Home Business Agyapa Deal Is Opaque …& Risky For Ghana – Terkper Posits

Agyapa Deal Is Opaque …& Risky For Ghana – Terkper Posits

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The former Finance Minister, Mr. Seth E. Terkper has raised two major concerns in the area of transparency and a high risk Anti-Money Laundering (AML) factor surrounding the on-going public discourse on the Agyapa/Asaase Minerals Royalty deal

Readers will recall that the last act of Parliament at the last sitting was to approve the setting up of a Minerals Income Investment Fund (MIIF) in a Tax Haven which generated a heated debate on the floor of parliament where the Minority pointed out the elevated risk in placing a second Sovereign Wealth Fund (SWF) in a haven. The Minority also indicated that this particular arrangement in question sharply contradicts and duplicates the role of, the Ghana Infrastructure Investment Fund (GIIF) which is the first sovereign investment arm.

At a press conference in Accra, the former Finance Minister recounted that in May 2020, the European Union (EU) placed Ghana under its Anti- Money Laundering (AML) list but due to the COVID-19 situation, the EU deferred the implementation date to October 1, 2020 “and instead of giving an update of measures to remove this stigma on Ghana, the NPP rather chose to elevate the risk by setting up a SWF in a Tax Haven.”

He said, the risk is real and from 2010 up until 2016, the NDC took many steps to avoid (Ghana)being placed on the Organization for Economic Co-operation and Development’s(OECD) AML and Tax Haven watch-list which was as a direct result of the previous NPP government’s financial services center law in the late 2000s.


Below are the Key pointers to the former Finance Minister’s issues raised above:


Why a Tax Haven elevates Ghana’s AML risk

Individuals and businesses use Tax Havens to hide income and wealth to avoid paying taxes and scrutiny of shady transactions. The EU and OECD use evidence of these activities to sanction States that do not take appropriate measures to stop these practices.

Hence, it is ironic that the government itself will contemplate setting up MIIF, not just its investments, in a Tax Haven.


Why MIIF is not a transparent SWF

The Majority were unanimous in vilifying the Minority as unpatriotic when they drew attention to these risks. Yet GoG had refused to provide the House with the Incorporation documents and Prospectus that form the bases for ownership of Agyapa Royalties and MIIF’s authority to invest and contract loans for Ghana.

It also refused to furnish the House with projected cash-flows and returns on investment for contracting loans. This is contrary to Article 181(5) of the Constitution.

Some of these document have now become public knowledge, from external sources. To date, this Government has not provided the House with the Prospectus for the 2017 Franklin Templeton domestic Bonds, a document it described as “market” sensitive.


MIIF was missing in 2020 Budget and Mid-Year Review

Early in August, Parliament approved the 2020 Supplementary Budget that adjusted amounts in in the 2020 Budget and Appropriation Act. Yet the 2020 Budget states clearly as follows:

“The monetization of the Mineral Royalties a priority project for the Government. Significant progress has been made since the inauguration of the MIIF’s Board by the President in October this year (2019). The anticipated monetization proceeds will complement Government’s sources of financing for the Budget”.


State could use a single Ghana Investment Fund

The commitment of the current Government to setting up a credible Investment Fund for Ghana is unclear. Since 2017, despite inheriting three (3) Oil Fields, it stopped distributing the petrol funds and VAT revenue to GIIF—in defiance of the GIIF Act. However, as with the other petrol Funds, it continues to deplete the balance that past governments built with only one (1) oil field.

The use of a Tax Haven as location for an investment fund, while under AML scrutiny, is risky for Ghana. It is against this background that a future NDC administration will use GIIF, as the single Investment Fund, to leverage the markets for investment, as it did with Terminal 3.






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