Beyond Hydrocarbons and Conventional Solid Minerals: A Linkage-Based Mineral Prioritisation Framework for Rethinking Extractives-led Inclusive Development—Evidence from Ghana's Salt Sector

Technical Summary: A Linkage-Based Mineral Prioritisation Framework for Rethinking Extractives-led Inclusive Development

Problem Statement
Historically, mineral development strategies in resource-rich economies, particularly in Africa, have prioritized sectors based on their contributions to foreign exchange earnings, government fiscal revenues, and direct GDP output. While these macroeconomic indicators are vital for national management, the paper argues they provide an incomplete assessment of a mineral sector's developmental significance. Conventional evaluation criteria often overlook economy-wide production, income, and employment linkages. This oversight leads to the neglect of "development minerals"—industrial minerals and construction materials with strong domestic market integration but lower international export values.

The paper posits that the strategic importance of an extractive sector cannot be inferred solely from export value. Instead, it depends on the sector's capacity to stimulate domestic enterprise, create productive employment, support downstream industries, and strengthen the wider economy through backward and forward linkages. In Ghana, for instance, policy attention has been disproportionately concentrated on gold and crude oil, while the salt sector, despite its potential for industrialisation and regional trade, remains marginal. There is a critical analytical gap between the broad developmental aspirations of frameworks like the Africa Mining Vision (AMV) and the measurable criteria used to implement mineral policy.

Methodology
To address this gap, the study introduces a Linkage-Based Mineral Prioritisation Framework (LBMPF). This framework integrates Hirschman's linkage theory, input–output (I-O) analysis, and the resource-based industrialisation objectives of the AMV and the ECOWAS Minerals Development Policy.

The empirical application utilizes a Salt Sector Extended Input–Output (SSEIO) model constructed from Ghana's 2018 Social Accounting Matrix (SAM). The methodology involves:

1. Data Disaggregation: The aggregate mining account in the SAM is disaggregated to isolate the salt sector as a distinct productive activity, preserving control totals for the original SAM.
2. Dual-Model Approach:
   • Leontief Demand-Driven Model: Used to estimate backward production linkages (upstream demand for domestic inputs) and Type I multipliers for output, value-added, labour income, capital income, and employment.
   • Ghosh Supply-Driven Model: Used to assess forward production linkages (downstream distribution of outputs as intermediate inputs). The study interprets these results as indicators of structural allocation linkages rather than literal predictions of unconstrained supply responses.
3. Comparative Analysis: The salt sector is evaluated against two conventionally prioritised extractive sectors: crude oil and other mining (largely gold).
4. Six-Dimensional Assessment: The LBMPF evaluates sectors across six complementary dimensions: backward production linkages, forward production linkages, value-added generation, labour-income creation, capital-income generation, and employment effects.

Key Results
The analysis reveals a distinctive developmental profile for Ghana's salt sector that contrasts sharply with conventional macroeconomic rankings:

• Backward Linkages: The salt sector exhibits comparatively strong backward production linkages (Total Output Multiplier: 1.193), surpassing "other mining" (1.127) and indicating a robust capacity to stimulate upstream domestic industries (e.g., transport, packaging, utilities). While crude oil has a higher multiplier (1.700), the study notes this is partly driven by imported capital equipment, whereas salt's linkages are more domestically embedded.
• Forward Linkages: The salt sector shows weak forward linkages (Total Output Multiplier: 1.006) compared to other mining (1.375) and crude oil (1.274). This lower multiplier relative to other mining sectors reveals substantial unrealised opportunities for downstream industrial development, indicating that while salt is a critical input for food processing, chemicals, and pharmaceuticals, these downstream industrial opportunities remain largely untapped in Ghana's current production structure.
• Income and Employment Multipliers:
  • Labour Income: Salt production generates significant labour-income multipliers (0.192 total), reflecting its labour-intensive nature compared to the capital-intensive crude oil sector (0.192 total, but with a much lower direct employment base).
  • Employment: The salt sector demonstrates a massive employment multiplier (120.464 workers per GH¢1 million change in final demand), vastly outperforming crude oil (12.646) and other mining (8.326).
  • Value Added: Salt generates substantial domestic value-added effects (0.736 total), comparable to crude oil (0.735) and slightly lower than other mining (0.821), but distributed across a broader network of linked industries.

Key Contributions
The paper makes three specific contributions to the literature and policy discourse:

1. Conceptual: It extends Hirschman's linkage theory from a descriptive tool for explaining sectoral interdependence to a practical, operational framework for mineral-sector prioritisation (the LBMPF).
2. Empirical: It provides the first economy-wide assessment of Ghana's salt sector relative to conventional extractive industries, demonstrating that development minerals can possess substantial strategic importance despite modest direct export earnings.
3. Policy: It translates the industrialisation principles of the AMV and ECOWAS Minerals Development Policy into measurable criteria (linkages and multipliers) that can inform strategic choices in Ghana and other resource-rich economies.

Significance and Claims
The paper claims that the LBMPF offers a transferable analytical tool that aligns mineral policy with the objectives of resource-based industrialisation and inclusive development. The central proposition is that extractives-led development becomes more inclusive when policy considers not only revenues generated at the point of extraction but also the production, income, and employment opportunities created throughout the economy.

The findings suggest that Ghana's salt sector is a strategic resource capable of supporting industrial diversification and regional value chains, yet it is undervalued by current export-centric metrics. The paper argues that mineral prioritisation should not be a mechanical ranking system where one sector dominates all dimensions; rather, different sectors serve different policy objectives. However, by incorporating linkage-based indicators, policymakers can identify sectors like salt that offer high potential for domestic structural transformation, even if they do not lead in foreign exchange earnings.

The study explicitly acknowledges limitations, noting that the model assumes fixed production coefficients and static technology, and does not account for environmental sustainability or induced household consumption effects. Consequently, the results are presented as indicators of relative developmental potential under the observed economic structure rather than forecasts of future growth. The paper concludes that reframing mineral prioritisation through the LBMPF shifts attention from extractive output to developmental impact, offering a more comprehensive basis for designing policies that advance inclusive extractives-led development.