ASM in Ghana (with 4.5 million dependents), 300,000 in Sierra Lone (with 1.8 million dependents) and 200,000 in Burkina Faso (with 1 million dependents). In addition, ASM is the second highest employer after smallholder agriculture in resource-rich rural communities. In Ghana, ASM contributes nearly a third of national gold output. In Sierra Leone, artisanal mining provided 36% and 64% of diamond and kimberlite mineral exports respectively in 2014. In Burkina Faso, gold production doubled in about eight years, becoming the second largest export after cotton.
At the same time, agriculture remains of central importance. In Ghana, agriculture contributes a third of merchandise exports, and even more in Burkina Faso (44%) and Sierra Leone (88%). In Ghana, 44.3% of currently employed people work in the agricultural sector, as do 78.4% in Burkina Faso and 68.5% in Sierra Leone. Smallholder farmers constitute over 80% of the total agriculture sector workforce in the three study countries.
Agriculture and mining, together, employ the biggest proportion of the labour force in the three countries, but farming is characterised by low incomes, low productivity and, hard labour. In contrast, ASM has brought a “get-rich-quick” mentality to resource-rich rural areas. ASM is drawing a workforce of young men and women (18-40 years), along with some children, away from the already ageing farming population (55 years plus). ASM has made labour harder for farmers to find and more expensive to hire. It pays up to three times more than farm incomes, to the extent that 43% of farmers interviewed were very willing or willing to sell their farmland to ASM entrepreneurs. ASM also takes over farmland by force. In all the survey districts in Ghana, at least 50% of respondents had lost their farms to ASM operators, of which 53% were for cash crops and 40% for food crops.
ACET found that two key factors make ASM an unlikely tool for rural poverty reduction. First is the non-renewable nature of gold and diamonds, which makes ASM a non-sustainable medium- to long-term source of income for communities. In addition, as minerals are exhausted in one location, ASM operators will shift locations every few years, even if regulated. This partly explains why poorly-regulated ASM seems incompatible with smallholder agriculture – its huge and negative environmental and social footprint.