Govt wholly owns Agyapa — Finance Ministry

The Ministry of Finance has said the Agyapa Mineral Royalties Limited is currently wholly owned by the government of Ghana and does not belong to any individual, contrary to speculations.

“Agyapa is 100 per cent owned by the government of Ghana," a Deputy Minister of Finance, Mr Charles Adu Boahen, told the media in Accra last Thursday.

 “Currently, the company is owned by the Minerals Income and Investment Fund (MIIF) on behalf of the government of Ghana. Once the company is listed on the London Stock Exchange (LSE) and the Ghana Stock Exchange (GSE) following regulatory approvals, the MIIF will be the largest shareholder, and hence Agyapa Royalties will be ultimately majority-owned by the government of Ghana,” he explained.

According to him, "the company (Agyapa Mineral Royalty Limited) is to be listed on the LSE and the GSE after the approval by appropriate regulatory authorities in Ghana and London”.

"Once listed, the government of Ghana, through the MIIF, will be the majority shareholder, with at least 51 per cent of the shares," he noted.

There have been criticisms from a section of Ghanaians, including civil society organisations and the opposition National Democratic Congress (NDC), over the ownership and transparency of the Agyapa deal.

Rationale for listing in Ghana and London

Mr Adu Boahen explained that the listing would provide transparency and high international standards of good corporate governance.

"The LSE is one of the major stock markets for listing mining companies. In order to realise maximum value for the shares that are being sold, London is the ideal place to ensure this. Given the amount that the government wants to raise, it cannot be raised only on the GSE," he said.

He said Parliament had approved the investment agreement, saying "it ties the royalty flows to the life of the underlying mining leases for the specific gold mines".

The deputy minister said only 16 gold mines from which the government received annual royalties would be affected.

About Agyapa Royalties

Agyapa Royalties is a gold royalty company which will offer financing to gold mining companies that want to develop their mines, in exchange for royalty or revenue-related stream.

Mr Adu Boahen said Agyapa Royalties would focus its activities specifically on the gold mining sector in Ghana and Africa.

 "It will be the first African-focused minerals royalties company and also the first  to be listed by an African government," he said

He indicated that there were several other listed royalties companies on various stock exchanges in the world and cited Franco Nevada, Royal Gold, Wheaten Precious, Sandstorm and Osisko as examples.

Monetisation of Agyapa Royalties flow

According to him, royalties would flow from the specified gold mining assets to the Bank of Ghana and be split.

He explained that 75.6 per cent of the royalties would be given to the MIIF, with other statutory bodies getting their respective share.

"The statement that all the traditional authorities will lose their right to royalties is untrue," he said, adding that the 20 per cent share of the Minerals Development Fund is still intact.

He said 2.4 per cent would be allocated to the Ghana Revenue Authority (GRA) as a revenue management fee, while two per cent would be assigned to the MIIF to cover the cost of running the fund.

Benefits

 “Agyapa has the ability to facilitate the development of mines in Ghana and Africa and hence develop the sector and the economy as a whole," Mr Adu Boahen explained.

"This will, all other things being equal, also benefit shareholders, including the majority shareholder, the government," he added.

He said the listing on the stock markets would ensure a high level of transparency and good corporate governance.

He said the deal would ensure that the government could raise non-debt capital for development in affordable housing, education, roads, among other capital projects, without adding to Ghana’s debt stock.

Criticisms

Also speaking at the same media briefing, the Minister of Finance, Mr Ken Ofori-Atta, said it was sad that since independence from colonial rule, Ghana had not been able to have a listed company on the international stock exchanges for its mineral resources.

According to him, it was for that reason that the MIIF was brought into being to ensure that Ghana derived the best from its mineral resources.

“For centuries, Africans have been getting far less than they deserve for their mineral resources. This is due to the fact that the resources leave the shores of Africa without value addition.

“President Nana Akufo-Addo is clear in his mind that to move Ghana Beyond Aid, we must add value to our resources,” he said.