The Minerals Development Fund (MDF), created to generate revenue for developmental projects in mining communities, has been denied its due revenue allocation eight months into the year 2022 despite the mining companies making payments as stipulated by the law.
According to the Ghana Chamber of Mines, mining firms are regularly paying their royalties and other due obligations to the Minerals Income Investment Fund (MIIF), of which some proportion is to be disbursed to the MDF for development in the districts of the mining operation; but the disregard for this clause in the Act 978, 2018 is undermining development and living standards in mining communities.
Chief Executive Officer (CEO) of the Ghana Chamber of Mines, Sulemanu Koney, expressed that the decision by the Finance Ministry not to release funds to the MDF for developmental projects ongoing in the various districts where mining activities take place has led to the discontinuation of several projects targetted at skills development and social economic empowerment to alleviate poverty.
“We know that as mining companies make payment for royalties, the law indicates that government should plough back 20 percent of the mineral’s revenue to the districts where mining takes place for development. Unfortunately, we have a situation where for the whole of this year, no revenue has been disbursed to the MDF by the central government, and it is hurting the development of mining communities as the district assemblies depend on it for development programmes,” he said.
He indicated that the chamber’s engagement with the affected districts reveals that most of them have planned their developmental projects with these funds; and as it delays, it escalates their project cost. These situations, he emphasised, have contributed to the poor state of mining communities because even with the introduction of the law in 2016, the Finance Ministry has still not been consistent with the payment of revenue to the MDF for the districts.
The chamber is calling on civil society organisations (CSOs), community members of affected communities, citizens, and all other stakeholders to call government, through the Minister of Finance, Ken Ofori Atta, to order and ensure the right thing is done as the arbitrary discharge to the law is becoming more often.
The CEO made these remarks at the launch of a ‘10-year Socio-Economic Development Plan’ by AngloGold Ashanti Obuasi Mine for the two districts of its operations.
On his part, the Co-Chair of Ghana Extractive Industry Transparency Initiative (GhEITI), Dr. Steve Manteaw, stated that since 1992, when agreements were made for a portion of mineral revenues to be given to mining communities, there have always been challenges; hence, the enactment of the law to address the situation. However, since the law was passed in 2016, there has still been that challenge of disbursement year-on-year, which is unfortunate and require some serious sanctions to address.
“As we speak, the whole of this year, even though the mining companies have paid their royalties to government, communities have not received their share through the disbursement of MDF.
“To me, this amounts to a violation of the law. For as long as the companies have paid their royalties which have been received by the MIIF, the communities should receive their share according to the laid down formula, and this amounts to a violation of the law,” he said.
The negative effect of this situation, he emphasised, is the deprivation of mining communities’ valuable development resources as a result of the precious minerals taken from their land.
“This matter must be addressed as soon as possible, and the Minister of Finance, Ken Ofori Atta, must be held responsible as he has the sole discretion in the management of the financial resources of the country,” he said.