Parliament has approved five agreements to securitize gold royalties of the country through a Special Purpose Vehicle (SPV), Agyapa Royalties Limited, pending the assent of the Minerals Income And Investment Fund Amendment Bill by the President.
This is 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.
The 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.
The Member of Parliament (MP) for Yapei Kusawgu, John Jinapor, expressing the Minority’s position on the matter described the government’s decision as unfortunate.
“What they are doing is to mortgage 75.6% of our mineral revenue going forward forever for this so-called Agyapa Company. Mr. Speaker, the question is if President Akufo-Addo, Ghana was your company and you were the board chairman, would you bring this document for us to approve? You get US$200 million per annum and you insist that you want to take US$500 million and seize US$140 million per annum to a so-called SPV.”
“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 concluded by reiterating the Minority’s stance 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.”
But the Minister for Information, Kojo Oppong Nkrumah, justified the agreements and explained the rationale for the approach towards monetizing gold royalties.
“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.”
The Minister continued: “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.”
Even though the Minority, since yesterday, [Friday] has expressed disapproval with this new development, the government believes this will go a long way to better the country.
The Member of Parliament for the Sekondi constituency, Andrew Egyapa Mercer, earlier explained that the government is seeking to channel its portion of the royalties into better use for the benefit of the country.
“It is government’s portion that it gets annually that it is seeking to set up an SPV pursuant to the Minerals Income Investment Act 2018 which set up the Minerals Income Investment Fund to put the SPV on the London Stock Exchange, raise equity of up to 49 percent, equivalent to about US$500 million, to enable government spend those funds without paying interest or increasing the debt stock of the country and use those revenues to fund its development agenda,” he said on Eyewitness News yesterday.
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, Egyapa Mercer insisted that the supposed change of name of the company was false.