The Africa Policy Lens (APL) has urged citizens, civil society organisations and anti-corruption institutions to stand up against the President Mahama government’s strange decision to reduce a mutually agreed 10% lithium royalty rate for Ghana by the previous government to 5%.
In a statement yesterday, the APL said the government’s claim that the previous government acted illegally, in a bid to justify its strange reduction of the royalty rate smacks of corruption.
Read excerpts of APL’s statement: “The foregoing analysis demonstrates clearly that the previous government acted appropriately in securing what remains Ghana’s most advantageous mining agreement to date,” the APL said after giving a detailed background to how the previous government they reached the 10% mutual agreement.
“Assertions by the current government regarding lithium pricing and the legality of the lease are not only misleading but also raise serious concerns that should engage the attention of citizens and anti-corruption agencies. Should the proposed reduction of the royalty rate from 10 percent to 5 percent be implemented, Ghana stands to forfeit millions of dollars in revenue.”
“Such an outcome would exemplify a corruption-tainted mineral agreement frequently cited in natural resource governance discourse. Moreover, lowering the royalty rate confers legal standing on the company that could complicate future upward adjustments, potentially triggering arbitration under international investment treaties.”
The APL, while hitting out at government for engaging in PR stunt in the justification of its strange move, also urged Parliament not to consider the new proposal, but rather consider the old terms, including the 10% royalty rate reached by the previous government.
“It is therefore imperative that Parliament either ratifies the original lease secured under the NPP government or ensures that any revisions strengthen Ghana’s position. Temporary fluctuations in commodity prices must not serve as justification for weakening fiscal terms.”
“It is particularly troubling that state institutions appear to be advancing public relations narratives favourable to a mining company rather than safeguarding the national interest.”
The previous government reached a mutual agreement with Barari DV Ghana Limited for an upward 10% royalty stake for Ghana.
However, the NDC, which criticised the 10% upward royalty rate in opposition as too low, has now, in government, proposed a reduction from the agreed 10% to 5%, with a claim that the previous government acted illegally in negotiating a higher royalty rate for the country.
The strange stance of the NDC and Mahama government has raised eyebrows, with many questioning how a government, which is supposed to defend the interest of the nation, is rather vehemently pushing for a reduced stake, contrary to its position in opposition.
