Ken Ofori-Atta, Minister of Finance, has said the government will present a revised version of the Agyapa agreement to parliament in the first quarter of 2022, following periods of engagement with stakeholders to incorporate their concerns.
The government’s efforts to push for the Agyapa deal is hinged on the quest to reduce the its growing debt levels as well as serve as a means to provide essential social services for the country’s citizens.
“The funds raised will be used to support Government’s development efforts, covering education, road infrastructure, community mining and health infrastructure.”
Ken Ofori-Atta, Minister of Finance
This he said during the 2022 budget presentation on Wednesday, November 17, 2021.
Aspects of the deal that will remain unchanged include the listing of Agyapa Royalties firm on the London stock exchange market. The Minister iterated that the Mineral Income Investment Fund (MIIF) will go ahead to list up to 49 percent of its 100 shares in Agyapa Royalties Ltd. The MIIF will then retain 51 percent of the Agyapa Royalties Ltd. as was the case in the previous agreement.
Other areas that sparked concerns among several stakeholders included the valuation of the deal, which a number of CSOs described as undervalued. Then, the government disclosed upon listing the 41 percent shares, it will be able to raise US$500 million in capital as against an expected valuation of US$1 billion as indicated by the think tank, IMANI Africa.
Should the deal have been approved then, this meant that the government would have sold almost 76 per cent of its future receipts from gold royalties to Agyapa Royalties Ltd.
Unlike the circumstances that characterized the previous deal that saw the Minority stage a walkout, it is anticipated that this time around the approval or not of the agreement will have the full consent of the house of parliament.
Agyapa Royalties was incorporated in line with Section 3(a) of the MIIF Act, 2018 (Act 978) as amended by the Minerals Income Investment Fund (Amendment) Act, 2020 (Act 1024), which allows for the fund to create and hold equity interests in a Special Purpose Vehicle (SPV) in any jurisdiction in furtherance of its objects.
Agyapa Royalties was incorporated in Bailwick of Jersey to operate as a publicly-traded pure gold royalties company with the Fund intending to assign a portion of its gold royalties to the SPV.
MIIF to increase presence of indigenous companies
As part of the initiatives under the MIIF, the government seeks “to increase the presence of wholly-owned Ghanaian companies in the large-scale and mid-tier areas of the mining sub-sector.”
The MIIF also seeks to develop local capacity in the Ghanaian mining sector by providing technical support and long-term capital to viable and licensed small-scale miners and mining operators.
The Minister said the MIIF is also intended to roll out a “Small Scale Mining Incubation Programme” aimed at transforming indigenous Small-Scale mining companies into mid-tier to Large Scale companies.
The government said it will earmark an amount of GHS354 million for the Small Scale Mining Incubation Programme “over a period of 24 months beginning February 1, 2022 as the initial pilot.
Per the structure for the disbursement of funds, “up to 30 per cent of the allocation will be earmarked for the provision of equity capital to selected small-scale mining companies under an acceptance criterion… including strict environmental considerations.”
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