Full Statement of CSOs Press Conference on Agyapa Deal
CSOs Response to the
Implementation of the Minerals Income Investment Fund and Matters Arising
25th August, 2020
Ladies and Gentlemen of the
Press,
We, members of the Alliance of
CSOs Working on Extractives, Anti-corruption, and Good Governance, have been
following keenly, the raging disquiet among sections of the Ghanaian population
about the government’s decision to leverage Ghana’s present and future mineral
royalties for international credit to finance the country’s development
programmes.
While the intention of
government may be genuine, and aimed at optimising the benefits of gold
royalties to the state, we are of a firm conviction that, the lack of, or
inadequate consultations on the bill that eventually passed into the Minerals
Income Investment Fund (MIIF) Act, (2018), Act 978, with its 2020 amendments is
responsible for the lack of public support for its implementation. A
consultative process that respects the views of Ghanaians on such an important
decision would have been useful in shaping government’s policy and potentially
exploring other investment options that could achieve greater impact for
citizens.
The opaque manner in which the
Act is being implemented: the relatively weak transparency and public oversight
arrangements, and the haste with which the government is running to the market,
in spite of concerns being raised by a broad spectrum of the Ghanaian populace,
do not engender public trust and consensus building around matters of public
policy. This approach rather raises moral and governance questions. The
assumption that, once everything goes through parliament, it is above board and
represents the interest of all Ghanaians is deceptive, and turns democracy on
its head. It makes the elected, the only relevant stakeholders in policy
making, and as former U.S. president, Barack Obama once indicated, it wrongly
assumes that democracy is a transaction executed between leaders and the people
only at elections.
We note that, within the
context of good governance, such an important decision requires consultation
even with the poor woman in Tarkwa, Daamang, Obuasi, Kenyasi, and other
communities, who have lost their livelihoods to mining, and continues to bear
the negative consequences, in a language she will understand. The Chiefs and
Queen mothers who have given their lands and continue to engage government with
the hope that one day, at least, the requirement of the Mineral Development
Fund Act to cede 10 percent mineral royalties to develop their communities,
will be respected in full. Any assumption that the people will not understand
such policies is very disrespectful in a democracy. In fact, the people do not
only understand “vote for me”.
We are deeply worried that if
government proceeded to the market amidst the public outcry, and threats of
future policy reversal from the major opposition party, Ghana may suffer the
undesirable consequence of a rather high premium, as investors may be sensitive
to the political risks associated with such investment. It is also worth noting
that the current financial difficulties of the country, imposed by Covid-19, and the pending
elections, present lethal disadvantage for Ghana on the London Stock Exchange;
as a desperate country looking for resources to invest.
Ladies and
gentlemen, the recent amendment to the Minerals Income Investment Fund Act
creates more suspicion. The rushed amendments inserted worrying clauses,
including clauses that lifts the Special Purpose Vehicle (SPV); Agyapa
Royalties, above Ghanaian tax laws, waves Ghana’s sovereign immunity, and by
that exposes the country to the risk of damaging lawsuits should any future
government seek to reverse this transaction.
What we find
even more repulsive about this whole transaction is the provision that permits
Agyapa Royalties, a supposed company of the sovereign state, registered in a
tax haven, to borrow money or raise equity in foreign currency from any source
on the back of the gold royalties of Ghanaians without the requirement for any
further approval, consent, or administrative act of the Government of Ghana -
Sect.33(2)(a).
We
acknowledge, ladies and gentlemen, that postmortem attempts are being made to
engage the public by the MIIF to provide answers to some questions Ghanaian
have on the Agyapa transaction. This, in fact, underscores the point that prior
engagements would have better served the national course and deepened consensus
on the policy. Regardless of the attempt to clarify some concerns, significant
questions remain unanswered:
1. Are the managers and directors of Agyapa not politically
exposed persons, and were they not selected through a non-competitive process?
Just last week, we sighted a call for expression of interest, placed in the
Daily Graphic, inviting prospective consultants for the development of a strategic
plan for the Mineral Income Investment Fund. While we welcome the open and
transparent process for the firm selection relative to this assignment, we have
not found evidence of the same openness in the creation of the SPV and the
appointment of its directors. Again, it beats our imagination as to why an
entity, without a corporate strategy, and approved spending plans, will proceed
to raise $1 billion and cede US$500 million to government in such indecent
haste, especially when there is no known national emergency to warrant such
rush.
2. Were the transaction advisers and legal intermediaries not
handpicked by the government, and are they not politically exposed persons?
3. What is the dividend policy on the investment being sought
on the London Stock Exchange (LSE)? This is a crucial part of the entire
transaction which will tell Ghanaians how the investors will benefit from the
royalties of the state. This also allows the public to see whether indeed the
deal is beneficial or not. Shockingly, parliament showed no interest in this
and rather waved its oversight.
4. To convince Ghanaians that this is a good deal, don’t we
need to know how the Agyapa investments compare with other investment options?
5. Agyapa
Royalties is going to invest risk-free royalties on investments unknown to the
state. Don’t we need to know the level of risk the royalties will be exposed
to, and how those risks will be mitigated by the managers of Agyapa Royalties.
What will Agyapa be investing the $500 million dollars in? This interestingly
was not before parliament. Neither did the house demand for the investment
options before approving the transaction. In essence Parliament has agreed to
cede Ghana royalties to a company to undertake investments at its pleasure.
We take this
opportunity to also draw the attention of the Government to its own 2016
manifesto commitment in respect of the mineral sector, Ref. Page 27, Natural
Resources – Land, Forestry and Mining, paragraph (f), where the NPP pledged to:
“Ensure
that mineral revenues are efficiently managed for the benefit of Ghanaians, and
to enact a consolidated Mineral Revenue Management Law, similar to the
Petroleum Revenue Management Act 2011 (Act 815), to guide the use of mineral
revenues in strategic sectors of our economy”.
We however,
regret to note, that what we are being served, and against which we are holding
this press conference, is a far cry from what was promised.
Indeed, the
transparency and accountability provisions in Ghana’s Petroleum Revenue
Management Act (PRMA) have been hailed world-wide as a best practice. The 2017
global Resource Governance Index placed Ghana’s petroleum sector governance at
13th position, among 89 countries; and the
best in Africa. Its value is reflected in the fact that Ghanaians today have
adequate information on how their petroleum revenues are being managed on their
behalf. Issues of poor spending decisions, or monies that cannot be accounted
for under current and previous governments, are all matters of public
knowledge, thanks to the PRMA, as well as the annual reports of the Public
Interest and Accountability Committee (PIAC).
Ladies and
gentlemen, Ghanaians will probably not have lost sleep over this Agyapa –
Mineral Income Investment transaction, if it had been orchestrated under an
open and transparent regime such as the PRMA provides. Indeed, what the
government is intending to do with our mineral royalties would not have been
permissible under the PRMA. For instance, Sect.5 prohibits the use of the
Petroleum Holding Fund, which includes royalties, as collateral for borrowing.
It also prohibits borrowing against the country’s petroleum reserves, which
sadly, is what the Minerals Income Investment Fund seeks to do.
Ladies and
Gentlemen, we are happy to engage as always, to learn, debate and challenge
government on ways to optimise the mineral royalties if government is willing
to activate those democratic channels. Those who have divergent views are equal
stakeholders in the mineral revenue. Therefore attempts to disregard dissenting
views, is most unfortunate, as they defy the principle of participatory
decision making, which forms the bedrock of democratic practice.
We take this
opportunity to call on his excellency, Nana Addo Dankwa Akufo-Addo to:
1. Acknowledge
that, though, the MIIF and its SPV may be legal without public input, it
fundamentally goes against his pact with the Ghanaian people, particularly the
mining communities to cede 20 percent of mineral royalties to develop the
communities.
2. Suspend the implementation of the MIIF until all documents
relating to the establishment of the SPV, and its beneficial owners have been
disclosed. As concerned Ghanaians, we sought to access the transaction
documents on the MIIF’s website, only to discover that it has none.
3. Establish a multi stakeholder process to review all
options to optimise the mineral royalties in order to secure risk-free revenue
to the state. Gold royalty is the most certain revenues to the state. Even
though commodity prices tend to be cyclical, Gold has only oscillated within 20
percent, which makes it a more stable commodity than oil. And with oil losing
demand growth to alternative fuels, Gold is expected to continue to be a stable
source of revenue.
4. Recognise
that, by its current approach to the implementation of the MIIF, government may
appear to be encouraging citizens to transact business in tax havens.
Ours is a
struggle against the elite capture of resources that commonly belong to all
Ghanaians, and we call on every one of us, regardless of our political
persuasion, to join hands in safeguarding the national interest.
Thank you.
Participating
Organisations:
1. CSOs Open Licensing Monitoring Group
2. ACEP
3. Centre for Extractives and Development Africa (CEDA)
4. ISODEC
5. Citizens Movement Against Corruption (CMAC)
6. Civil Society Platform on Oil and Gas (CSPOG)
7. Penplusbyte
8. Oil Watch Ghana
9. IDEG
10. CDD
11. NRGI
12. PWYP
13. CEPIL
14. Imani Ghana
15. Women Aspire
16. SEND Ghana
17. PIAC
0 comments: