West African governments are preparing to recalibrate mining royalties as gold prices approach unprecedented levels, a shift that carries profound implications for public revenues, investment flows, and the broader sustainability of the continent’s extractive sector. UBS, in a note released on September 30, projected that gold could reach $4,200 per ounce by mid-2026, more than double the price seen in early 2024, when the metal traded around $2,000. This surge has intensified debates across West Africa about how to capture more value from the continent’s natural resources while maintaining an attractive environment for investors.
For decades, most gold-producing countries in the region relied on fixed royalty rates, often set below 5 percent, which constrained state revenues during periods of rising commodity prices. However, the last decade has seen a gradual adoption of variable, or progressive, royalties in countries such as Burkina Faso, Mauritania, Côte d’Ivoire, and Zimbabwe. Under these systems, tax rates automatically increase alongside the market price of gold, allowing governments to benefit from price spikes without imposing abrupt, discretionary fiscal adjustments. This policy shift represents a more responsive and strategic approach to resource management, balancing revenue mobilization with market realities.
In Mali, the transition to a progressive royalty structure illustrates the practical impact of such reforms. A fixed rate of 3 percent had governed gold production since 1991, regardless of market fluctuations. In 2024, the government replaced this system with a graduated scale aligned with international price trends. Under the new framework, a 3 percent royalty applies when gold trades below $1,000 per ounce, rising to 6 percent for prices between $1,600 and $2,000, and 7 percent for gold priced up to $2,500. Beyond that threshold, the rate increases by 0.5 percent for every $400 price rise. By anticipating price movements, Mali aims to maximize fiscal returns from its gold sector while providing a clear and predictable framework for investors.
Burkina Faso has adopted a comparable approach. Initially capping royalties at 5 percent, the government revised the maximum to 7 percent in October 2023 for gold priced above $2,000 per ounce. As record highs were achieved in 2024 and 2025, authorities further introduced incremental increases of 1 percent for every $500 rise in the gold price, ensuring that revenues remain responsive to global market dynamics. Côte d’Ivoire, which already had a progressive system, reinforced its framework in the 2025 Finance Law by raising rates by up to two percentage points across all price bands. The ad valorem tax now ranges from 5 percent for gold below $1,000 per ounce to 8 percent for prices exceeding $2,000, a recalibration designed to capture more of the windfall from surging global prices.
Ghana, in contrast, has largely retained a fixed royalty of 5 percent, supplemented by an additional tax on annual gross production that was tripled from 1 to 3 percent in March 2025 during a period of public debt restructuring. While this adjustment increases state revenue, it underscores the delicate balance governments must strike between fiscal gains and investment climate. Mining royalties are not merely budgetary tools; they shape perceptions of stability and predictability, which are crucial for attracting long-term capital in a sector dominated by multinational firms.
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The broader West African context highlights the tension between revenue mobilization and investment retention. As gold trades near $3,800 per ounce, and forecasts from Goldman Sachs and JP Morgan anticipate $4,000 by mid-2026, Mali and Burkina Faso appear best positioned to benefit from their progressive royalty systems. These frameworks allow them to capture additional revenue automatically without deterring investors with sudden policy shifts. Conversely, countries such as Senegal, which have not yet adopted variable royalties, may face pressure to revise their fiscal regimes to leverage the global gold rally. Senegal’s three operational mines, including a new entrant this year, offer a potential source of fiscal relief as the government seeks financing for economic recovery amid high debt levels.
However, frequent or unpredictable changes to royalty structures carry risks. Experts such as Charles Bourgeois, a mining law specialist at the Paris Bar, caution that volatile fiscal policies can discourage investment and undermine long-term sectoral stability. In economies where mining contributes substantially to public revenue, often exceeding 10 percent of total government income, policymakers must carefully weigh the trade-offs between immediate fiscal gains and sustaining a competitive investment environment.
The implications of these adjustments extend beyond national budgets. Higher royalties and taxes, if implemented prudently, can finance critical infrastructure, social programs, and environmental management initiatives, aligning extractive sector policies with sustainable development goals. In practice, this could mean reinvesting gold revenues into energy access projects, water systems, or educational infrastructure, thereby ensuring that the benefits of mineral wealth contribute to inclusive economic growth rather than being captured solely by state coffers or multinational companies.
As West African governments navigate this recalibration, they face a complex landscape shaped by global commodity trends, domestic fiscal pressures, and the need to maintain investor confidence. The region’s response to the gold surge will not only determine the immediate flow of revenues but also set precedents for resource governance, fiscal transparency, and sustainable development strategies in Africa’s extractive sector. The next 12 to 18 months will be pivotal in determining whether West African nations can leverage record gold prices to reinforce both economic resilience and long-term sustainability.
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