By Benjamin Bright-Davies
For decades, Ghana has measured economic progress largely through what it extracts from the earth—gold, timber, oil, and other natural resources. Yet one critical question remains largely unanswered: Are we accounting for what we are losing as we grow?
Natural Resource Accounting (NRA) is a system that measures the stock and value of a country’s natural assets and tracks how changes in those assets affect national wealth over time. It goes beyond recording the income generated from resource extraction and seeks to account for the depletion, degradation, and loss of natural capital. In essence, it applies to nature the same accounting principles that businesses apply to their machinery, buildings, and equipment.
In conventional accounting, when a company uses an asset to generate income, it records depreciation to reflect the reduction in that asset’s value over time. This ensures that profits are not overstated. Yet at the national level, countries often celebrate increases in Gross Domestic Product (GDP) from mining, logging, and other extractive activities without accounting for the depletion of the natural assets that made those earnings possible. The result is that GDP can present an incomplete picture of economic performance and, in some cases, overstate the true growth of national wealth.
When a forest is cleared, a mineral deposit exhausted, or a river system polluted, the country loses part of its natural capital. However, these losses are rarely deducted from national income with the same rigor applied to depreciation in financial accounting. What appears as economic growth may therefore be partly the liquidation of national assets rather than the creation of new wealth.
This reality has become increasingly urgent for Ghana. Our mineral deposits, forests, water bodies, and fertile lands are valuable national assets, yet many are being degraded at alarming rates. Gold extracted through both legal and illegal mining can never be replaced. Forests destroyed through illegal logging may take decades or even centuries to recover. The nation records the revenues generated from these activities but often fails to fully account for the cost of the assets being consumed.
The consequences are becoming increasingly visible. Across parts of the Central and Western Regions, heavy rains have once again exposed the environmental damage caused by illegal mining and deforestation. Rivers clogged with silt, degraded wetlands, and the removal of forest cover have reduced nature’s capacity to absorb and regulate water. The result is widespread flooding that destroys homes, displaces families, and disrupts economic activity.
The damage extends beyond the environment. Roads, bridges, drainage systems, schools, and other public infrastructure—assets built with scarce public resources—are increasingly vulnerable to flood-related destruction.
Every washed-out road, collapsed bridge, or damaged drainage system represents a loss of national wealth. Funds that could have been invested in education, healthcare, innovation, or job creation are instead diverted to reconstruction and emergency response.
The impact on future productivity may be even more severe. Polluted rivers increase the cost of water treatment and threaten public health. Agricultural lands affected by mining become less productive. Fisheries suffer from declining water quality. Forest loss reduces biodiversity, weakens climate resilience, and undermines tourism potential. These costs accumulate quietly but significantly, reducing the opportunities available to future generations.
Natural Resource Accounting offers Ghana a more honest and sustainable measure of development. It helps policymakers understand whether economic growth is being achieved through genuine wealth creation or through the gradual depletion of irreplaceable natural assets. By incorporating natural capital into national accounts, decision-makers can better evaluate the true costs and benefits of economic activities and design policies that protect long-term prosperity.
The rains are sending a clear warning. The floods affecting many communities are not merely natural disasters; they are symptoms of a deeper failure to recognize the economic value of our forests, rivers, wetlands, and ecosystems. Ghana’s natural wealth is being depleted faster than it is being restored, while the costs are increasingly borne by citizens through damaged infrastructure, lost livelihoods, and reduced economic opportunities.
Until we begin to account for the depreciation of our natural assets as carefully as we account for the depreciation of financial and physical assets, we risk mistaking the consumption of national wealth for genuine economic progress. True development is not measured only by what we extract today, but by what we leave behind for tomorrow.
The writer is the CEO of CashBack Capital
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