The Deputy Minister for Lands and Natural Resources, Mr. George Mireku Duker has intimated that the Ministry has submitted a proposal to parliament for the waiving of the cap on the Minerals Development Fund (MDF).
To a very large extent, this action is geared towards ensuring that mining communities fully benefit from their share of royalties channeled into the Minerals Development Fund (MDF).
He underscored that mining communities struggle to have concrete infrastructure and developmental projects to transform their communities, attributing the reason to the capping of the MDF as stipulated in the Earmarked Funds and Capping Realignment Act, 2017 (Act 947).
“The minister of Lands and Natural Resources has tabled the issue before Cabinet and we believe that the 20 per cent of mineral royalties is for development. So, if the cap is waived and we get it as a whole, mining communities will benefit more from the MDF.”
Mireku Duker
He made these statements at the opening of a two-day national multi-stakeholder workshop organized by the MDF and the Ghana Extractive Industries Transparency Initiative (GHEITI) for stakeholders in mining communities.
The workshop was convened for the purpose of strengthening the collaboration between the MDF and other local actors in mining communities. It also creates an enabling environment for knowledge sharing on effective accountability regimes for the fund.
Share of Royalties disbursed to Mining Communities
The Minerals Development Fund Act 2016 (Act 912) requires that mining companies are to pay up to 5 per cent of their total revenues as royalties to the state. Of this amount, the government transfers 20 per cent to the Minerals Development Fund through the Office of the Administrator of Stool Lands (OASL).
According to section 21 of the MDF Act, 80 per cent of the revenue accrues from the mining sector to the Consolidated Fund. Additionally, 4.95 per cent accrues to the respective District Assemblies, and another 4 per cent to the Mining Development Scheme (MCDS).
The Minerals Development Fund was set up through the MDF Act 2016 (Act 912) to provide additional revenue for development projects in communities impacted by mining.
Furthermore, Mr. Duker assured managers of the MDF that the Lands and Natural Resources would follow through on their efforts to ensure that funds channeled to the MDF are distributed expeditiously.
“I have particular interest in the development of mining communities, so as long as I remain Deputy Minister in charge of the mining sector, I will work to ensure expeditious release of funds to the MDF.”
Mireku Duker
While this is in the right direction, stakeholders in the mining sector, particularly, the Ghana Mine Workers Union (GAMU) and the Ghana Chamber of Mines have called for an increase in the share of royalties allocated to mining communities.
More importantly, an increase in the share of royalties disbursed to mining communities together with the scrapping of the cap on the MDF will ensure the rapid development of mining communities.
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