Government urged to collect mining royalties on monthly basis

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Samuel Abdulai Jinapor
Samuel Abdulai Jinapor

The Ghana Extractive Industry Transparency Initiative (GHEITI) has urged the government to take an urgent action to provide legal backing to a policy decision made in 2015 to collect mining royalties on monthly basis.
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The request was made in response to a GHEITI suggestion that mining royalties be collected monthly rather than quarterly as required under Legislative Instrument (LI) 1349.

The government of Ghana announced in its 2015 budget that it had decided to collect mineral royalties on a monthly basis instead of quarterly.

However, Mr Kwaku Boa-Amponsem, Consultant to GHEITI, in a presentation of the 2019 GHEITI reconciliation report findings at a stakeholder dissemination workshop in New Abirem, said the absence of such a legal mandate was undermining compliance.

The 2019 GHEITI report found that because the relevant rule that would give effect to the policy decision has not yet been amended, implementation of the policy has been difficult.

Mr. Boa-Amponsem said permitting mining firms to keep royalties for three months without payment would have resulted in a waste of time and money compared to paying the royalties in the same month that the minerals were sold.

He said some mining companies, particularly those with development agreements, had the issue addressed in their recently renegotiated agreements and were subsequently paying their royalties on a monthly basis.

However, he added, there was still a need to achieve widespread compliance by amending the relevant regulation.

The report also discovered that the Minerals Commission’s Register of Licenses lacks provisions for licence transfers and terminations in accordance with the 2019 EITI Standard from the Extractive Industries Transparency Initiative.

Therefore, it was suggested that action be taken to correct the flaw.

Additionally, transfers received in 2018 were included in the 2019 receipts at several regional offices of the Administrator of Stool Lands (OASL).

Additionally, transfers received in 2018 were included in the 2019 receipts at several regional offices of the Administrator of Stool Lands (OASL). 

This was because certain funds received in 2018 were paid out in 2019, and a few district assemblies also included funds received in 2018 in their 2019 utilisation timetable.

According to the report, the circumstances made tracking challenging and suggested that the OASL make sure that royalties are paid out promptly and in the years they are due.
The significance of EITI as a global standard is to promote accountable and transparent management of oil, gas, and mineral resources.

The standard, according to Dr. Steve Manteaw, Co-Chair of GHEITI, aims to address issues with underdevelopment, conflict, and poverty in countries that depend on natural resources.

He said the Minister of Finance, Deputy Minister for Lands and Natural Resources (Mines), Deputy Minister of Finance (Revenue), Deputy Minister of Energy (Petroleum), GHEITI Multi-Stakeholder Group, GHEITI technical subcommittees for mining, oil and gas, and GHEITI communication sub-committee were all part of the EITI governance structure.

He said the criteria that formed the basis of the report, saying that the 2019 Standard was built on good practises and lessons from implementing countries.

He said it opened new frontiers such as commodity trading transparency, beneficial ownership disclosure (BOD), gender, and the environment.

Nana Dr. Boni Abankro V, Chief of Adausena-New Abirem, asked that the GHEITI secretariat increase its efforts in gathering data on mining revenues so that defaulters in payment do not flee the scene before they are found.

“I call on district assemblies, the Office of the Administration of Stool Lands, and the mining sector agencies to make information available and reachable,” he said.

 Mr. Kweku Lartey Obeng, Component Manager for Accountability and Resource Governance under the Governance for Inclusion Development, said GIZ would uphold its pledge to assist GHEITI’s technical efforts as a development partner.

The German organisation for development cooperation (GIZ) helped organise the dissemination workshop.

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