Minority raises red flag over royalties deal

The Minority in Parliament has boycotted proceedings for the approval of an agreement between the government and the special purpose vehicle, Agyapa Royalties Limited.

The agreement is in relation to a gold royalty monetisation transaction where the government seeks to raise revenue for development on the back of royalties from the mining sector to the tune of GH₵ 1 billion.

According to the Ranking Member of the Finance Committee, Cassiel Ato Forson, the agreement if passed will shortchange Ghanaians and will not benefit successive governments.

“The government on Thursday evening laid before Parliament a request for approval of a transaction agreement and a tax exemption for the government of Ghana to monetise our mineral royalties in the form of a transaction.

“We all know that as a country we all earn royalties from our mining leases, as a result if you are to look at the budget statement every year, there is an amount of money that comes into the budget statement.

“In fact, for the year in question, if you are to look at the budget statement carefully, government is going to bring in a revenue of a billion Ghana cedis from mineral royalties.

“What this government has decided to do will not help the country. The government has decided to borrow against this royalties so the future government will not get money from the mineral royalties but rather they will get the money today and spend it,” Mr Ato Forson argued.

The ranking member of the finance committee also mentioned that the majority members failed to answer several questions posed by the Minority in Parliament about the deal.

“Strangely, they are trying to hide behind the structure that is quite new and alien to our system and today when we met at the Finance committee, we were so shocked in the sense that government in doing so has decided to incorporate a company called Agyapa Royalties Limited.

“Not long ago there was some discussion that government had formed a company called Asaase Royalties Limited. After the issue came to the public, the government has now decided to change the name from Asaase to Agyapa. When we asked about the incorporation document, the directors, they failed to give an answer,” he said.

Majority responds

But the Member of Parliament for Sekondi, Andrew Kofi Egyapa Mercer, said the allegations raised by the Minority does not hold. He challenged the minority to provide evidence to back their claim.

“They need to show us the documentation that indicates that the said company name submitted was that of Asaase because the current documentation does not show a change of name.

“Indeed, when any company name is changed, it will clearly bear the former name and its present name where they will refer to its as Agyapa Resource Royalties Limited, but the document presented to the finance committee bears Agyapa Royalties Limited. So let those who are alleging prove,” he argued.

He said that the government is seeking to channel its portion of the royalties into better use for the benefit of the country.

According to him, the government is not desperate for funds but rather “the government is using creativity, wisdom, proper structuring to derive better outcomes from our mineral resources than have been the case in the past.”

Members of Parliament, in July this year, backed the mining lease agreement between the government and 14 mining entities under the Asaase Royalties Limited special purpose vehicle associated with the Royalty Monetisation provision of the Minerals Income Fund Act of 2018 (Act 978).

The objective of the fund was to maximise the value of income due the country from its mineral wealth for the benefits of its citizens.