The role of the media, CSOs in Agyapa deal


Ghana is one of the African countries endowed with lots of resources that could be used to grow the economy. It is the leading producer of gold in Africa that accounts for a significant portion of government’s revenue, hence, the well utilization of the available resources brings about development that reduced unemployment and poverty rates in the country.

In 2018, the Parliament of Ghana passed the Minerals Income Investment Fund (MIIF) Act to allow the fund to invest part of the country’s mineral income in a Special Purpose Vehicle (SPV) in line with meeting the Act’s objective of monetizing Ghana’s income from its mineral wealth.

As part of the implementation of the Act, government decided to engage in gold royalty monetization transaction by selling part of the future royalty flows on the London Stock Exchange and later on the Ghana Stock Exchange. This led to the incorporation of Agyapa Royalties Limited, an SPV created to achieve the objective of the MIIF Act.

The objective of the MIIF Act is to maximise the value of the income due the country from the mineral wealth for the benefit of its citizens, monetise the minerals income accruing to the republic in a beneficial, responsible, transparent, accountable and sustainable manner, as well develop and implement measures to reduce the budgetary exposure of the country to minerals income fluctuations.

It has been Revealed that the government incorporated a royalty streaming company in Jersey (Agyapa Royalties Ltd) and a subsidiary in Ghana (ARG Royalties Ghana) to pursue the object of MIIF Act. Government hopes to raise an upfront payment of about $500 million from the sale of 49 percent while maintaining 51 percent of Agyapa’s shares.

It would help to transfer the ownership of future royalty flows from royalties from 48 mining producing and prospecting leases which constitute about 95 percent of royalties from mineral resources.

How does the agreement protect Ghana’s interest?

“Before assigning, granting, allocating, transferring or otherwise disposing of any of the Fund’s rights, privileges, title, power and interest (of any kind, whether personal or proprietary) to receive any Gold Mineral Royalties (the “Optional Mineral Royalties”) in respect of Mining Leases other than the Allocated Mining Leases (the “Optional Mining Leases”) or agreeing to do so, the Fund shall follow the procedure set out in this Clause 3.4.”

The Fund shall first send to RoyaltyCo, a notice of its intention (which shall include the specified royalty rate payable in respect of such Optional Mining Lease) and invite RoyaltyCo to submit offers for the Optional Mineral Royalties subject to the assignment, grant, allocation, transfer or other disposition, RoyaltyCo shall have thirty (30) days from the date of such notification to deliver a counter notification with an offer in accordance with Clause 3.4(c)”.

If the Fund decides to proceed with negotiating a royalty purchase agreement in respect of the Optional Mineral Royalties with RoyaltyCo, the Fund and RoyaltyCo shall have sixty (60) days in which to negotiate in good faith and execute the terms and conditions of a mutually acceptable royalty purchase agreement which shall, among other matters, provide for the assignment, grant and allocation of the Optional Mineral Royalties to RoyaltyCo on terms and conditions identical to those that apply to the Allocated Mineral Royalties and the applicable specified royalty rate payable in respect of such Optional Mining Lease.

On the satisfaction of any conditions precedent and in accordance with the terms and conditions of the royalty purchase agreement, the relevant Optional Mineral Royalties shall be deemed to also constitute Allocated Mineral Royalties and the relevant Optional Mining Leases shall be deemed to also constitute Allocated Mining Leases for the purposes of this Agreement.”

Duration of the transaction

The investment agreement does not set a definite time frame for the royalty flow to Agyapa under the assigned leases. Though the Ministry estimates between 3-15 years for various leases, by standard practice and the phrasing of the agreements, they last for an indefinite period.

The Agyapa investment agreement seeks to isolate royalties from future fiscal adjustments which could negatively impact the primary partners to the operations of the mine. It will be difficult for the government to negotiate higher fiscal take during an unanticipated surge in gold prices.

A Financial analysis of the Agyapa investment model research conducted by Benjamin Boakye, Executive Director of Africa Centre for Energy Policy (ACEP), states that government intends to sell part of the future royalty flows on the London Stock Exchange and later on, Ghana Stock Exchange as part of implementing the Minerals Income Investment Act, 2018 (Act 987).

He is oft the view the government need to consider engaging most citizens in decision making before the passage of the bill. Also, he said, government to need to inform citizenry about the benefit the country would derive from the deal when agreed upon.

The role of the media in Agyapa deal

Since the introduction of the Agyapa deal in the country, the contribution of the media has helped to disseminate information to the public. Though some media houses were selected and educated on the deal, many still have low knowledge of it, hence, their inability to educate the public well. The recent media sensitization in Tamale organised by the Ghana Anti-Corruption (GACC) enabled some of the journalists to have a better understanding of the deal and the need for government to suspend it till proper consultation is made.

The role of Ghana Anti-Corruption Coalition (GACC)

As part of an initiative by the Alliance of Civil Society Organisation (CSOs) working on Extractives, Anti-Corruption and Good Governance in mobilizing local level support against the Agyapa Agreement, the Ghana Anti-Corruption Coalition (GACC) in collaboration with Africa Centre for Energy Policy (ACEP) has been organizing a media sensitization engagement to enhance journalists’ understanding of the issues for a more informed citizen engagement on the issue for wider reach and impact.

It was aimed at providing information on issues related to the Agyapa Agreement and mobilizes media support to use their various platforms to advocate along the issues for suspension of the Agyapa Agreement.

The Ghana Anti-Corruption Coalition (GACC), since its inception in Ghana, has been calling for a pragmatic approach to fight corruption in the health, education, the judicial services, governance, among others. GACC in an effort to combat crime in the country, has launched a new strategic plan (2020 to 2024) with a commitment to enforcing all anti-corruption laws in the country.

The new strategic plan focuses on educating the public on the forms of corruption and its impact on society; building a vibrant, robust and self-sustaining coalition by 2024; sustaining advocacy for law enforcement and campaigning for the strengthening of anti-corruption laws. Over the years, the GACC had engaged with stakeholders, including the organs of government such as the Ghana Audit Service and the Office of the Special Prosecutor, to prevent and prosecute corrupt officials.

The role of the media and the CSO need to be commended for their tremendous effort on ensuring right information get to the public domain. The collaborations of the two has helped put government in decision making in order to have a great impact on society. The media and the CSOs in Ghana have the responsibility to stop a proposal that might deprive the nation of the needed resource revenue.

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