Ken Ofori-Atta briefs House of Chiefs on Agyapa Royalties deal
Government has extended its consultations on the controversial Agyapa deal to the chiefs.
Finance Minister, Ken Ofori-Atta appeared before the National House of Chiefs headed by Togbe Afede XIV who once questioned the government’s transparency on the deal.
About the deal
Government is looking for cash to finance capital expenditure and wants to leverage the country’s mineral resources to raise $1bn.
In the deal, 75.6% of royalties of at least 16 gold mining companies will go into Agyapa Royalties Ltd.
The company will list on the London Stock Exchange and the Ghana Stock Exchange and float 49% shares valued at $1bn.
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 the company 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.
But after a coalition of civil soceity organisations criticised the deal as opaque, the government agreed to widen consultations, promising to engage traditional leaders.
House of Chiefs meets Finance Ministry
That engagement has happened, the GNA has reported.
The Finance Minister and a team of officials walked the chiefs through an elaborate powerpoint presentation of the transaction.
This presentation was done by a Deputy Minister for Finance, Mr. Charles Adu Boahen.
Speaking to the benefits of the deal, the Finance Minister said Agyapa royalties deal “offers us an incredible opportunity to re-imagine ourselves, and rebuild our country to bring the Black Star to where it should be.”
“Nananom, physical metal gold in the capital markets we trade 500 times more than that so the real money is not only physical, but positioning Ghana to be able to participate in where the value addition is” he stated.
Government has indicated it will use proceeds of its Agyapa deal to fund Ghana’s first world-class gold refinery.
The Finance Minister also said Agyapa deal will create the largest royalties company in Africa and will help fund investments in the construction of district hospitals announced by the president.
The Minister also said government plans to establish the National Development Bank through monies made from the deal.
The ‘wholesome’ bank, he explained, would provide funding for venture capital and EXIM banks.
Question Time
Members of the House of Chiefs had the opportunity to ask questions, including why the Ministry failed to engage them before taking the deal to Parliament despite being custodians of the land with vested interest in mineral royalties.
President of the House, Togbe Afede XIV, also raised questions about the composition of the the Minerals Income Investment Fund (MIIF) on the Board of Agyapa Mineral Royalty Company.
MIIF is the majority shareholder on the nine-member board but it has only two seats on the board.
He argued that as the majority shareholder of the company, its representation on the Board should not be less than five.