A Deputy Minister of Finance, Charles Adu Boahen has accused critics of the Agyapa Royalties mineral agreements, which seeks to leverage Ghana’s gold royalties to raise capital on the London and Ghana stock exchanges, of lacking understanding of the current deal hence their opposition.
His claim follows misgivings from some stakeholders about various aspects of the deal including the amount being targeted to be raised, the incorporation of the lead company in a tax haven among others.
But speaking on the issues surrounding the agreement on the Citi Breakfast show, Charles Adu Boahen explained that the agreement will eventually lead to government getting much needed funds to invest in a myriad of developmental projects.
“The other thing they seem to raise was the fact that we are only raising five hundred million cedis today. The royalties flows we get are in excess of over a hundred and twenty million dollars. Essentially, what they are saying is that, for the five hundred million, we would have to be paid in four years to invest it. So, essentially, we are raising money in exchange for four years of flows whereas they are signing these flows for the lifetime of the mines. That shows that they didn’t really understand the transaction. Of the total royalties we receive every year, twenty percent goes to mineral development fund which is a statutory requirement,” he said.
Mr. Adu Boahen also added that the company will look to raise more than the initial amount targeted now in the near future.
“You raised another point about it being quite low but this company is going to grow. So, right now, we do thirty percent shares and we raise five hundred million. In a year or two, we would have accumulated some amount of additional royalty streams and the company would have established its track record and the valuation of the company will have doubled or increased because of the established track record,” he said.
Background of Agyapa Royalties Limited
The Government of Ghana, through the Minerals Income Investment Fund, set up a limited liability company, Agyapa Royalties Limited to receive money Ghana which is supposed to earn from gold royalties.
In exchange, the company will be raising between $500 million and $750 million lump sum for the Ghana Government on the Ghana and London Stock exchanges to invest in developmental projects.
Already, the Minority in Parliament boycotted the approval of the agreement in Parliament last week saying it will shortchange Ghanaians.
Also, the NDC flagbearer, John Mahama described the deal as questionable whilst a presidential aspirant of the Progressive People’s Party (PPP), William Dowokpor, called it fraudulent.
Minerals Income and Investment Fund defends Agyapa Royalties deal
Meanwhile, the Minerals Income and Investment Fund (MIIF) which formed the company defended the integrity of the agreement establishing Agyapa Royalties. It stated that it such a task is a “forward-thinking” endeavour, and is in the best interest of Ghanaians.
Click below to listen to the full interview: