Show transparency in mineral royalty receipts

BY: Daily Graphic
Show transparency in mineral royalty receipts

Statements by some government officials suggest a deep dissatisfaction with the contribution of the mining sector to Ghana’s economic fortunes.

This is because issues surrounding the disbursement of mineral royalties to mining communities by government have been left unresolved.

We know that the royalties which go directly to the mining districts represent only 4.95 per cent of all mineral royalty payments by the mining companies.

In 2016, for instance, mining companies paid GHc550 million in mineral royalties to the state, but only GHC27 million was returned to the mining communities for development.

To the extent that construction works on projects at the University of Mines and Technology (UMaT) in Tarkwa in the Western Region have stalled because of lack of funds from the Minerals Development Fund is worrying.

More than GHc4.5 billion is required to complete the projects, which are at various stages of completion, but the lack of funds from the MDF has been a major setback.
The projects, some of which were started in 2012, include a four-storey main administration block, a four-storey faculty block, a two-storey classroom block, a two-bedroom cafeteria, a three-storey bedroom for staff and a sports facility.

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This came to light when the Minister of Lands and Natural Resources, Mr Kwaku Asomah-Cheremeh, visited the university as part of a four-day working tour of some mining companies and MDF projects in the Western and Central regions.

Our worry stems from the fact that part of the royalties paid quarterly and in some cases monthly by the mining companies go into the MDF, which is supposed to be used for development in the mining communities.

The Daily Graphic is at a loss as to how the fund would lack cash to fund some development projects in mining communities, as is the case with the UMaT projects.

This situation, fuelled sometimes by the lack of transparency in the utilisation of mining revenues, has negatively impacted on perceptions of people in the mining industry.

Our concern is that royalties paid by mining companies, which are expected to be used for the development of the mining communities, are not properly accounted for.

For us, the royalties paid to the mining communities have not been transparently utilised for intended purpose. For instance, between 2011 and 2013, $854,407,800 million was ploughed back into seven mining districts but there was no commensurate development.

At the heart of the challenge is the absence of a Mineral Management Revenue Act which will make the government more responsible in the utilisation of mining revenue.