Government resorting to Agyapa deal because it is broke – Awuah-Darko

A former Chief Executive Officer of the Bulk Oil Storage and Transportation Company Limited (BOST), Kwame Awuah-Darko, says the Akufo-Addo administration is pursuing the Agyapa Royalties deal “because Ghana is broke.”

“It is not because of any high idea of playing at a certain level. The government needs money and it needs it today,” Mr. Awuah-Darko insisted on The Point of View on Citi TV.

“Because under what circumstances do you start listing your future income? You are listing your future income because you can’t wait for that. We need the money today,” he added.

Ghana’s debt stock rose to GHS255.7 billion, as of June 2020 and Mr. Awuah-Darko noted that 155 percent of Ghana’s revenue is being used to pay for wages, salaries and interest on debts.

In his view, Ghana is in an economic crisis and is “technically HIPC [Highly Indebted Poor Country].”

But he argued that the government is not proposing adequate solutions to the economy’s struggles.

“The only way you can fix our fiscal [issues] is to increase the wealth of your citizens so you can tax them. When you tax them, you can pay down your fiscal value.”

About the Agyapa deal

In 2018, Parliament passed the Minerals Income Investment Fund Act 2018 which establishes the Fund to manage the equity interests of Ghana in mining companies and receive royalties on behalf of the government.

The purpose of the fund is to manage and invest these royalties and revenue from equities for higher returns for the benefit of the country.

Based on a preliminary assessment, the government has valued Ghana’s royalty rights at $1 billion.

Some independent observers have estimated the royalty rights as being valued between $1.6 billion and $3 billion.

The government then, through the Minerals Income Investment Fund (MIIF), set up Agyapa Royalties Limited to monetise Ghana’s gold royalties.

This was after Parliament on August 14, approved the Agyapa Mineral Royalty Limited agreement with the government of Ghana despite the walkout by the Minority.

In exchange, the company plans to raise between $500 million and $750 million for the government on the Ghana and London Stock exchanges to invest in developmental projects.

 

 

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