Having generated loads of controversies during his first term, many observers thought the idea of the Agyapa Royalties deal has been killed and cremated by the New Patriotic Party administration but President Nana Addo Dankwa Akufo-Addo yesterday advertised his government’s intention to engage the 8th Parliament on the future of the transaction.
Speaking in Parliament yesterday, during his delivery of the State of the Nation Address of his second term, the President said “let me, at this point, assure the House that, in the course of this session of Parliament, Government will come back to engage the House on the steps it intends to take on the future of the Agyapa Transaction”.
Ahead of the President’s latest announcement, to the House, Members of Parliament have since last year August been bombarded with a number of petitions from some Civil Society groups who called for an outright rejection of the deal.
The transaction gained a parliamentary approval despite a walk-out by the opposition.
It would be recalled that an alliance of some 25 organisations – including Ghana Integrity Initiative, Transparency International’s national chapter – called on Parliament to roll back the transactions.
In an attempt to raise capital , Government embarked on a plan to leverage the country’s gold royalties in what it has called an “innovative financing solution.”
Under the plan, Ghana will assign a significant portion of its future gold mining royalties to an offshore company it has created in return for cash up front (estimated at approximately USD 500 million).
The government plans to raise the money by listing the company on the London and Ghana stock exchanges while retaining majority ownership.
Despite the current outcry, the plan has been in the works since 2018 with the passage of the Minerals Income Investment Fund Act. The act established a corporate government entity called the Minerals Income Investment Fund. The fund has the right to receive and invest mineral royalties and other related income that Ghana receives from mining companies. Pursuant to the act, the fund created a royalty company called Agyapa Royalties Limited (Agyapa) in Jersey. Under a series of complex agreements approved by parliament , the fund has allocated the rights to just over 75 percent of royalties from several gold mining leases to Agyapa’s wholly owned Ghana subsidiary, ARG Royalties Ghana Limited (ARG) for $1 billion. These leases represent most of Ghana’s current gold production. The fund has assigned this money to Agyapa as consideration for Agyapa’s shares. The fund plans to then raise capital by selling 49 percent of these shares on both the London and Ghana stock exchanges in an initial public offering (IPO).