Explore debt-for-nature swaps to address galamsey – Expert tells Ghana at COP29

The country has been urged to adopt the Debt-for-Nature swap approach to help fight the illegal mining menace, known locally as galamsey.

Debt-for-nature swaps are financial transactions in which a portion of a developing country’s foreign debt is forgiven in exchange for indigenous investments in environmental conservation measures.

The African Head of Sustainable Finance of KPMG Africa, John Boateng Akuoko-Tawiah, who made the call, said there were instruments and grant opportunities that could be leveraged under debt-for-nature swaps to deal with the destruction of the environment through illegal mining.

For instance, he said, the Adaptation Fund had vehicles the government could work with to ensure that certain trees were planted and processes followed to reclaim degraded lands to restore their ecological integrity.

“Currently, there are debt-for-nature swap programmes that are being done through the Adaptation Fund that I think there should be urgency to see how they can be replicated in Ghana”.

“They are being done in Brazil, so Ghana can do the same,” he said.

Mr Akuoko-Tawiah made the call in an interview after a panel discussion held at Ghana’s Pavilion at the ongoing 29th Conference of Parties (COP29) of the United Nations Framework Convention on Climate Change (UNFCCC) in Baku, Azerbaijan, last Friday.

The side event focused on exploring opportunities that support Africa’s transition to climate-friendly energy sources.

Context

Ghana’s Minerals and Mining (Amendment) Act, 2019 (Act 995) provides severe sanctions for persons who engage in illegal mining in the country.

As per the law, a mining activity will be described as illegal if the miner has no valid licence; the holder of a mining lease does not abide by the requirements of the lease; a person mines in forbidden or restricted areas such as water bodies and forest reserves.

During the last eight years, the government has launched military operations to help weed out illegal miners from rivers and forest reserves.

In spite of the frantic efforts that have been made to stem the tide, illegal mining activities continue to thrive, a development that has left the country’s water bodies heavily polluted and tracts of agricultural lands degraded, leaving a plethora of uncovered pits dotted across the country.

Many climate change and environmental experts have described the destructive activities of illegal miners, particularly in forest reserves as a major enabler of climate change, given that trees serve as carbon sinks to prevent the globe from warming.

Programming approach

Against that backdrop, Mr Akuoko-Tawiah told the Daily Graphic that urgent steps needed to be taken to stop the galamsey menace while lasting solutions were sought to regenerate the degraded ecosystem.

He said it was important to approach the illegal mining fight from the programming point of view by getting the various stakeholders involved, especially the ministries of Lands and Natural Resources (MLNR); Environment, Science, Technology and Innovation (MESTI); Finance and allied agencies.

“The Ministry of Finance has to be involved because when the debt-for-nature swaps come in, there is a component where these inter-ministerial agencies must collaborate and coordinate activities,” Mr Akuoko-Tawiah said.

Again, he said for such an approach to be successful, stakeholders at the local level must be ready to protect the environment from destruction by illegal miners.

Enforcement

Besides the debt-for-nature swap, Mr Akuoko-Tawiah also stressed the need for the enforcement of mining laws to stop further destruction of the environment.

“The long-term solution to illegal mining is doing things right. There must be stronger enforcement regimes to stop illegal mining activities that degrade the lands.

“When these lands continue to be degraded, it will have a lasting negative effect on our unborn generation,” the African Head of Sustainable Finance of KPMG Africa said.

Climate-friendly energy

Touching on climate-friendly energy, he underscored the need for Africa-driven data for investment in energy projects.

He said it was through accurate data that workable interventions could be determined for clean energy.

“The thing is knowledge and renewal of mindset. We need to build capacity and move on from the business as usual way of doing things to the use of appropriate technology,” he said.

Affordability

The Head of Risk and Sustainability Management at the Ghana Infrastructure Investment Fund (GIIF), Kwadwo Kwakye Gyan, said one of the major obstacles that needed to be scaled as the country looked to cleaner energy sources was the affordability of renewable energy projects such as solar.

He said the cost of the solar, wind and renewable energy infrastructure was a huge challenge and people could not afford it.

Mr Gyan said it was critical for regulatory issues such as lowering tariffs to be looked at by the government to serve as incentives for private sector participation.

“Efforts must be made to leverage public-private partnerships (PPPs) to fund energy transition projects. In this regard, government subsidies will be the way forward for people to afford solar energy sources,” he said.

He added that when there was a stronger PPP, it became easier for international funding agencies to provide finance for clean energy projects.