September 23, 2020

Agyapa deal: Why should a national transaction be shrouded in secrecy – Togbe Afede

The President of the National House of Chiefs and Agbogbomefia of the Asogli State, Togbe Afede XIV has joined the national debate on the Agyapa Royalties deal.

He has subsequently questioned the decision to set up the deal in a tax haven of Jersey.

To him, “Tax havens typically serve two purposes, helping you to avoid tax or ensure secrecy.

“I don’t see why a national transaction should be shrouded in secrecy in the first place.”

“And if we are trying to avoid tax or minimize tax, whom are we denying tax payments to.”

“If it is incorporated in Ghana, tax will accrue to Ghana, which will be paid by this company, that is owned, supposedly, majority by Ghana, so I do not see why we should do an investment but more important for me is the attempt to use my name and the National House of Chiefs to grant legitimacy to this transaction,” Togbe Afede said.

He made the comments at the meeting of the Volta Regional House of Chiefs on Wednesday, September 2, 2020.

He was reacting to some publications that had suggested that he had earlier commented on the deal and also condemned former President John Dramani Mahama for endorsing and sharing a Facebook post by the Member of Parliament for Bolgatanga Central, Isaac Adongo that some said was ethnocentric.

Togbe Afede called on the public to disregard publications using his name in an attempt to legitimize the Agyapa deal.

Agyapa deal in Ghana’s interest – Finance Minister

The government has maintained that the approval of five agreements to allow a special purpose vehicle (SPV), Agyapa Royalties Limited, to leverage Ghana’s mineral royalties to secure about $1 billion is in the best interest of Ghana.

The Minister of Finance, Mr Ken Ofori-Atta, has explained that the deal would allow the government to leverage Ghana’s mineral royalties to finance large infrastructural projects, especially in mining communities.

The minister has subsequently dispelled some public assertions that the deal was shrouded in secrecy and raised conflict of interest issues.

He has stressed that due procedure was followed in enacting the Minerals Income and Investment Fund (MIIF) Act, 2018 (Act 978) and the subsequent approval of the five agreements that paved the way for Agyapa Royalties to own the rights to mineral royalties in the country.

“This deal is not hasty, it is not rushed and not shrouded in any secrecy because we have been working at it since 2018. We are confident that Agyapa is going to be the largest company in Africa in the mineral royalty space and it is in the best interest of this country,” the Minister stressed.

The agreement

On Friday, August 14, 2020, Parliament approved five agreements to allow the country to derive maximum value from its mineral resources and monetise its mineral income accruing to the state in a sustainable and responsible manner.

That would be by allowing the MIIF, created by Act 978 of 2018, to incorporate a subsidiary/subsidiaries and use them as SPVs to engage in pure commercial private sector transactions to maximise the mineral royalties from the 12 gold mines, with four penciled to come on stream in the medium term.

The approval covered the Minerals Royalties Agreement, the Amended and Restated Minerals Royalties Investment Agreement and the relationship agreement among the government, the MIIF, Agyapa Royalties Limited and ARG Royalties Ghana.

The rest are the assignment agreement between the MIIF and Agyapa Royalties for the assignment of the right of the fund to Agyapa to receive the royalty value due from ARG under the investment agreement for the acquisition of the allocated minerals royalties from the fund in consideration for shares to be issued by Agyapa to the fund at an agreed price of $1 billion.

The approval was to enable the country to use Agyapa Royalties as an SPV to secure about $1 billion and leverage to finance mines in Ghana and across Africa.

The yields accruing could also be used to finance large infrastructural projects by the MIIF.

By that agreement, Agyapa, which will operate as an independent private sector entity, will be able to raise funds from the capital market, both locally and internationally, as an alternative to the conventional debt capital market transactions.

The funds, which are expected to be raised from the Ghana Stock Exchange (GSE) and the London Stock Exchange (LSE) through initial public offers (IPOs), will be a long-term capital, without a corresponding increase in Ghana’s total debt stock, and hence without a public debt repayment obligation.


However, following the approval of those agreements, some groups, including the Minority in Parliament, the National Democratic Congress (NDC) and some civil society organisations (CSOs), have raised concerns that the agreements were opaque and amounted to the mortgaging of the future of Ghana.

The opposition NDC raised concerns that the deal was shrouded in secrecy, with its flag bearer, Mr John Mahama, serving notice that he would cancel the deal if he won power.

Additionally, a coalition of 15 CSOs called the Alliance of CSOs working on Extractive, Anti-Corruption and Good Governance, is demanding the immediate suspension of the implementation of the controversial SPV, Agyapa Royalties Limited.

The coalition said until there was full disclosure on the beneficial ownership of Agyapa Royalties, the implementation of the deal should be deferred.

Agyapa Royalties goes public – Listing on Ghana, London stock exchanges by December

The Minerals Income Investment Fund (MIIF) is racing to float shares of its special purpose vehicle (SPV) on the Ghana and the London stock exchanges before the end of the year.

The main subsidiary of the MIIF and holding company, Agyapa Royalties Investment Ltd, will be listed on the London Stock Exchange (LSE), while its subsidiary, ARG Royalties Ltd, will be quoted on the Ghana Stock Exchange (GSE), both through initial public offers (IPOs).

Below is a copy of the post by Isaac Adongo shared by gormer President Mahama on Monday, August 31, 2020.

Togbe Afede’s reaction

Following this, some publications suggested that the National House of Chiefs and its President, Togbe Afede XIV had commented on the issue in a press statement.

Addressing the Volta Regional House of Chiefs on Wednesday, September 2, 2020, Togbe Afede said he has not commented on the deal and urged the public to disregard publications associating his name with the deal and the subsequent comments.

Togbe Afede who is the Agbogbomefia of the Asogli State, said the publication which made rounds on Tuesday was extremely mischievous, untrue and must be disregarded.

“I, in particular, I’m very much hurt by the attempt to use my name to grant legitimacy to a transaction that has been very widely condemned for its secrecy and for the fact that the company involved, Agyapa was incorporated in a tax haven.”

“I do not see why desperation will lead anybody who is associated with that transaction to want to use the name of innocent Togbe Afede XIV. I have never commented on this transaction and I decided not to comment for good reason, that show disapproval of this transaction.

“Tax havens typically serve two purposes, helping you to avoid tax or ensure secrecy, I don’t see why a national transaction should be shrouded in secrecy in the first place.”

Togbe Afede subsequently condemned the publications.

Read also: Stop using my name to legitimize Agyapa deal – Togbe Afede

He said there were three publications in total – two of which were in the name of the Volta Regional House of Chiefs and the third one in the name of the National House of Chiefs.

In the first publication, he said the Volta Regional House of Chiefs was alleged to have blasted the National Democratic Congress (NDC) and alleged that the House had said that it was tired of the NDC.

The second one, he said was labelled “Announcement to all Voltarians,” which was supposedly from Volta Regional House of Chiefs to the effect that, since 1992 the Volta Region has supported the NDC because of former President Jerry John Rawlings and had not received anything from the support.

“I have issued a press statement in the name of the Asogli State to disassociate myself from those publications because some of them came with my picture so we have written to deny that any such statement was issued by Chiefs of the Volta region,” he added.

On the Agyapa royalties controversy, Togbe Afede noted that neither the House of Chiefs nor himself has made any comments on it.

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Source: Politics