A former Chief Justice of Ghana and Distinguished Fellow at the Institute of Economic Affairs (IEA), Sophia Akuffo, has called for an end to natural resource contracts that give foreign companies an unfair advantage over the country.
The former Chief Justice made this comment at an IEA press conference on March 24 this year, under the theme ‘Maximising the Benefits from Ghana’s Natural Resources’. She suggested the nation must adopt modern policies that ensure a fair share of resource wealth stays in it – instead of benefitting foreign mining firms.
Madam Akuffo finds it ironic that the country has vast mineral and petroleum resources worth trillions of dollars, yet continues to struggle financially.
“The current system allows foreign companies to extract Ghana’s resources and keep most of the profit while the country receives only a small portion in royalties and taxes. This needs to change,” she emphasised.
Despite high, excruciating taxes, government revenue is often insufficient for development – forcing the country to borrow frequently and seek bailouts from the International Monetary Fund (IMF).
Indeed, the IEA has welcomed President John Dramani Mahama’s recent announcement of reviewing all extractive sector agreements. One of its major recommendations is for government to set up a five-member committee of Ghanaian experts to review and amend all natural resource laws to maximise national benefits.
The IEA also called for the nation’s mineral and resource laws to align with international agreements such as the United Nations General Assembly Resolutions 1803 (1962) and 3281 (1974), which emphasise a country’s right to benefit from its own natural wealth.
Another recommendation is for government to focus on setting up its own mining and oil production companies instead of relying on foreign firms. Alternatively, the institute proposed that government should at least ensure that local businesses have a fair share in joint partnerships with foreign investors.
To improve the country’s bargaining power in future contracts, IEA called for more investment in the Geological Survey Department. If the nation has better data on its mineral deposits, it can negotiate stronger agreements with investors.
