Civil society organisations (CSOs) that have raised concerns with the Agyapa Mineral Royalties deal say they are unconvinced with government’s justification of the deal and have called for a national dialogue “on options to optimise Ghana’s mineral royalties.”

Dubbed ‘Alliance of CSOs working on extractives, anti-corruption and good governance,’ numbering 22, the CSOs, at a press briefing yesterday, reiterated an earlier call on government to suspend implementation of the transaction pending the national dialogue.

Presenting a statement on behalf of the group of CSOs, Dr Steve Manteaw said, “It is not enough for the Minister of Finance or the government to ask citizens to trust their sincerity and their expertise. It would not be right for them to try to bulldoze through a controversial transaction such as this, and about which genuine questions have been raised by experts as well as by ordinary people.”

Valuation of royalties at $1 billion not true

Taking issue with the valuation of the royalties at $1 billion, the CSOs said that amount provided by the sector ministry was not the actual value of the initial public offer (IPO).

According to the group, the $1 billion valuation reflected the government’s assessment of its assets assigned to Agyapa which had been approved by Parliament.

“In recent communication, the Minister of Finance has stated that Agyapa’s asset value of $1 billion approved by Parliament will not be the fair value that will be determined by the market; granted that the market will determine the fair value of the asset, it is important for government to determine the appropriate net asset value for the market to consider what it deems fair,” Dr Manteaw read.

if the asset was under-valued by government itself, then Ghana could not expect the market to give a favourable valuation of the IPO, which the Minister himself stated will be about 0.6 to 3.2 times the asset value.

“This indicates that Ghana is just gambling on the market for the determination of the value of an important revenue stream,” the statement added.

Other available options

The CSOs maintained that they were interested in knowing what other options were considered by government and the specific trade-offs made to suggest that it is better to sell than wait for the revenues.

“In considering the stock market, what other deal structures besides the IPO route did government consider, and can the comparative and benchmarking analysis be shared for review?” they requested.

CSOs refer govt to 2016 manifesto on increasing royalties to mining communities
Dr Manteaw reminded government of its promise, in the party’s manifesto to increase royalties to mining communities.

“With regard to mineral royalties, the NPP’s policy is to ensure that mining communities receive a higher share. Currently, 80% of the royalty goes to government, 10% to the Minerals Commission, and 10% to the community. The NPP will reduce government share to 70% while doubling the community share to 20%.

"The additional 10% to the community will be given to the district assemblies to be used specifically for developing infrastructure in the mining communities,” the statement quoted, wondering “how government is responding to this promise is missing from its new efforts through the Mineral Income Investment Fund (MIIF).”