In response to the reported US$1billion sale of Newmont’s Akyem gold mine to China’s Zijin Mining Group, the Institute of Economic Affairs (IEA) is calling for significant constitutional amendments to safeguard the nation’s natural resources.
The IEA describes the deal as “flawed in several respects, inimical to Ghana’s interest and unacceptable” and outlines two key proposals aimed at reforming resource governance and reducing corruption.
IEA raises several concerns about the transaction’s legality and economic implications.
The remedies suggested are: amending Article 257(6) of the Constitution which currently vests Ghana’s natural resources in the president; and introducing a provision that prohibits the state from signing contracts above a specified monetary threshold less than six months to the end of their four-year term.
For the IEA, natural resources should rather be vested in the state and every contract should require parliamentary ratification as per Article 268(1) of the Constitution.
These measures, it believes, would prevent incumbent administrations from signing “eleventh-hour contracts in favour of their families, friends or cohorts, or for personal gain”.
Indeed, the economic think-tank believes that the country cannot afford to continue to “sell its birthright cheaply to foreign companies – as it has been doing its entire history – only to descend on the companies’ capitals to beg for aid”.
IEA says the current lease agreement between government and Newmont expires on January 19, 2025; hence, any decision by latter to sell the mine must be on a transfer basis, must be for the unexpired term only and subject to government agreement.
The lease has not yet expired, and therefore any decision by Newmont to sell the mine must be on a transfer basis for the unexpired term only and subject to government agreement.
The think-tank claims to be unaware of any such agreement between Newmont and government for transferring the mine to Zijin for the lease’s unexpired term.
Furthermore, they argue that allowing a foreign company to take over the mine contradicts President Nana Addo Dankwa Akufo-Addo’s earlier stance.
It is recalled that in the president’s State of the Nation Address from eight months ago – February 2024 – he stated: “We will engage with Newmont to give Ghanaian investors who want to acquire this mine priority, to ensure that our mineral resources better benefit the Ghanaian people”.
IEA notes that Ghana’s natural resources represent low-hanging fruit for accelerating the country’s development and eradicating its endemic poverty.
