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Ken Ofori Atta

Better gold deals for Ghana: NDC’s Ghana Gold Company vs. NPP’s Agyapa Deal

IT HAS  emerged that the erstwhile National Democratic Congress (NDC) government in December 2010 initiated moves to establish a national vehicle to hold all of Ghana’s gold interests in strict adherence to the laws of the country.

This was to be done through the establishment of a national company to be known as the Ghana Gold Company (GGC).

The objective of the initiative, which was introduced by the then Finance Minister, Dr. Kwabena Duffuor was to hold all of the country’s entitlements to royalties and equity shareholding in gold mining companies and ongoing gold development projects.

The establishment of GGC was the first step to “unlocking the potential value premium” of government’s gold interests and royalties.

It was also aimed at providing an innovative national champion which could be used as a precedent for future royalties and/or other assets. It was also to provide a focal point that allows the gold interests and royalties to be assessed and valued independently.

The proposal also provided the government the flexibility to grant the GGC a growth mandate, for example, through the acquisition of royalties and gold interests of other African countries, or through the exploration of future gold reserves, such that the GGC could grow to become a national legacy for future generations.

The government was to be given the flexibility to monetise its interests in the GGC, if so desired, and possibly to derive an upfront premium to the underlying discounted cash flows, while retaining control of GGC.

The GGC was to be a 100% government-owned company, that would deliver visibility on the value of the government’s gold interests, and provide the government with a variety of capital raising options, among other things.

However, before the GGC could take off, the recently-resigned Special Prosecutor, Mr. Martin A. B. K. Amidu, who was the then Attorney-General had volunteered an opinion to the then Finance Minster, Dr. Kwabena Duffuor to prompt him to adhere strictly to the laws of Ghana in any deals concerning the country’s mineral resources.

By a letter dated 6th October, 2011 with reference number D54/SF.110, Mr Amidu charged the then Finance Minister to comply strictly with the letter and spirit of Articles 175, 176, 257(6), 267(6) and 269 of the 1992 Constitution, the Minerals and Mining Act, 2006 (Act 703), particularly section 25 thereof, the Office of the Administrator of Stool Lands, 1994 (Act 481), the Financial Administration Act, 2003 (Act 654) and the Companies Code, in making a decision. This was to ensure transparency and accountability in the processes initiated by the Ministry of Finance.

Mr Amidu at the time underscored the importance of the mineral resources of the nation as trust property and a patrimony of the citizens of Ghana.

He called for what he termed the most efficacious mechanism and processes in establishing the entity to hold the nation’s gold interests without sacrificing the inalienable patrimony of the citizens of Ghana entrusted into the trusteeship of the President.

The erstwhile NDC government from 2011 started the process of satisfying all the legal and national/public interest requirements before the establishment of the GGC but were voted out of power in 2016 and the NPP took over.

Instead of continuing from where the NDC left off, the NPP introduced the Gold Royalties Monetisation Transaction under a new Act, the Minerals Income Investment Fund Act, 2018 (Act 978), which gave birth to the Agya Deal, which has landed in unprecedented controversy.

Unlike, the NDC’s GGC which was to be a 100% government of Ghana-owned company that would hold the interests in gold, the NPP government under the Agya deal, opted for debt financing ranging from $500m and $700m in exchange for a percentage of the Republic’s gold royalties going forward.

“Mr Speaker, gold is one of Ghana’s major exports. However, unlike other countries, Ghana has not been able to leverage her gold deposits to attract additional funding for accelerated growth and development and minimise exposure to the volatile gold prices. Government, in 2018, will adopt a policy for leveraging the future wealth of this resource to support current development needs,” the 2018 Budget stated.

Some experts have suggested that unlike the NDC’s proposed GGC, which had the national/public interest at the centre and was thus progressing steadily and strictly within the confines of all the relevant laws, the NPP’s Agyapa deal sought in part, to promote private interests, hence the avalanche of allegations of corruption and other infractions in the entire transaction, which the President, Nana Akufo-Addo has been accused of shielding, leading to the resignation of the Special Prosecutor, Mr. Martin Amidu.

Incidentally, Mr Amidu was the Attorney General, who offered legal guidance to the NDC government when it proposed the establishment of the Ghana Gold Company about a decade ago.

According to him, the letter he wrote nine years ago to offer his opinion on the NDC government’s proposed handling of Ghana’s gold interests, is of relevance today as it was when it was written because of its advocacy for transparency and accountability in accordance with the Constitution and existing laws in any future attempt to establish a National Vehicle To Hold Ghana’s Gold Interests.

“Probity, transparency and accountability in public office constitute the bedrock of good governance on minimising the potential risks of legislative and executive actions to promote corruption by making the enterprise of corruption and corruption-related offences a very high risk endeavour for the citizen,” Mr. Amidu stated.

The above statement was contained in his report on the Analysis of the Risk of Corruption and Anti-Corruption Risk Assessment of the Processes Leading to the Request for Approval and Approval of the Transaction Agreements and Tax Exemptions Granted by Parliament in Relation to the Gold Royalties Monetisation Transaction Under the Minerals Income Investment Fund Act, 2018 (Act 978) and other Related Matters (the Agyapa Deal).

Meanwhile, the President has directed the corruption-riddled Agyapa Royalties deal to be sent back to Parliament for review.

The move follows the completion of a corruption risk assessment on the deal by the Office of the Special Prosecutor.


Ghana/ Desk Report

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