The Chief Executive Officer (CEO) of the Minerals Income Investment Fund, Edward Nana Yaw Koranteng, has disclosed that, government spent $12 million on Agyapa royalties deal before its suspension.
He disclosed this information during a Public Accounts Committee (PAC) Sitting on Tuesday, February 13, 2024.
According to him, the money was spent on the processes to issue the initial public offering on the London Stock Exchange before the suspension, thus, the Ministry of Finance had subscribed to the deal based on advice from international consultants.
“My understanding, honorable chair, is that the Ministry of Finance procured the services of international consultancy and companies and financial institutions that have done this in the past and that the advice provided was what the Ministry of Finance stood on”, Mr. Koranteng said.
“We started with the Ministry of Finance and from the documents that we have, it is clear that the correct advice was provided on the set-up of a gold royalties company where the streaming of the royalties would benefit Ghana,” he added.
BACKGROUND
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).
SUSPENSION
President Nana Addo Dankwa Akufo-Addo ordered the suspension of the Agyapa deal in 2021 following concerns raised by civil society groups and the main opposition National Democratic Congress (NDC).
