The Minister-designate for Finance and Economic Planning, Ken Ofori-Atta is convinced that leveraging natural resources into equity in the form of Agyapa Gold Royalties Deal is a smart strategy to address the new normal in which there seems to be quite a bit of debt by all countries occasioned by the devastating effect of COVID-19 pandemic.
According to him, the complex financial transaction which has been reviewed following concerns by some stakeholders will be in the best interest of the country.
“Imagine we have this Royalty Company which in 20-30 years becomes more than $30 billion company which we have more than 50% stake….Imagine putting this balance sheet to the Bank of Ghana. You will literally have a reserve currency which changes your economy.
“I hope we are all going to come to terms with the reality of diversifying how we capitalize and fund our nation as we intend to do,” he stressed.
Speaking at his vetting by the Appointments Committee of Parliament Mr Ofori-Atta said the government has good intentions for the country hence introduced the Agyapa deal to make more money from the country’s gold royalties to propel Ghana’s growth.
“As we look at the new normal in which there seems to be quite a bit of debt by all countries, what do we do to our natural resources to leverage it into equity? And I think that is a question we have to face.
“As to how that is mobilized and the issues to contend with, I think that is the more reason why the President want to submit the new deal to Parliament so that the issues are discussed.
“But philosophically, I hope we are all going to come to terms with the reality of diversifying how we capitalize and fund our nation as we intend to do,” he stated.
He rejected accusations of conflict of interest following the involvement of Databank in the Agyapa Royalties deal.
“I don’t think there was any conflict of interest … because I was not part of the decision.”
He added “I think the first-class nature of that institution speaks to itself. I think a Ghanaian entrepreneur ingenuity has brought it this far. It must be praised and we should be encouraging our companies to grow so that we can begin to do the Eurobonds ourselves.”
Responding to, the then Special Prosecutor, Martin Amidu’s corruption risk analysis opinion on Agyapa, the Minister-designate for Finance and Economic Planning said Mr Amidu did the country and its democracy a disservice for releasing his report on the Agyapa royalties agreement without including in it a response from the Finance Ministry.
“There is a bit of cynicism around the Agyapa transaction, For such a report to be put out in the public [domain] without us or myself as Minister of Finance having a chance to discuss it, is a disservice to our democracy,” he stated.
According to him, the various “conjectures in the report are inimical to growth, and it does not help the kind of freedom of policy orientation and innovation that we require for this country to grow”.
“I have no interest in breaching the constitution. Let’s get into a narrative of questioning whether current uses of our resources are the best way to use it and find a way to get more equity into our system and ensure that we follow the rule,” he reiterated.
He used the opportunity to defend the work his Ministry and the various institutions engaged in the deal put in prior to the approval by Parliament.
The Agyapa royalty was a gold royalty company and its main purpose was to offer financing to gold mining companies that wanted to develop new mining projects in exchange for royalties or revenue once the mines started producing gold.
The rational for the transaction is to create and launch Africa’s first gold royalty company and showcase Ghana as the premier destination for gold assets and resource mining, whilst raising non debt funding for capital investment.
This a sure way to attract investment into the sector, increase exploration activity, provide financing to owners of mining concessions looking for equity type of financing to develop their mines and bring them to production as well as ensure rural development.
Income from this transaction will be used in four main areas, health, education, road infrastructure and housing.
Mining communities would be prioritized to benefit from these projects.
Part of the proceeds would also go to support the new National Development Bank as well as the Ghana Infrastructure and Investment Fund.
When listed Government of Ghana through the Mineral Income Investment Fund (MIIF) would be the majority shareholder with at least 51% of the shares.