The Economic Management Team (EMT), chaired by the Vice-President, Dr Mahamudu Bawumia, has resumed its workings with its latest meeting held at the seat of government, the Jubilee House, yesterday.
Discussions centered on the sale of portions of gold produced by mining firms to Bank of Ghana (BoG) to support Ghana’s economy, but quite strangely, the Finance Minister, Ken Ofori-Atta, was not present neither was Charles Kofi Adu Boahen, Minister of State at the Ministry of Finance, present.
Mr Ofori-Atta, has been mentioned as boycotting the EMT meetings and running his own show at the Finance Ministry. It is not clear, if he sought permission to be absent from yesterday’s meeting.
The Herald’s information is that Dr Bawumia and the other members of the EMT, have been trying to develop an alternative to the roundly condemned Agyapa Royalties deal which has been described as an “innovative financing solution”.
It is to use the country’s royalties from its gold deposits and other minerals as collateral for loans to finance projects.
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Mr Ofori-Atta, Adu Boahen and Gabby Asare Otchere-Darko, have been at the forefront of this decision, which has heavily been criticized by finance experts, civil society organizations, as well as persons vested in mineral royalties as inimical to national interest.
Also absent were officials of the Minerals Income Investment Fund mandated to lay the groundwork for the Agyapa Royalties.
However, the official facebook page of the Ministry of Lands and Natural Resources and its Agencies, Minerals Commission and Precious Minerals Marketing Company named the Deputy Minister, George Mireku Duker, as having led agencies under his ministry to a meeting yesterday.
Also present at the behest of the EMT, was the Governor of Bank of Ghana, Dr Ernest Addison and officials of the Ghana Chamber of Mines.
Trade Minister Alan Kyeremanten and Presidential Advisor, Yaw Osafo-Marfo, were present.
While, the Lands Ministry’s page announced that “the parties agreed to continue engaging to achieve their mutual goal which they agree in principle was laudable”, the Vice-President’s official Facebook page that “the Economic Management Team, the Bank of Ghana, Ministry of Lands and Natural Resources, Minerals Commission and PMMC met with the Ghana Chamber of Mines this morning to draw a roadmap for the implementation of the Bank of Ghana’s Gold Purchase Program across the industry”.
“It was agreed that to help shore up the foreign exchange reserves of the Bank of Ghana, starting September 1st (next month), the Bank of Ghana will purchase a portion of the output of the gold mining companies on a continuous basis at world market prices but payment will be made in cedis”, the Vice-President had announced on his page, adding “this will represent a significant and sustainable addition to Ghana’s foreign exchange reserves over time and strengthen the balance of payments”.
Dr Mahamudu Bawumia, recently disclosed that the government has started implementing a policy that gives the Bank of Ghana (BoG) the right to purchase any amount of gold mined in Ghana.
After the central bank had purchased the gold at world market prices, the mining companies could export the remainder, he added.
“Ultimately, once we accumulate enough gold, future borrowing and our currency can be backed by gold. This will stabilise the cedi long term,” Dr Bawumia stated when he launched two new high level information technology programmes at the Accra Business School at Baatsona, Thursday, July 14, 2022.
The Vice-President said the first right of refusal given the BoG to purchase gold mined in the country was backed by law to deepen the gold purchase programme the BoG started, to build up the country’s reserves.
He was explaining the reasons that forced the country into talks with the International Monetary Fund (IMF) and measures outlined to transform the economy to make it resilient to withstand shocks.
Under the Agyapa deal, the government has created a royalty company and assigned a substantial portion of its future gold royalties to this company.
It hopes to raise non-debt cash up front by floating almost half its shares in this company on the London and Ghana stock exchanges using a front company in the British island of Jersey.
Under the plan, Ghana will assign a significant portion of its future gold mining royalties to an offshore company it has created in return for cash up front (estimated at approximately USD 500 million). The government plans to raise the money by listing the company on the London and Ghana stock exchanges while retaining majority ownership. But the news has raised alarm among civil society organizations.
The largest opposition party, the National Democratic Congress (NDC) has promised to repudiate the deal should it win the elections later this year, while the special prosecutor has called for a halt to the plans until completion of a corruption risk assessment.
Despite the current outcry, the plan has been in the works since 2018 with the passage of the Minerals Income Investment Fund Act. The act established a corporate government entity called the Minerals Income Investment Fund.
The fund has the right to receive and invest mineral royalties and other related income that Ghana receives from mining companies. Pursuant to the act, the fund created a royalty company called Agyapa Royalties Limited (Agyapa) in Jersey.
Under a series of complex agreements approved by parliament in August, the fund has allocated the rights to just over 75 percent of royalties from several gold mining leases to Agyapa’s wholly owned Ghana subsidiary, ARG Royalties Ghana Limited (ARG) for $1 billion.
Last month, Gabby Asare Otchere-Darko, made a case for trading in gold as a means of sustaining Ghana’s economy in the current economic climate.
He asserted that Ukraine, which accounts for only 50 tonnes of gold deposits, recently sold US$12.4 billion of gold reserves, following tensions with Russia.
In a post shared on Twitter, Gabby Otchere-Darko, argued that Ghana produces more gold from its vast gold deposits whereas the country currently does not have enough gold reserves.
“Ukraine’s central bank has sold US$12.4 billion of gold reserves since the beginning of Russia’s invasion on February 24, the bank’s deputy head said Sunday. This is a country with only 50 tonnes of gold deposits. In times of crisis gold is a safe haven. We produce much much more in Ghana!” he posted on Monday, July 18.
Following this assertion, some users on Twitter have questioned whether Gabby Otchere-Darko is making a case for the re-introduction of the controversial Agyapa Royalties transaction.
Meanwhile, the MIIF, has disclosed moves to list 49 percent of Agyapa Royalties on the London Stock Exchange and the Ghana Stock Exchange.
The intended listing on both exchanges, which is likely to take place in the fourth quarter of this year, is expected to raise between US$450 million and US$700 million from gold royalties.
Chief Executive Officer of MIIF, Edward Nana Yaw Koranteng, said proceeds from the intended listing will be invested into national infrastructure and socio-economic amenities.
He added that special focus will be placed on mining communities across the country.
