Although the assent of the Minerals Income and Investment Fund Amendment Bill by the President is pending, parliament has approved five agreements to securitize gold royalties of the country through a Special Purpose Vehicle (SPV), Agyapa Royalties Limited.
This agreement is in relation to a gold royalties monetization transaction where the government seeks to raise revenue for development on the back of royalties from the mining sector to the tune of US$1 billion.
This agreement has been approved despite the boycott of proceedings by the Minority which argued on the Floor that, the agreements amounted to mortgaging the proceeds from the mineral wealth of the country.
Expressing Minority’s position on the matter, The Member of Parliament (MP) for Yapei Kusawgu, John Jinapor, described the government’s decision as unfortunate.
“Mr. Speaker, this is unfortunate. And like the learned former Deputy Attorney General said, this transaction is opaque. It does not meet best practices. This transaction is inimical to this country. It is detrimental to the forward march of this country. This is another AMERI in the making. This is another PDS in the making.”
He also reiterated the Minority’s stance of kicking against the decision of the government.
“There is a quote that says that the world suffers a lot, not because of the violence of the bad people, but because of the silence of the good people. We are the good people in this chamber. We will not be part of it today or tomorrow and we shall amend it come 2021.”
Justifying the agreements and explaining the rationale for the approach towards monetizing gold royalties, Minister for Information, Kojo Oppong Nkrumah said the transaction will enable the country raise a substantial amount of non-debt capital.
“This transaction will enable the Republic to raise a substantial amount of non-debt capital. What they did with the road fund was debt. This is non-debt capital and it will not lead to an increase in Ghana’s debt stock. This is innovative, ingenious raising of funds without adding to the debt stock of the republic. Mr. Speaker, secondly, as an equity market capital transaction, the transaction does not include a repayment obligation or requirement to make interest payments. What they did with the road fund was one of the most expensive transactions in terms of interest payment.”
Mr. Oppong Nkrumah continued to say,
“With the way we have structured this particular transaction, we will not be paying that 32% per annum that they did with the road fund. This will not include a repayments obligation or requirement to make interest payment. The transaction also capitalizes Ghana’s revenue from gold royalties while reducing Ghana’s budgetary exposures to fluctuations to gold prices and other external factors.”
The Minority had also alleged that the company in question was originally known as Asaase Royalties Limited but the name was changed to Agyapa Royalties Limited under questionable circumstances, but responding to these claims, MP for Sekondi Constituency, Mr. Andrew Egyapa Mercer insisted that the supposed change of name of the company was false.
The government on the other hand believes that the agreement will go a long way to better the country although the Minority has expressed strong disapproval.
