Twenty-four Civil Society Organisations (CSOs) on extractives, anti-corruption, and good governance have called for a national debate on the future of Ghana’s mineral income. The call comes in the wake of attempts to reintroduce the Agyapa deal.
According to the CSOs, the government’s failure to trigger a debate smacks of deceit and undermines the trust upheld in President Akufo-Addo prior to the 2020 general elections.
The group also condemned the president’s move to proceed with the deal without recourse to parliament and threatened to pursue legal action if the agreement was not returned to parliament for deliberation and approval.
“We reiterate that the coalition is not against alternative actions to optimise the mineral sector. However, we do not support the current attempt to sell the risk-free right of the country to royalties and the attendant questions around the transaction,” the CSOs said.
In 2020, the controversial Agyapa deal became the subject of debate in the media as government proposed to sell the majority of its future royalties from mining leases to an offshore company called the Agyapa Royalties Limited. The government planned to sell 49% of the company’s share as a solution to the country’s debt crisis but critics said the royalties were valued far lower than the actual worth of income accrued from all the mining concessions.
In 2020, the Special Prosecutor, Martin Amidu, concluded in a corruption assessment report on the transaction that it smelled of corruption.
President Akufo-Addo directed that the deal be reviewed and brought back to parliament for deliberations but that never happened until March 9, 2021, when the president hinted of a reintroduction of the deal in his state of the nation address (SONA).
In a statement issued on May 17, 2022, the CSOs recounted the numerous instances the government hinted of a reintroduction of the agyapa deal. They cited the vetting of the finance minister and a public forum organized by the Minerals Income Investment Fund.
Recent developments indicate that the government had concluded negotiations with Jersey for a Bilateral Investment Treaty to provide a broad framework for the relationship between Ghana and Jersey to enable the Agyapa transaction.
The CSO’s claim government is also negotiating a double taxation agreement with Jersey to create a binding constraint on Ghana to tax Agyapa Royalties Limited after the transaction and effectively circumvent one of the critical concerns raised by civil society.
“It is worthy of note that the government, through Ghana Revenue Authority (GRA), has surprisingly started a media campaign on double taxation agreements (DTAs)to convince Ghanaians that another DTA in a tax haven is not new,” the group added.
The group also noted that the current decision taken by the finance minister defeats the president’s commitment to form a broader national consensus which would involve a discussion of the process, substance, and propriety of the deal.
The coalition has, however, indicated that it will continue to highlight the loopholes in the Agyapa royalty transaction and enlighten Ghanaians on the deal.
The former Special Prosecutor, Martin Amidu, proposed a full-scale investigation into the process of setting up the entire transaction, describing the deal as the “fruit of a poisoned tree which cannot be redeemed.”
The civil society organisations agree with Martin Amidu’s concerns.
“All the structures for Agyapa, especially the Jersey structure and the agreements structured to take away Ghanaian state control, are inherently corrupt and depraved (page 46 of the OSP report). The OSP showed in the assessment that Agyapa is not the skilled product of professional financial experts seeking to maximise Ghana’s interest but instead a concoction of clique interests”, they said in their press statement.
The alliance of CSOs also highlighted the government’s intention to sell 49% of the country’s future receipts of untied royalties from 48 mining leases covering the best gold acreages in the country for a paltry US$500 million to US$750 million as one of the major issues about the transaction. This action, the CSO’s fear, will relinquish power over the country’s resource to independent directors appointed by the sponsors of the transaction.
“Littered through the agreement are ironclad clauses that achieve a simple goal: the investors who will buy the 49%, not Ghana, will take all the critical decisions. If someone wanted to ensure that in future, all of Ghana’s vital gold revenues will be controlled by a group of about six or seven people carefully handpicked by a few Ghanaian politicians and their friends in investment banks in London, this would be the most effective method to ensure so,” the CSOs said.
The statement also revealed that an objective analysis of the data on the twelve projects currently on the 48 leases shows that the value of the royalties linked to Agyapa over the indeterminate term of the contract is at least US$3 billion, far more than the US$1 billion figure the government used in its deal structuring for Agyapa.
The group expressed its disappointment at the government’s attempt to divert attention from the actual threat to the public asset by promising transparency after the listing on the London stock exchange.
The statement said it is wrong and morally wrong that a government would pass tax laws for everyone to follow but send its state investments offshore to escape the tax laws and regulations it has installed for others.
“Why would anyone seek to escape taxes in a nation when the assets belong to citizens, and the taxes will also go to them? The only sensible reason a state entity will be placed beyond the taxation and regulatory regime of a nation will be if its profits accrue to some people and not the state. We should domicile everything in Ghana and be subject to Ghana law,” it stated.