Agyapa Royalties deal 'unconscionable' - Attorney General

The Attorney General and Minister of Justice, Gloria Akuffo, has raised questions over the agreement between the government and a Special Purpose Vehicle (SPV) company, Agyapa Royalties Limited.

Ms Gloria reportedly described the inability of the state to review or evaluate the effectiveness of the Agyapa Royalties deal in future as “unconscionable”.

In an opinion on the deal to the Finance Minister, the Attorney General also noted that the payments in respect of the agreement will be made in US Dollars which violates the Bank of Ghana Act, 2016 (Act 918) which mandates that transactions be made in the currency unit of Ghana which is the cedi or its equivalent.

Per a report by Starrfmonline, the Attorney General in a leaked, also stated that the manner of the deal agreed “freezes anything legal including judicial orders and decisions. In effect no court can pronounce on any part of the agreement as being illegal, unconscionable, null and void or on any matter before the court which may or is likely to affect any part of the agreement."

“This will amount to executive interference of the powers of the judiciary, which is a violation of the concept of separation of powers as provided under the Constitution of Ghana. Therefore, the executive arm of government cannot enter into an agreement that curtails the independence of both the Legislature and the Judiciary.”

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Meanwhile, Finance Minister, Ken Ofori-Atta, has justified the Agyapa Royalties agreement, inspite of the surrounding 'controversies'.

Ken Ofori-Atta at a press conference on Thursday, dismissed claims that the Akufu-Addo led government established Agyapa Gold Mineral Royalty Limited to mortgage the country’s ‘future resources’ to enrich the current administration.

Mr Ofori-Atta was emphatic that “there are those who say we should be careful not to mortgage or sell today, the gold in the ground for future generations” but “this is not the case”.

He says the Agyapa Royalties agreement provides government with the opportunity to use innovative ways to manage and maximize the country’s mineral wealth.

According to him, the current arrangement where the value multinational companies in Ghana’s extractive industry are assessed by basic indicators such as taxes rather “ignores many of the different ways in which the countries that extract the resources utilise their rights beyond and outside of our borders as a means of creating value.”

About the Agyapa deal

Parliament August 14th approved the controversial Agyapa Mineral Royalty Limited agreement with the government of Ghana despite a walkout by the Minority.

Two years ago, the House passed the Minerals Income Investment Fund Act 2018 which establishes the Fund to manage the equity interests of Ghana in mining companies, and receive royalties on behalf of government.

The fund is supposed to manage and invest these royalties and revenue from equities for higher returns for the benefit of the country.

The law allows the fund to establish Special Purpose Vehicles (SPVs) to use for the appropriate investments. Last month, government introduced an amendment to the act to ensure that the SPVs have unfettered independence.

The approval will enable the country to use a special purpose vehicle, Agyapa Royalties Limited to secure about $1 billion to finance large infrastructural projects.

In line with that, Agyapa, which will operate as an independent private sector entity, will be able to raise funds from the capital market, both locally and internationally, as an alternative to the conventional debt capital market transactions.

The funds, which are expected to be raised from the Ghana Stock Exchange (GSE) and the London Stock Exchange (LSE), will be a long-term capital, without a corresponding increase in Ghana’s total debt stock and hence without a public debt repayment obligation.