Beyond CSR: Optimizing the impact of mining in host communities

Taxes and royalties from mining are crucial for Ghana's economy.

The Minerals Commission reports that mining contributes 13.18% of total tax revenues. This has been consistent over the past ten years.

Mining also attracts foreign investment to Ghana. The Ghana Investment Promotion Centre states it is a key driver of foreign direct investment.

Since 1986, Ghana’s mining sector has drawn over US$6 billion in investments. It is now one of Africa’s top gold producers. In 2022, Ghana was Africa's largest and the world's sixth-largest gold producer by volume.

Mining companies also engage in Corporate Social Responsibility (CSR) projects. These initiatives aim to address socio-economic issues in local communities. Some large companies have established foundations for community development.

Despite these efforts, tensions exist between mining companies and host communities. There have been youth demonstrations and clashes with security personnel recently.

Critics argue that the mining industry often overlooks environmental impacts and local livelihoods. Questions arise about whether community discontent stems from unrealistic expectations or genuine economic needs.

Are current CSR efforts sufficient? Or are they misaligned with community needs? Should communities accept the "resource curse" narrative?

Frequent protests indicate a feeling of being shortchanged by mining operations. The root cause appears to be an economic disconnect requiring sustainable investments rather than short-term charity.

Research shows gaps between what mining companies provide and what communities expect. A top-down approach to CSR often misses local needs, according to experts.

Many CSR programs lack depth and fail to create lasting benefits after mine closure. Companies often focus on meeting legal requirements rather than addressing real community needs.

To bridge this gap, a shift towards sustainable partnerships is essential. Moving beyond traditional CSR can foster long-term economic development for communities.

Current CSR projects are well-intentioned but do not meet core community needs. People seek sustainable opportunities instead of occasional handouts.

Studies show concerns about the sustainability of existing CSR commitments post-mine closure. Traditional CSR models are often short-term and reliant on company funding.

The question remains: how long can companies sustain these projects? What happens if they cease operations?

With growing demand for inclusive socio-economic transformation, stakeholders must adopt a new approach called Corporate Social Investment (CSI).

CSI promotes innovative, collaborative strategies for sustainable investments in host communities. This model focuses on creating self-sustaining businesses that generate employment locally.

Transitioning to CSI requires expert support for successful implementation and management of initiatives. Mining companies still determine project focus but should adopt more collaborative approaches with communities.

By shifting from traditional CSR to CSI, companies can create shared prosperity legacies that benefit local populations directly.

Dennis is a Senior Project Analyst at Injaro Investment Advisors Ltd., focusing on sustainable African businesses through Corporate Social Investment (CSI). His team has extensive experience in research, advisory services, investment structuring, and project management.