29.02.2024 Feature Article

The Deception of Ghana's Agyapa Royalties Deal and the Imperative for NPP Government to Refund $12 Million or Face Prosecution under President John Mahama

The Deception of Ghana's Agyapa Royalties Deal and the Imperative for NPP Government to Refund 12 Million or Face Prosecution under President John Mahama
29.02.2024 LISTEN

The Deception of Ghana's Agyapa Royalties Deal and the Imperative for NPP Government to Refund $12 Million or Face Prosecution under President John Mahama

By Ebenezer Ato Ntarkurfah Jackson
In August 2020, the Ghanaian government unveiled its proposal to sell the majority of its future gold royalties to an offshore entity known as Agyapa Royalties Ltd., domiciled in the British Crown Dependency of Jersey. The deal, ostensibly aimed at leveraging Ghana's gold assets for financing and development, has been met with skepticism and criticism from various quarters.

However, the Agyapa Royalties deal, unveiled amid much fanfare in August 2020, stands as a stark testament to the pitfalls of opacity and questionable practices in governance. From its inception, the deal bore the hallmarks of fraudulence, shrouded in secrecy and rife with contradictions. This report contends that the Agyapa deal was fraudulent from the beginning, perpetrating a deception upon the Ghanaian people and threatening the nation's economic sovereignty. Through a comprehensive analysis, this report aims to expose the nefarious underpinnings of the Agyapa deal, advocate for transparency and accountability, and demand justice for the financial mismanagement that has beset Ghana's resources.

Proponents of the Agyapa deal, including Finance Minister Ken Ofori Atta, have made assertions lacking substantive evidence, failing to assuage key concerns. Minister Ofori Atta boldly projected a vision where Ghana would hold a 50% stake in Agyapa, suggesting a lucrative future for the nation. He stated, "Imagine we have this Royalty Company, which in 20 to 30 years becomes a $30 billion company, which we will have 50 per cent stake." However, this vision seems far-fetched when confronted with contradictory statements regarding the ownership structure of Agyapa.

Moreover, contradictions regarding the ownership percentage of Agyapa raise doubts about the transparency and intentions behind the deal. While Deputy Minister of Finance Charles Adu Boahen claims Agyapa is 100% owned by the government, earlier statements indicate otherwise, suggesting potential obfuscation of facts. Mr. Boahen stated, "The company... was owned entirely by the Government of Ghana." However, this assertion contradicts earlier statements by the finance minister, indicating that the government would only have a majority stake of 51%. Such inconsistencies in official statements cast a shadow of doubt on the legitimacy of the deal and suggest a deliberate attempt to mislead the public.

A comparative analysis between Ghana and Norway's approach to managing natural resources unveils stark disparities. Norway's leaders have implemented robust taxation policies on their oil and gas sector, resulting in substantial wealth accumulation for the country through initiatives like the Government Pension Fund Global. Norway levies a special tax specifically on the petroleum sector, standing at 56%, alongside a corporate tax rate of 22%. In contrast, Ghana's Agyapa deal lacks transparency and risks exploitation of resources for the benefit of a select few. The disparity in taxation rates, coupled with Norway's prudent management of revenue from natural resources, highlights the shortcomings of Ghana's approach and underscores the urgent need for transparency and accountability in resource management.

The involvement of the NPP government in the Agyapa deal raises questions about their commitment to protecting the public purse, as promised. Despite assurances of value for money in public transactions, the Agyapa deal highlights a significant failure in governance and accountability.

Parliament's demand for details on the expenditure related to the Agyapa deal, coupled with the revelation that $12 million was spent on the suspended Agyapa royalties deal, underscores the urgent need for transparency and accountability. The NDC's pledge to investigate the Agyapa deal, retrieve illegal payments, and prosecute perpetrators aligns with the public's demand for justice and accountability.

However, amidst the controversy and financial mismanagement surrounding the Agyapa deal, it is noteworthy that the deal did not proceed as planned. This outcome serves as a silver lining, indicating that accountability mechanisms are at work and that the public's demand for transparency is being heeded.

In conclusion, the Agyapa Royalties deal represents a troubling episode in Ghanaian politics, characterized by opacity, contradictions, and potential financial loss to the state. It is imperative that thorough investigations are conducted, illegal payments are retrieved, and perpetrators are prosecuted to uphold transparency, accountability, and the rule of law. Only through such actions can Ghana safeguard its resources and ensure the welfare of its citizens.

Ebenezer Ato Ntarkurfah Jackson
Cornell University— Johnson School of Business

MBA Class of 2015
[email protected]