Policy think tank, IMANI Africa, earlier Saturday, August 29, 2020, presented a detailed analysis of the controversial Agyapa Royalties deal.

The analysis mentions, among other things, that the timeline of four months to IPO is problematic, “unless the Government has surreptitiously filed for listing.”

It also said to ensure favourable pricing of the offered securities, the timeline for listing any MIIF SPV on any international exchange should be extended to at least April 2021.

“This should also allow additional scrutiny into the Agyapa transaction because, so far, it lacks the basic minimum of transparency and assurance of above-board dealing required of a sovereign transaction,” the periodic ‘IMANI Alert’ on the deal stated.

The Agyapa Royalties deal, according to government, is part of its strategy to beat the long-standing problem of lack of capital for developmental projects.

Below are the four key arguments IMANI Africa makes about the controversial deal:

1. Rising gold prices and rising gold production in Ghana should lead to our royalties being valued higher but this deal because it is choosing the stock market listing approach has ended up undervaluing the resource by more than 65%. This is because investors on the stock market have other instruments to tap into gold's positives.

2. Hence we propose that the deal be done through a beauty parade where we invite several royalty streaming companies to bid directly. We have examined dozens of transactions in recent times and have concluded that Ghana shall make more through a beauty parade than through the stock market.

3. Also, the legal terms of the transaction are still skewed against Ghana. Despite the AG's attempts, skewed provisions remain. Ghana will have very little say in the company's choice of investment options.

4. We should strongly limit the total amount of royalties we want to sell upfront in order not to simply defer our debts to succeeding next years due to revenues from minerals plummeting as a result of this transaction. Dividends are tiny and unreliable. Royalties are more stable.

Read the detailed analysis by IMANI Africa below.