02.09.2020 Feature Article

Agyapa Saga; A Reasonable Case Of Corruption Or Otherwise?

Agyapa Saga; A Reasonable Case Of Corruption Or Otherwise?
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I would like to begin this article by reiterating the question - Is Agyapa Royalties deal a reasonable case of corruption or otherwise? The deal started in June 2018 when Parliament passed the Mineral Income Investment Fund (Act 2018) to manage the equity interests in mining companies and also receive royalties on behalf of the Government of Ghana.

This propelled the setting up of an offshore limited liability company called Agyapa Royalties Limited which was previously known as Asaase Royalties Limited. Is there a rush into this transaction by the end of this year because it fails and lacks the test of transparency?

News bulletins on radio these past few weeks have become a litany of woes filled with cacophonous voices of concern, opposition threat, protest and controversy.

Measuring the level of passion, I wish I can pretend that all of them are voices of the Opposition. But I know they are not even though Minority in Parliament has been resolute in its opposition to the deal. On the flip side, Civil Society Organizations(CSOs) in the extractive sector have opposed the deal calling on government to suspend the deal and make some key disclosures on the deal.

I have been closely monitoring the media spotlight on the Agyapa Royalties deal ; a part of the Government's strategy to beat the long-standing problem of lack of capital for development projects. The controversy over the Agyapa Royalties deal started on August 14,2020 when the Majority MPs secured the numbers to pass the agreement although the Minority staged a walked out.

Over the years, the government under different Executive presidencies have tried to look for money by going to the International Monetary Fund (IMF), the capital market or the international bond market.

Clearly, these three main sources of capital are expensive. Interest rates on the bond markets are generally exponential and because the tenure is short, Ghana risks falling into high debt predicament.

IMF loans have become unpopular because they usually come with restrictions. Covid-19 seems to have made loans on the capital market unattractive. And with Ghana's current poor credit ratings and the effects of the pandemic, the government needs access to cheaper sources of capital.

The Coronavirus pandemic has wrecked havoc on the financial sector of Ghana but then, is a deal like the Agyapa Royalties agreement the best and only strategy government can adopt to raise money on the global financial market?

If the purpose of the transaction is to stabilize Government income, how does converting a direct right to receive royalty from mining into a right to receive dividends, if and when declared, from a company to whom the miners pay the royalty achieve that?

Would it be in the interest of Ghana to freeze the implementation of this transaction? Or will it have the effect of taking the discussion outside the election cycle and give more opportunity for it to be considered openly and dispassionately? I humbly ask the key players involved in this agreement the above questions.

As an Activist, the government’s decision to monetise the country’s minerals royalties through Agyapa Royalties Limited is forward-thinking with Ghanaians’ best interest at heart.

Sufficient evidence abounds that, African country like South Africa has its mining companies owned by indigenes. Contrarily, if you come to Ghana, these companies or concessionary companies such as the AngloGold, Goldfields are owned by foreigners. For instance, in 2018, the Ghanaian government rebuked AngloGold Ashanti for breaching local content laws. This state-business tension shows that, without rescinding the power of transnational mining companies, resource-led economic transformation in Ghana will be blocked. Therefore, it’s time to give local champions within our environs the chance. As Ghanaians, we do think this will benefit us.

I believe that anything that concerns Ghana is in the interest of Ghana. In the same vein, any transaction that's undertaken could be a poison or an antidote for posterity.

This column takes a quick start for the month. I wish you a happy new month.

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