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Monday, July 4, 2022

Agyapa deal: Gov’t must justify low pricing of gold resources

The Executive Secretary of Africa Centre for Energy Policy, Ben Boakye, has called on the government to justify what he calls the low pricing of Ghana’s gold resources as part of the proposed Agyapa deal.

Mr. Boakye, who is a member of the alliance of civil society organisations in the extractive, anti-corruption and good governance, noted the 48 leases under the deal contribute about 98 percent of Ghana’s gold revenue.

“So for anybody to think that we can price that resource at $1 billion or between $500 million to $750 million, you really need to come to the table and justify why you think we can price that asset at that low price.”

“Within the past two years, we have made about $430 million, so how then does anybody decide that that revenue stream can be priced at $1 billion for the rest of the life of the mine,” Mr. Boakye said.

He also noted that leases could also be home to other future projects aside from gold.

“If we happen to get 50 or 60 projects on these 48 leases, what we are saying is that Agyapa for the fact that somebody has given us $500 million to $750 million, will remain an interested party and benefit from any royalties that will result from these leases.”

Mr. Boakye further called on the public to show interest in the matter because the Agypa deal is “such a significant revenue stream.”

Background

The government through the Minerals Income Investment Fund, set up Agyapa Royalties Limited to securitize Ghana’s gold royalties.

Under the deal, Ghana was to own 51 per cent of the Jersey-based company Agyapa Royalties and the remaining shares would be listed on the London Stock Exchange.

In return for securitizing the future revenues, the government has argued that it could raise at least $500 million in capital to ease its growing debt crisis and invest in developmental projects by listing the remaining 49 percent of shares.

But the government was criticised for not being transparent with the deal.

A subsequent corruption risk assessment by the then Special Prosecutor, Martin Amidu, further compounded the woes of the deal.

Among other things, Amidu concluded that the Agyapa Royalties deal, violated multiple laws whilst the appointment of transaction advisors, did not meet the “fundamentals of probity, transparency, and accountability.”

Though the President instructed the Finance Minister to re-submit the deal to Parliament in light of the report, Martin Amidu, claimed the President tried to interfere in the deal and subsequently resigned.

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