Minister for Information Mr Kojo Oppong Nkrumah has been explaining the structure of the Agyapa Royalties transaction and its benefits to the country.
In an interview on PM Express on the Accra-based Joynews channel, Mr Oppong Nkrumah said the deal raises no debt financing for Ghana and bears no loan interest expenses.
He added that Ghana retains a majority stake in future royalties.
“Under the transaction Ghana now has a vehicle for undertaking participating interests in mineral explorations the world over”, the Mr Oppong Nkrumah who is also the MP for Ofoase-Ayirebi reiterated.
Background
The government passed the Minerals Income Investment Fund (MIIF) Act, 2018 (Act 978) with the key objective of maximising the county’s mineral wealth for the benefit of Ghanaians.
It was also to ensure that receiving royalties from gold mining companies will be sustainable.
Accordingly, Parliament recently gave approval for the creation of a Special Purpose Vehicle (SPV) in line with MIIF Amendment Act, which is yet to be assented by the President.
This is to allow the SPV to do business across the world in accordance with the law.
The SPV is Agyapa Royalties Ltd, initially incorporated as Asaase Royalties Limited in a British channel island, Jersey, in 1991.
It will enjoy tax reliefs on transfer of dividends and other concessions that allow it to retain some of the incomes it generates.
The company will be responsible for managing 75.6 per cent of Ghana’s royalty inflow from the 12 gold mining companies that currently operate in the country, with four more expected to come on stream.
It is expected to list on the London Stock Exchange (LSE), but the government, through the MIIF, will retain at least 51 per cent, while a subsidiary of Agyapa, ARG Royalties Ltd.
The company will be responsible for channeling the royalties to its parent company and will be listed on the Ghana Stock Exchange (GSE) with the government maintaining a similar shareholding structure.
As of 2017, the average inflow of royalties was estimated at GH¢650 million.
NDC’s claim
The main opposition National Democratic Congress (NDC) and its flagbearer for the 2020 general election, former President John Dramani Mahama have criticised the transaction.
They alleged that it is meant to allow a few individuals to have control over the country’s mineral royalties for personal gain
However, Minister for Information, Mr Oppong Nkrumah said it was unfortunate to hear the NDC flagbearer make unsubstantiated claims, threaten potential international investors and sinks to scare them away from the transaction.
He criticized minority NDC’s habit of creating controversy around international transactions.
“This is not the first time, in 2007 and in 2008, our friends on the other side when we started with the Vodafone deal criticized it and made it clear that when they are elected into power, they will review it. In the end where did the review lead to? But they threatened international investors and created talks on the floatation process on the international market. Maybe, Ghana could have taken advantage of insurance premiums and other incentives that came with the deal but because of how the constant criticism of the opposition on deals like this, those who do risks assessment on our deals often charge as more.
“Even with our ESLA (Energy Sector Levy Act) deal, the same thing happened. They sounded all manner of threats to international investors. When we brought in the Synohydro deal, we had a minority that wrote a letter to the IMF trying to alert them that the deal we were about to sign is a loan and not a barter arrangement. So, you ask yourself to what effect? So that if the IMF says it is a loan, then they rubbish the transaction. It is no different from what is happening with the Agyapa deal as our colleagues in the minority are threatening international investors and that in the unlikely event that they win power, they will not honour it. I don’t think it is patriotic so we on the majority side of parliament think that the minority should stop conducting themselves in that manner,” he added.
