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The Ghana Integrated Iron and Steel Development Corporation (GIISDEC) has announced plans to introduce a mandatory licensing regime for scrap dealers and exporters, aimed at bringing order to the multibillion-cedi scrap metal industry. The move is expected to address issues such as theft, environmental degradation, tax evasion, and the protection of critical national infrastructure.
New Framework for Oversight
The licensing policy, currently in development with the Ministry of Local Government and the Attorney-General’s Department, will require all participants in the scrap value chain—collectors, middlemen, exporters, and buyers—to register under a robust oversight framework.
“The entire scrap industry will be regulated, and individuals or entities will need a license to operate,” stated Williams Okofu-Dateh, Chief Executive Officer of GIISDEC.
According to Mr. Okofu-Dateh, unlicensed operators have operated with impunity, engaging in cross-border trade, evading taxes, and posing significant risks to public safety and the environment.
The Backbone of Ghana’s Steel Industry
The scrap metal industry is a cornerstone of Ghana’s steel manufacturing sector, which produces over 70% of the iron rods used in the country. With no viable local iron ore production, steelmakers rely almost entirely on scrap metal to manufacture construction essentials like iron rods and anvil bars.
Despite its importance, the sector remains informal and undocumented, creating an environment where theft and unsafe practices thrive. GIISDEC plans to change this by formalizing the industry to ensure transparency and accountability.
Tackling Theft and Environmental Hazards
The lack of regulation has led to widespread theft of public infrastructure, including drain covers, electrical components, and machinery. Beyond theft, the industry has been criticized for its hazardous practices, such as the burning of wires to extract copper, which contributes to air pollution and health risks in nearby communities.
Unsecured and overloaded trucks carrying scrap also pose significant road safety hazards, often spilling sharp debris that endangers other road users.
Economic and Fiscal Benefits
GIISDEC’s licensing initiative aims to formalize the scrap industry, enhancing its contribution to government revenue. Currently, many scrap dealers operate with minimal accountability, paying only token fees at the municipal level. Proper licensing will facilitate better taxation and traceability of transactions, ensuring that the state captures its fair share of revenue.
“We need to know who is adding value to scrap materials, who collects, who processes, and where it ends up,” Mr. Okofu-Dateh emphasized. The regulation will also help monitor pricing practices, protect dealers from exploitation, and enforce compliance with health and safety standards.
Regulating Export and Import Practices
The licensing framework will also address irregularities in the export and import of scrap metals. Some dealers smuggle scrap out of the country, depriving local steel plants of raw materials. Others import scrap from neighboring countries, such as Côte d’Ivoire, with minimal oversight.
Under the new rules, all scrap sales—whether domestic or international—must be conducted through licensed entities.
Implementation Timeline
While the exact rollout date is yet to be announced, GIISDEC aims to implement the licensing regime by the end of the year. A multi-stakeholder committee is working to finalize the policy’s legal and institutional framework.
A Strategic Priority
Regulating the scrap metal industry is central to GIISDEC’s mandate of building an integrated iron and steel industry in Ghana. Established by an Act of Parliament in 2019, the corporation views scrap as the only locally available raw material for steel production and a critical component of the nation’s industrial development.
“The scrap business is not just a side hustle. It is the backbone of our steel industry,” Mr. Okofu-Dateh noted. “But currently, we are leaving this critical sector in the hands of amateurs. That has to change.”
This bold move is expected to bring order and professionalism to Ghana’s scrap industry, safeguarding its economic, environmental, and industrial future.
Story by: Mercy Addai Turkson #ahotoronline.com
