‘It is not in Ghana’s interest’ – Document shows A-G criticises Agyapa deal

Attorney-General Gloria Akuffo has advised the government against the controversial $1bn Agyapa deal, describing it as an inimical to Ghana’s interest.

Her counsel is contained in a document, dated July 22, 2020, purported to emanate from the Attorney-General’s Department.

The A-G was responding to the Finance Ministry’s request for legal advice on the Minerals Income and Investment Act, the law which creates the Agyapa deal.

Agyapa deal in country's interest – Finance Minister - Graphic Online
Photo: Finance Minister Ken Ofori-Atta

In the deal, Agyapa Royalties Ltd is will manage 75.6% of royalties of at least 12 gold mining companies and an additional four more that is expected to become operational, such as in Obuasi and the Namdini mine near Bolgatanga.

The Minerals Development Fund takes 20% while the Ghana Revenue Authority gets 2.4%.

Agyapa Royalties Ltd would keep 51% of the value of the company and float 49% on London Stock Exchange and also the Ghana Stock Exchange.

That 49% has been valued by the government at $1billion. It hopes to get investors to buy shares while Agyapa Ltd collects gold royalties from future mineral resources to pay as dividend to shareholders.

Agyapa Royalties Ltd is also incorporated in a tax haven, British channel island, Jersey, where companies don’t pay corporate tax. It means shareholders will enjoy considerable tax reliefs.

The Finance Ministry has touted the deal as an opportunity for Ghanaians to own a share of the country’s mineral resources and also an inventive way to raise money for development.

READ: Minerals Fund Provides 15 Answers Over Agyapa Royalties Deal

But in the document sighted by theghanareport.com, the Attorney-General, Gloria Akuffo, said the benefits of the deal are “unclear” apart from the “one-off payment” of $ 1 billion.

She also noted the terms and conditions of the agreement placed “onerous” responsibilities on the Minerals Income and Investment Fund and the state.

Yet the provisions in the agreement are “skewed against the interest of the Fund.” The A-G explained that while the Fund and the state can suffer “punitive” consequences for defaulting on the agreement, Agyapa Royalites Ltd appear to be left of the hook.

There is a terse encouragement to “use their best efforts to ensure the execution of the transaction, the Attorney-General observed.

The A-G also described the agreement as “unconscionable” because there is no fixed term to the deal.

“They are expected to run until the expiration of the last mining lease in Ghana,” government’s legal advisor expressed alarm and added that the agreement “appears to be cast in stone with no option to evaluate their effectiveness and or satisfactory performance.”

Gloria Akuffo pointed out that an agreement that runs in perpetuity and makes no room for any further legislation offends the Minerals Act, which does not allow a Minister to enter into an agreement exceeding 15 years.

The A-G also criticised the mode of payments under the agreement, which is in dollars and recommended changes.

She explaining that dollar payments violated the Bank of Ghana Amendment Act which mandates payment to be made in the local currency.

The Attorney-General also expressed worry that the state is not allowed to touch or vary its 75.6% allocation of royalties to Agyapa Royalties Ltd under any circumstances.

In effect, the state cannot change the law it passed to allocate this percentage to the Minerals Income and Investment Fund, which bankrolls Agyapa Royalties Ltd.

The Attorney-General was also worried that some clauses in the agreement between the Fund and Agyapa Royalties Ltd insulate the agreement from any court in Ghana.

“It freezes anything legal, including judicial orders and decisions. In effect, no court can pronounce on any part of the agreement as being illegal, unconscionable, null and void or on any matter before the court which may or is likely to affect any part of the agreement.”

Expressing disapproval and disgust, the Attorney-General said this would “amount to executive interference on the powers of the judiciary, which is a violation of the concept of separation of powers under the laws of Ghana.”

“Therefore the executive cannot enter into any agreement that curtails the independence of both the legislature and the judiciary.”

Already, the 2020 NDC presidential candidate John Mahama has said if elected, his government would not honour the terms of the agreement.

It is unclear how many of the criticisms and recommendations made by the A-G was included in the final document passed by parliament.


Parliamentary approval

After the legal advice from the government’s chief lawyer, some changes were made to the agreement.

It appeared, initially, it was not meant to go to Parliament for approval.

In her letter dated August 12, 2020,  and addressed to the Minister of Finance, two days before the deal was given Parliamentary approval, she said, “We have maintained in our advice to the Ministry of Finance that the Assignment Agreement should receive Parliamentary approval.”

That was done on August 14.

Below are the concerns the AG raised two days before Parliamentary approval.

Download (PDF, 1.74MB)

Response from Ministry

Theghanareport.com is working to get a response from the Attorney-General and Finance Ministry.

The Minority walked out during the passage of the controversial Agyapa Mineral Royalty Limited agreement on August 14.

Some 15 civil society organisations have asked the government to suspend the deal, citing a lack of transparency.

Spokesperson for the CSOs, Dr Steve Manteaw criticised the government for ‘rushing’ the deal through parliament without further consultations with non-partisan stakeholders.

They want all the documents relating to the establishment of the Agyapa Royalties Limited, and its beneficial owners “disclosed” before government continues with the implementation of the deal.

The CSOs have called the deal as ‘elite state capture’. There are also allegations of conflict of interest and nepotism are reported by a governance group, CorruptionWatch.

CorruptionWatch maintains that the transaction advisors for the deal are politically-exposed persons with close ties to the top echelons of the Akufo-Addo government.

It is not clear who exactly are the transaction advisors. The Information Ministry has denied reports that Kofi Osafo Maafo who is son of the Senior Minister Yaw Osafo Maafo, is not a transaction advisor.

The Finance Minister Ken Ofori-Atta has insisted the deal is in Ghana’s interest and rejected criticisms that the government is mortgaging Ghana’s gold proceeds.

Minority’s say

The Minority also feels uncomfortable with incorporating the company in a tax haven, Jersey Island in the United Kingdom.

A member of the Energy Committee, who is also the Member of Parliament for Yapei-Kusawgu, John Jinapor, insists the government is offering” a cock and bull” explanation for choosing a tax haven which would deny the country corporate taxes.

“Which policy contradiction is this?  A company owned by the government, you pay corporate tax when you make a profit and so when this company is registered and listed in Ghana, if it makes a profit, it will pay tax to the government of Ghana. [But in this case] the government of Ghana says no, it is no proper.

“So we want to list in somebody else’ country and register the company there so we do not pay taxes to the government of Ghana. Is this patriotism?  Is it a rational thing to do? Is it reasonable that the very government which is preaching that it wants taxes to develop this state and coming up with a lot of legislations to rake in more revenue has decided that a company owned by the government will pay tax so it will rather go to another country?




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