Transparency initiative expresses concern over non-payment of royalties

Emmanuel Baah, Oct - 10 - 2024 , 09:57

The Ghana Extractive Industries Transparency Initiative (GHEITI) has expressed concern over some of the payment of a section of royalties meant for the Mineral Income and Investment Fund (MIIF) into the Consolidated Fund.

Additionally, he expressed dissatisfaction about the non-payment of Bauxite royalty to the MIIF and mining communities.

Event

Addressing journalists last Monday, on the sidelines of the dissemination of 'GHEITI 2021/2022 Mining, Oil and Gas Sector Report', and the maiden 2020 Artisanal and Small-Scale Mining (ASM) report, the Co-Chairman of GHEITI, Dr Steve Manteaw, indicated that the MIIF secretariat was supposed to receive all royalties, however, that was not the reality on the ground.

“Our investigations have revealed that though MIIF actually collects the bulk of the royalties, there have been instances where the Ministry of Finance has collected some mineral royalties," he explained.

"Some companies have paid their minerals royalties to GRA and it found its way into the consolidated fund, which is in breach of the MIIF Act because the MIIF Act requires that we pay all such royalties into the MIIF account,” he noted.

Dr Manteaw said some dividends had been paid to the Ministry of Finance, a development, he noted, was at odds with the MIIF Act.

“There is also the case of dividends -the same act requires that MIIF became the repository of all mineral income, including dividends. Again, in our report, we found that on occasion, some dividends have been paid to the non-tax revenue division of the Ministry of Finance," Dr Manteaw noted.

These aberrations, according to him, were in breach of the law and had recommended the Ministry of Finance to cease receiving mineral royalty and dividend payments and direct such payments into the MIIF account.

Primary concern

Touching on the exclusion of bauxite royalty to MIIF, Dr Manteaw indicated that there was also the exclusion of Bauxite in the MIIF account from being paid into the MIIF account so bauxite was the only mineral whose royalty was exempted from being paid to MIIF.

Linking the above challenge to community development, he emphasised that the primary concern of EITI, was for the communities to have a share in all mineral royalty, and advised that when bauxite royalty was received into the consolidation fund, the Ministry of Finance should ensure that the community share, which was 10 per cent, was deducted and paid to the beneficiary communities.

Transparency

In a speech read on his behalf, the Ashanti Regional Minister, Simon Osei-Mensah, explained that the Extractive Industries Transparency Initiative remained the global benchmark for evaluating how effective resource-dependent economies harnessed their natural resources for development.

This initiative, according to Osei-Mensah, was grounded on the principles of transparency, accountability and citizen participation in decisions regarding resource governance, including the allocation of revenues.

Since Ghana acceded to the initiative in 2003, the government has consistently demonstrated its commitment by providing budgetary support for the implementation of this initiative.

This commitment, furthermore, was reflected in the government's adoption of GHITI's recommendation, which had led to several significant reports in the mining, oil and gas sectors.

Ghana, the minister indicated, was endowed with natural resources, adding that the thriving mining, oil and gas sectors had grown significantly in recent years, serving as a key pillar in the nation's economic growth and development.

Those sectors, according to him, contributed immensely to our economy with its attractive mineral resource base and had successfully drawn significant investment in those industries.

However, it is important to acknowledge that these sectors are not immune to the cyclical fluctuations typical of the global commodity market.