US$1bn Agyapa Royalties deal valuation was to attract investors

US$1bn Agyapa Royalties deal valuation was to attract investors – Buaben Asamoa

Communication Director of the New Patriotic Party, Yaw Buaben Asamoa

The Communication Director of the New Patriotic Party (NPP), Yaw Buaben Asamoa, has said the US$1 billion valuation put on the Agyapa Royalties deal was only to ‘spice’ up the deal to attract investors on the stock market.

Speaking on Joy FM’s Super Morning Show, Thursday, September 3, 2020, he noted that the money to be recouped from the deal should be between US$1.5 – US$2 billion. However, that doesn’t mean Ghana has to put out the actual figure of valuation out there on the market.

He said, “The market capitalisation of Ghana’s gold is expected to be between US1.5 – US$2 billion. One does not necessarily have to market its total receivable value.”

He furthered that “We are now developing; we need the investment. Now we are comfortable playing the international market of debt, we want to move to equity. What is associated with equity? Risk!”

The NPP’s Communication Director’s comments were on the back of some Civil Society Organisations (CSOs) backlashing government for going in for a deal that will benefit a few and not the entire country.

The funds from the deal, which are expected to be raised from the Ghana Stock Exchange (GSE) and the London Stock Exchange (LSE), will be a long-term capital, without a corresponding increase in Ghana’s total debt stock.

About the Agyapa Royalties deal

The Parliament of Ghana passed the Minerals Income Investment Fund Act in 2018 for the management of Ghana’s equity interest mining companies and also receive royalties on behalf of the Government of Ghana.

The Minerals Income Investment Fund, which is mandated to invest royalties and revenues it receives on behalf of the government, is also allowed by law to establish Special Purpose Vehicles (SPVs) to help realise its objectives.

As a result, the Minerals Investment Fund established a wholly-owned Ghanaian company Agyapa Royalties Limited, which will trade 49% of its shares on Ghana Stock Exchange and the London Stock Exchange, with the Government of Ghana, through the Mineral Income Investment Fund, remaining as a majority shareholder.