Ghana has accrued a whopping GH¢7.82 billion in mining royalties between January and September this year, buoyed by a strategic review of the country’s royalty structure that secured an extra GH¢4 billion for the state.
Lands and Natural Resources Minister, Emmanuel Armah-Kofi Buah, who made the revelation at the KNUST Extractive Summit, highlighted that the country had been shortchanged for decades under an outdated flat royalty regime while multinational mining entities raked in massive windfall profits during global gold price booms.
The Minister elaborated that under the former framework, Ghana negotiated baseline terms assuming a benchmark production cost of roughly $1,800 per ounce of gold, encompassing corporate profits and operational overheads. However, despite gold prices soaring to $4,000 and subsequently touching $5,000, mining firms continued paying fixed baseline rates, effectively denying the nation its fair share of surplus earnings.
“They are creaming the profit and we’ve locked it up,” he said.
To rectify the disparity, Mr Armah-Kofi Buah noted that the government, backed by President John Dramani Mahama, instituted a dynamic sliding-scale royalty framework ranging between 5% and 12% to guarantee equitable returns for the nation.
“Let’s have a sliding scale. When gold prices go up beyond the agreed amount that we said we will give you a reasonable return on investment, then the state has to increase its royalties. When gold prices come down, it comes down. When gold prices go up, it goes up. That’s fairness,” he stated.
Referencing latest operational figures from the Minerals Income Investment Fund (MIIF), the Minister emphasized that the policy intervention introduced around June last year has delivered remarkable financial dividends for the treasury.
“The Minerals Income Investment Fund has just reported that GH¢7.82 billion in royalty receipts between January and September this year has been received. Guess what we have received? GH¢3 billion. That decision has saved Ghana GH¢4 billion Ghana cedis,” he revealed.
By: Rainbowradioonline.com/Ghana
