Category: News

 

The National Petroleum Authority says plans are underway to ensure that the Cylinder Recirculation Module takes effect from the second quarter of next year.

During a familiarization tour of the Central Region, Chief Executive Officer of NPA, Mustapha Abdul Hamid, said several factors contributed to the delay in the implementation of the initiative.

He explained that the Authority initially started a pilot project in six regions but suffered some setbacks in the area of the turnaround rate of the cylinders and the lack of bottling plants across the country.

He added that all challenges associated with the implementation will be addressed by the second quarter of next year to pave way for full operationalization of the module.

“The NPA started a pilot project on the recirculation module in six regions, but to confess, the project suffered some setbacks because of the turn around rate of cylinders. This was because we had very little cylinders in the system to commence the operation, and the NPA is working to ensure that effective next year, the module takes effect. There was also the challenge of the bottling plants. As of now only one company has been able to establish a bottling plant, but two more have been licensed. We are hoping that by next year, they will all begin full operation and CRM will begin full operation,” Mr. Hamid told Citi News.

He said the ban on the establishment of gas service stations across the country is before cabinet waiting for the necessary road map to be implemented.

The NPA boss who was in the company of other directors of the Authority visited the site for the construction of the ultra-modern NPA office in the region.

The team also paid a courtesy call on the Oguamanhene, Osaberima Kwesi Attah II, where deliberations were held to ensure that the operations of the authority remains successful in the region.

They also engaged the Regional Police Command on ways to support the NPA in its operations in the region to ensure that service stations go according to the laid down processes outlined by the authority.

“The police are our partners in terms of monitoring the downstream petroleum industry in the Central Region. We have had very good interactions with them and going forward we are hoping to work together,” Mr. Mustapha Hamid said.

 

Adnan Adams Mohammed

Starting January next year, employers who submit their employees pension contributions reports without Ghana card ID numbers risk being penalized, the Social Security and National Insurance Trust (SSNIT) has said. 

The Trust specified that, contributions from members without without Ghana card would be rejected and subsequently penalized for delayed payment of contributions. 

Government has began migrating all  existing national identification numbers onto the National Identification card, also known as Ghana card. In line of this, SSNIT on June 28, 2021, began processes to merge all SSNIT numbers to the Ghana card. The merger is also in compliance with Regulation 7 (1) of the National Identity Register Regulations, 2012, L.I. 2111 and a directive from the National Pensions Regulatory Authority (NPRA).

 “We communicated and said that by January 2022, you cannot submit contribution reports without NIA numbers”, Director-General of SSNIT, Dr. Ofori Tenkorang has said at an employers’ breakfast meeting organised by his outfit, last week. “And if you do submit the reports without NIA numbers, that report will be rejected. And the payments if not made on time, you know what it means, it attracts penalties and so on and so forth.”

He added that “we have given a transition period from July to December to get this done. I am imploring you to make sure, each time you are submitting your contributing report, please check to make sure that every employee on the contribution report has their Ghana Card number also on that report. I beg you, let’s get that done way before the end of this year so that come January we are not going to have any of these problems”.

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The intended merger is expected to improve the ease of doing business with the Trust by enabling a convenient means to allowjjj members to use one card, that is the Ghana Card, for all transactions.

So far over one million SSNIT contributors have had their unique scheme numbers merged with the Ghana Card since the start of the exercise.

Although the numbers are encouraging, Dr Tenkorang urged persons who are yet to pull through to do so soon before the grace period elapses.

 

Adnan Adams Mohammed

Most often the government’s negotiating team from the ministry of finance justify that, Resource Backed Loans are cheaper than going to borrow from the debt and bond market, but, Dr Steve Manteaw disagrees. 

The Co-chair of the Ghana Extractve Industry Transparency Initiative (GHEITI), has called on government to really do a proper cost-benefit analysis of all RBLs and put values on the intangibles and then do comparative analysis among available options of debt instruments before concluding that RBLs are cheaper. 

According to statistics made available by the expert, RBLs, mostly attracts as high as 4 percent interest aside the environmental cost, resettlement cost, wildlife lost cost, other natural resource (timber) lost cost among others. All this cost quantified might exceed the 6% to 7% interest attracted to bonds and debt instruments.

“I will becareful going for RBLs”, Dr Manteaw stressed in an during the NRGI/ACEP Public Dialogue on Resource Backed Loans in Ghana session in Accra, last week. “It has a whole lot of issues to be considered always ranging from environmental and sustainability cost, to corruption risk monitoring to expenditure/investment abuse tracking and selecting prioritized projects.” 

 

The public dialogue discussed issues of opportunities and risks of RBLs and how to efficiently utilize RBLs as a financing tool; examine the structure of RBLs in Sub-Sahara Africa, governance challenges, and how lessons will inform the design of future deals to ensure value for African countries; and propose recommendations for effective RBL arrangement, governance, and oversight in resource-rich

SSA countries.

The lead speaker, Denis Gyeyir, NRGI African Region Policy Advisor, in his presentation indicated that, “RBLs are of particular importance—they are the intersection of extractives transparency and debt transparency. Momentum around greater sovereign debt transparency is building [especially in post-COVID-19 pandemic context], and this can only benefit the governance of natural resources. Access to information about past deals and similar arrangements across the region will enable Ghana to better structure and negotiate.” 

He noted that, it is for such reasons that more transparency regarding the structure and governance, terms of agreements, repayment conditions among others are important. “These disclosures will enrich public discourse and help highlight the impact of these arrangements on public finances, project execution and corruption risks associated with RBLs. 

“NRGI and ACEP seek to organize a public dialogue on RBLs in Ghana learning from the experiences of SSA resource-rich countries. 

“The dialogue seeks to examine the risk and opportunities for leveraging the continent’s extractive resources for development. The dialogue will leverage recent scholarship on RBLs to facilitate the conversations. This includes NRGI’s global research on RBLs, NRGI and ACEP analysis into Ghana’s proposed integrated aluminum industry, IMANI’s alert on the bauxite-barter deal, and several others.”

Ghana in 2011, barely a year after commercial oil production began, signed a US$3 billion commercial loan agreement with the China Development Bank (CDB), out of which US$1.5 billion was eventually disbursed to fund the Western Corridor Gas Infrastructure Project. As part of the arrangement, China International United Petroleum & Chemicals Co., Ltd. (UNIPEC) Asia, a wholly owned oil trading subsidiary of China Petroleum & Chemical Corporation (SINOPEC) was to lift 13,000 barrels per day of Ghana’s unencumbered Jubilee crude oil entitlement for 15 years. 

Similarly, in 2018, Ghana’s government entered into a reported US$2 billion agreement with Sinohydro Corp, a Chinese state-owned hydropower and construction company. Under a Master Project Support Agreement (MPSA), Sinohydro is
meant to finance and execute the construction of infrastructural projects in Ghana. In return, Ghana would repay the loan amount by granting access to 5% of Ghana’s bauxite reserves and earnings from yet-to-be established refined bauxite. The first tranche of US$649 million is reported to have been disbursed, and would be spent in constructing various road projects. 

Also, in 2020, the government of Ghana attempted a controversial sale of its interest in future gold royalties to private investors through a stock exchange listing — the so-called ‘Agyapa’ mineral royalties deal. 

Others in the region are: the “Oil for Infrastructure” scheme during President Olusegun Obasanjo’s presidency, under which Nigeria sought to offer oil blocks to Chinese bidders in exchange for major infrastructure projects cumulatively valued at US$20billion. Some of these projects included railway network from Lagos to Kano and a hydroelectric power station in Mambilla. However, this scheme was aborted when power changed hands. Similarly, in Angola under the National Reconstruction Program, the government agreed a US$2billion oil backed loan with the Chinese for infrastructure in 2004. 

Across these experiences, the criticisms often highlight lack of transparency and threat to debt sustainability. 

Despite some of the controversies, these RBL arrangements have provided an opportunity to develop and expand infrastructure in beneficiary countries. Ghana’s CDB loan for instance helped to eliminate the dreaded practice of gas flaring and gas reinjection while guaranteeing relatively cheaper natural gas supply for power generation and industrial use. While these loans can address burning development challenges, they can pose setbacks to the economy. 

As expressed earlier in some of the critiques, these loans provide an avenue to sign opaque deals, create repayment challenges and limit benefits to borrower countries. For instance, with the CDB Loan, China began to demand for more security with the plummeting oil prices in late 2014/15 as a condition for Ghana to access the entire US$3 billion. 

These experiences raise an interesting question: how have SSA resource-rich countries learned from the challenges of RBL to inform the structuring and negotiation of future RBL-type deals? For example, Bloomberg is already predicting that Ghana would have to use other sources to service the Sinohydro loan if the aluminum project fails to do so. 

In April 2021, AidData released a trove of loan agreements between Chinese entities and sovereign borrowers in developing countriesincluding several Ghanaian loan agreements and the Sinohydro bauxite agreement. They found 100 publicly available Chinese loan agreements in 24 countries. One key finding of their report in a blog by NRGI “is the widespread use of far-reaching confidentiality clauses in the Chinese loan agreements meant to restrict borrowers from disclosing loan information. 

This confirms worries about opacity and the need to rein in confidentiality provisions in sovereign debt agreements, as previously highlighted”. For instance, Ghana’s MPSA with Sinohydro provides for non-disclosure of the terms of the agreement without prior approval of the other party, except compelled by law. The debtor (Ghana) is also required to open an offshore account (escrow) to serve as an exclusive account through which all receipts from refined bauxite are paid. The account must hold enough funds to meet at least two repayment obligations.

Adnan Adams  Mohammed

Natural Resource Governance experts have bemoaned the current piece meal approach successive governments have used to draft, negotiate, sign and implement all three Resource Backed Loans for the last 14 years. 

The experts believed that, by now any serious country would have a policy to guide how its resources are used as a guarantee for a key governance funding such as infrastructural investment. 

Ghana since 2007, under the regime of President J.A. Kuffour, contracted the first RBLs (an exim facility from China) which was used for the construction of the Bui dam. Subsequently, The Prof Atta Mills/John Mahama government in 2011 also started the China Development Bank RBLs facility used for the Ghana Gas project by Sinopec and the third one is the Ghana Bauxite – Sinohydro facility. In all, about US$5.6 billion value of RBLs have been signed with a policy guiding the process.

“It is really worrying to hear from a government official that, the country has no policy on RBLs after the third contract”, Daniel Gbondo, Mining Policy Advisor at the Ministry of Mines and Mineral Resources, Sierra Leone said during a panel discussion at the NRGI/ACEP Public Dialogue on Resource Backed Loans in Ghana in Accra, last week.

The Mining Policy Advisor called on his Ghanaian counterpart in the West African sub-region to as a matter of urgency put together a policy framework to give holistic direction on the engagement, negotiation and expenditure process on RBLs. 

Dr Steve Manteaw, a giant natural resource governance expert, although not as much worried with the absence of a policy document on RBLs, but called on the government machinery to swiftly consider getting one. 

      

Several resource-rich developing countries have increasingly in the last few decades sought to leverage their resource endowments to finance development. Through these arrangements, governments have secured funding in exchange for or guaranteed by future streams of resource income. Oil and minerals are the most common resources often relied upon in such transactions, commonly referred to as resource-backed loans (RBLs). 

In a 2020 NRGI global research of 52 resource-backed loans (RBLs) between 2004 and 2018, 30 RBLs were entered into by Sub-Saharan African (SSA) countries and another 22 in Latin America using mainly oil and mineral resources. Sub-Sahara African countries that have gone down this path include the Republic of Congo, DR Congo, Sudan, Guinea, Angola, and Ghana. Across the continent, governments have sought severally to use their abundant mineral and oil wealth to fund its massive infrastructure deficit. 

Total financing for infrastructure in Africa is projected to be US$4.3trillion until 2040 with an annual forecasted investment of US$174billion.1 At country level, Ghana’s Ministry of Finance indicates in a recent assessment that Ghana’s annual infrastructure investment will need to reach US$9.3 billion by 2030 (13.9% of 2019 GDP). 

In essence, Ghana’s total infrastructure investment will need to reach US$96 billion (143% of 2019 GDP) by 2040 to attain the sustainable development goals (SDGs). Other SSA country contexts indicate similar significant infrastructure financing needs.2 Given the foregoing and as part of the strategy to bridge the infrastructure gap, SSA countries have signed loan agreements in exchange for extractive commodities. 

Adnan Adams Mohammed

The Ghana Union of Traders Association (GUTA) has downplayed criticisms that, it is not feasible for the proposed establishment of the Ghana Traders Bank.   

Reacting one of the critics, a Banking Consultant, Nana Otu Acheampong, who has suggested that plans to establish Traders Bank should rather be made as a credit union.

Government recently announced that, it has started consultation with traders unions on a plan to establish Traders Bank. But, according to other critics, the Bank will not be able to reduce interest rates to as low as 20 percent as they believe has no scientific basis as traders wished the various existing commercial banks cut their interest as low as 19%. 

“I can say that this is laughable and I don’t know the scientific reason behind this. What did they attribute to the high interest rate?”, President of GUTA, Dr. Joseph Obeng rhetorically quizzed in an interview. “They attribute it to the high risk, the default rate and so if you are able to minimize the default rate to the barest minimum, have you not succeeded in transferring the benefit to the one coming to borrow from you?”.

He explained further that: “The fact that we are also going to minimise our interest rate which is not going to consume the capital or the monies we are lending to our customers then of course our customers will be able to pay.

 

“Most times the interest rate itself consumes the monies given to customers and so payment becomes difficult but if we are able to minimise the interest rate and also do away with bad loans which can be attributed to 40 percent corruption in in the bank itself i.e the inefficiency of the bank and its inability to do the necessary due diligence and they pass it on to otherwise a very good customer and then you share the risk for all of them, how fair is that?”

He noted that with the Traders Bank, “We’re going to do away with it so it’s a simple mathematics and it’s not rocket science.”

Adnan Adams Mohammed

As the Mobile Money services being operated by the telecommunication companies in the country records giant strides in transaction and values, an economist is worried with the overlap of mandated services. 

He questioned how telecommunications companies are taking over banking services in the country. In his view, telcos paying interest on the accounts of mobile money subscribers and offering them loans among other financial services, must be checked.

According to the University of Professional Studies, Accra (UPSA) lecturer, telcos have no such mandate to pay interest and offer loans to customers as the traditional banks and questioned why the Bank of Ghana (BoG) is mute on the activities of the telcos in the financial sector of the economy.

“The telcos are fast-deviating from their core mandate of communications service providers,” Dr Kofi Osei Adu noted and described the development as worrying in the financial sector of the economy that telcos are now playing the roles of traditional banks.

Dr Adu attributed that, it is because the BoG has relaxed the rules of engagement, it has given the telcos the impetus to drift off their mandate.

 

He noted that some of the telcos are reneging on their mandate and focusing more on the mobile money sector.

Mobile money (MoMo) has witnessed significant increase in adoption since its inception into the Ghanaian financial market in 2009. Available statistics by the Bank of Ghana show that between 2012 and 2017, the number of registered MoMo customers increased by 534%, and active MoMo customers increased by 3,119%. 

With this performance, it is expected that MoMo will drive financial inclusion by not only providing users with a service to make money transfers but graduating them to use other forms of formal financial services such as savings, credit and insurance. 

However, little evidence currently exists on the relationship between MoMo adoption and the use of formal financial services nor on the role of Central Bank regulation in facilitating MoMo deployment and adoption. For financial inclusion purposes, it is also imperative to understand the factors driving or inhibiting MoMo adoption among groups who are mostly financially excluded.

Mobile money is a technology that enables financial transactions through mobile phones without a bank account.  It is driving financial inclusion, especially in developing countries. It gives more people a chance to use financial products and services.

In Ghana, there is a policy to encourage the use of mobile money and reduce the flow of cash. And mobile money has proved popular because of its advantages. People can transfer money or make payments wherever they are, in a simple, fast, convenient and affordable way. Mobile money has improved the efficiency of transactions and initiated some changes in traditional banking in the country. By 2017, Ghana had over 11 million active mobile money accounts.

Adnan Adams Mohammed

As the government is preparing to present the 2020 Economic Policies and Budget Statement next week, November 17, 2021, Ghanaian traders wants the government to maintain the  50% benchmark value policy. 

 

The policy, introduced in 2018 was to save businesses, especially, trading from total collapse due to high import duties and high fees and charges at the port.

The Ghana Union of Traders’ Association (GUTA) in their pre-budget reading press statement indicated that, the policy has helped enormously in saving businesses. 

“…it has helped reduced smuggling, as well as ensuring compliance and this enabled the government to exceed its revenue targets over the years”, the statement posited.

GUTA said currently, businesses are in serious distress and finding it difficult to operate, so any attempt to reverse the policy will spell doom to businesses in the country, especially trading, and will cause serious disaffection.

“In fact, the adverse effects of the coronavirus pandemic, which has caused world commodity process to go up astronomically whiles freight charges have also gone up to cover over 650%, has exacerbated the situation,” the statement added.

GUTA, however, noted that it has no objection if the government decides to increase tax on non-essential goods such as alcoholic drinks, cigarettes and other related products that may be harmful to human health.

All things being equal, the Finance Minister, Ken Ofori-Atta, has rescheduled to present the Budget Statement and Economic Policy of the government for the 2022 financial year on November 17, 2021, 

This was  announced in Parliament by the Minister of Parliamentary Affairs, Mr Osei Kyei-Mensah-Bonsu, last week during parliamentary sitting. 

Earlier, the Finance Ministry had announced November 15 as the budget presentation date. The new date limits the number of days needed by parliamentarians to discuss the budget after it is presented. The Minister for Parliamentary Affairs has therefore called on his colleagues to be judicious with time during discussion of the budget.

The budget, among other things, is expected to address some specific taxes and levies which have generated public attention and allocate funds for the various ministries and MMDAs for the year 2022.

 

Adnan Adams Mohammed

A total of almost US$12 million (11,753,021.88) has been approved as tax exemptions for three companies by Parliament, last week.

The breakdown of the amount is as follows: US$11,441,638.32 to B5 Plus Limited under Government’s One District One Factory (1D1F) Initiative. US$311,383.56 to Cascade Development Company Limited and the Gold Coast Resorts International Limited.

The approval followed the Finance of Committee Parliament’s recommendation to the House to approve Government’s request with regard to the tax waivers to the company. The request was laid in the House on Thursday, 10th June, 2021 by the Minister responsible for Parliamentary Affairs Osei Kyei-Mensah-Bonsu on behalf of the Minister for Finance in accordance with Article 174(2) of the Constitution and referred to the Finance Committee for report in pursuant to the Standing Orders of the House.

“The tax waivers for the 1D1F programmes are aimed at creating jobs for Ghanaians through the setting up of factories and industries which will in turn move the country towards greater industrialisation”, Chairman of the Committee Kwaku Kwarteng presenting its report said.

“The initiative will create massive employment particularly for the youth in the affected communities, thereby improving income levels and standard of living as well as promote exports and increase foreign exchange earnings to support the government’s development agenda.”

Article 174 (2) of the Constitution empowers the legislative body to confer power on any person or authority to waive or vary a tax imposed by an Act of Parliament. The exercise of any such power conferred on any person or authority to waive or vary a tax in favour of any person or authority is by the said provisions, made subject to the approval of Parliament by resolution.

In accord, the Ranking member of the Committee Cassiel Ato Forson seconding the motion said the tax waivers will help change the nature of the economy from one dependent on import and export of raw material to one focused on manufacturing, value addition and export of processed goods.

Consequently, the MP for Adaklu, Governs Kwame Agbodza in his contribution entreated the House as part of its oversight responsibility to undertake monitoring visits to companies granted tax exemptions to ensure that the tax waivers granted are not misapplied.

The tax waivers for B5 Plus are in the areas of Import Duties, GET Fund Levy, Import NHIL, Import VAT and EXIM Levy on materials, plants, machinery and equipment or parts to be imported under the implementation of the 1D1F programme. 

Also, the exemptions for the other two companies ( ) are same range of taxes  on materials and vehicles to be procured in the redevelopment of the Accra Race Course including a five-star hotel, shopping mall, office and residential buildings 

B5 Plus is a local company operating under the Government’s One District One Factory (1D1F) Policy which is designed to promote industrialisation, boost investments and create jobs in the country. 

Ghana’s tax regime provides a wide range of exemptions and incentives, designed to achieve specific social and economic objectives, such as promoting investment and employment in certain industries, sectors or geographic regions, encouraging rural development, or reducing the tax burden on certain economic sectors and income groups. 

Apparently, these exemptions approval comes at a time many economists and tax experts are against the tax exemption regime in Ghana. 

A number of studies on Ghana’s tax exemptions regime have concluded that the growth in tax exemptions and reliefs are not only unsustainable, but the benefits to the economy from some of these exemptions and reliefs are doubtful. Not only do some of the tax exemptions provide the opportunity for abuse, they also deny the country of the much needed revenue, resulting in low revenue mobilization. 

In a clear case scenario, in 2016, the Ministry of Finance intensified its oversight in an effort to limit the use of special permits that exempt imports from custom duties and VAT. Cabinet also amended the process for approving exemptions to include compulsory clearance by the Ministry. Despite these positive steps, total exemptions stood at GH¢2.26 billion as 

at end 2016, representing close to 10% 

increase from the previous year’s exemptions of GH¢2.06 billion. In 2017, total tax exemptions amounted to GH¢2.57 billion, representing nearly half (47%) the total import duty collected for the year.

In contrast to the rapid growth of expenditure, tax revenue in Ghana has remained very low as a share of GDP over the years due to the country’s tax-expenditure regime, including a wide range of exemptions and various forms of preferential tax treatment, concessions and low compliance. The continuous rise of tax exemptions impacts negatively on how much the government mobilizes as revenue to the state as captured in a Survey of the Ghanaian Tax System by the Ministry of Finance and the Ghana Revenue Authority with the support of Foreign, Commonwealth and Development Office (FCDO) in collaboration with the Institute for Fiscal Studies (IFS). 

The Institute of Fiscal Policy, an advocate for the urgent passage of the Ghana Tax Exemptions Bill, in a policy brief indicated that, the Exemptions Bill introduced in Parliament by the Government in March 2019 was a bold and commendable step towards addressing the excesses of the country’s overgenerous exemptions regime. 

“This is an important intervention in an era of fiscal rigidity, underpinned by mounting expenditure, persistently underperforming domestic revenue mobilization, and dwindling external aid support.”

However, the fiscal policy think-tank noted that, “the Bill needs to be strengthened, particularly by defining an exemption properly and comprehensively. It will also require that other exemptions in the tax code need to be re-examined for their effectiveness and value for money, and to see what potential revenue savings could be made by adjusting them. Reducing the range and cost of exemptions will help increase revenues and strengthen fiscal and macroeconomic stability.”

“We therefore urge Parliament to consider passing the Bill expeditiously, subject to the proposed amendments contained in this document.”

Meanwhile, submitting proposals for effective tax exemptions regime in Ghana, Eric Mensah, top official at Ghana Revenue Authority, in an interview suggested a review all legislation on tax incentives to minimize revenue leakages; one central body to monitor administration and use of tax incentives; tax administration must undertake impact analysis of 

the various tax incentive legislations with a view to repealing those that are retrogressive; and develop a system for withdrawal of incentives for non compliance with conditions

 

Adnan Adams Mohammed

The government is likely to miss its end year inflation target of 8 percent. 

This comes in the wake of a sharp rise in inflation for the month of September 2021.

Year on year inflation measured by the Consumer Price Index, (CPI) has recorded 10.6 percent for the 12 months ended September, 2021 from 9.7 percent recorded in August 2021.

The recent hike in the inflation rate is slightly above the Bank of Ghana’s medium-term target band of 8±2 percent.

According to the governor of the Bank of Ghana, (BoG), Dr Ernest Addison at the recent Monetary Policy Committee (MPC) press conference, “the latest forecast indicates that inflation will remain within the medium-term target band, but closer to the upper limit in the near-term, in the absence of further unexpected shocks. 

A close monitoring of the inflation situation is however warranted to respond swiftly to prevent potential second round effects on headline inflation from the rising food inflation. The Committee stands ready to respond appropriately as needed if this particular risk materializes”.

The Oil Marketing Companies (OMCs) and the National Petroleum Authority (NPA) have indicated that prices of fuel will be adjusted upwards by at least 7 per cent at the pumps starting last week Saturday.

According to the Ghana Statistical Service, the increase in the price of Housing, Water, Electricity, Gas and other Fuels (18.7%) triggered the hike in inflation.

The month-on-month inflation between August and September 2021 was 0.6% (0.3 percentage point higher than what was recorded in August 2021).

Food inflation (11.5%) in September 2021 was higher than last month (10.9%) and just above the average of the previous 12 months (10.4%). However, Food inflation contribution to total inflation dropped from 50.2% last month to 48.6% in September 2021.

Overall month-on-month food inflation was 0.0%. Vegetables, coffee and coffee substitutes, and cereal products were the only subclass that recorded a negative month-on-month inflation.

For non-food, year-on-year inflation on average went up this month compared to last month. It went up to 9.9% from 8.7%.

Out of the 13 division, six had higher year-on-year inflation than the rolling average over the last 12 months. Transport (13.6%) was the division that recorded the biggest difference in this month’s inflation compared to the 12- month rolling average.

Housing, Water, Electricity and Gas recorded a relatively high inflation (18.7%) this month compared to the rolling average (20.0%).

The inflation rate for imported goods was 8.1 % (same as recorded for last month), while the inflation for locally produce items was 11.5%, up from the 10.3% recorded last month.

The Volta region recorded the highest month-on-month inflation for September 2021 of 3.6%.

However, Upper West region recorded the highest inflation rate of 16.8%, followed by Northern region with 15.2%.

Greater Accra region registered an inflation rate of 12.9%, whereas the Ashanti recorded a rate of 11.7%

Transport either recorded positive month-on-month inflation or remained unchanged across all the regions.

 

Adnan Adams Mohammed

The Finance Minister, after long silence on the faith of the Agyapa Minerals Royalties agreement, has hinted it is still on government’s table for consideration to be resent to Parliament. 

The minister noted that, the most controversial and embattled Agyapa deal, has been reviewed and ready to be sent to Parliament for second consideration. He assured that all issues raised by stakeholders about the proposed deal have been addressed.

“The Attorney General has looked at it. We had a few stakeholder meetings and I think the new board should be energised to review that and go through the parliamentary process”, Ken Ofori-Atta, said when he inaugurated the nine-member board of the Mineral Income Investment Fund in Accra, last week. “I’m unequivocal that it is the way to go in terms of monetising our minerals and finding a way to leverage mining.”

“You must continue with the work that has been done following the theme of the budget ‘Continuity, Consolidation and Completion’ and address and overcome all the concerns against the Agyapa transaction, so we can go to the market and create the first mineral royalty company in Ghana and in Africa because it is good for Ghana”, he charged the new Board.

He also assured the people of Ghana that the Agyapa transaction to monetize some of Ghana’s gold royalties was done in the national interest and in accordance with the laws of the land.

Board Chair of the 9-member board of the Minerals Income and Investment Fund is Prof Douglas Boateng.

Other members of the new board include: Felicia Nana A. Dapaah Gyamfi Ashley, Prof Akosua Apea Osafo, Edward Nana Yaw Koranteng, George Mireku Duker, Kow Abaka Essuman Esq, Associate Prof Grace Ofori Sarpong, Rev Ammishaddai A Owusu-Amoah, Dr Maxwell Opoku Afari.

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.

The government then, through the Minerals Income Investments Fund (MIIF), set up Agyapa Royalties Ltd to monetize Ghana’s gold royalties. This was after Parliament approved the Agyapa Mineral Royalty Ltd agreement in the name of the Government of Ghana on 14 August 2020 despite a walkout by Minority members of the House.

In exchange, the company plans to raise between US$500 million and roughly $1 billion for the government on the Ghana and London Stock Exchanges to invest in development projects. However, the deal has become a subject of hot debate after concerns expressed first by the opposition National Democratic Congress, leading up to the December 2020 general election.

However, a few days after approving an amendment to the MIIF Act, the Minority walked out during the approval process of the very transaction agreements, the facilitation of which the amendment to the Fund’s statute was amended.

Civil society groups quickly added their voices to the opposition, describing the special-purpose vehicle (SPV) being created then, Agyapa Royalties of Jersey, as being opaque, potentially corrupt and undervalued.

They insisted that the deal must be suspended to allow for greater stakeholder involvement, according to some of the dissenting voices. However, the government has insisted that the deal is in Ghana’s best interests.

Furtherance to this, in December 2020, Transparency International urged the UK Financial Conduct Authority (FCA) to make detailed inquiries into the government of Ghana’s application to list Agyapa Royalties Limited on the London Stock Exchange and to reject the listing if corruption concerns were not satisfactorily addressed.

The banks and lawyers involved in the deal were also urged to withdraw thei
r engagement.

Agyapa Royalties Limited is a Jersey-based special purpose vehicle that would own almost 76 per cent of the royalties generated from 16 large gold mines in Ghana under a scheme that has caused controversy and political fallout in Ghana.

Forty-nine per cent of shares in Agyapa Royalties are to be sold through a listing on the London Stock Exchange.

Following the controversies over the Agyapa deal, the Special Prosecutor at the time, Mr Martin Amidu, raised red flags over the risk of money laundering in the deal and possible bid-rigging in the contracting of advisors.

Mr Amidu shared his report publicly in November, which gave further impetus to the advocacy for a review of the Agyapa Royalties deal.

In a submission to the FCA – and forwarded to J.P. Morgan, Bank of America Merrill Lynch International and law firm White and Case – Transparency International detailed concerns shared by a coalition of almost 30 Ghanaian and international civil society organisations that the deal smacks of corruption.

Linda Ofori-Kwafo, Executive Director of Ghana Integrity Initiative, the Ghana chapter of Transparency International, said at the time: “There are serious red flags in how this deal was set up. Concerns have been raised by civil society actors around inadequate stakeholder consultation, transparency and the valuation of the deal. Other concerns bother on the way transaction advisors became involved in the process and a lack of public oversight over the company at the heart of the deal. It is crucial for Ghana that the western financial institutions and regulators involved in this deal take these concerns seriously. They must not facilitate schemes that may end up plundering Ghana’s mineral resources in the name of investment.”

The president then directed the Finance Minister and Attorney General to review the transaction agreements and make the necessary adjustment to address some of the concerns raised by stakeholders, where appropriate.