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Agyapa Royalties deal: What have Panama Papers and other Leaks taught Ghana?

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On the last days before Ghana’s Parliament went on recess the government laid before it for approval some agreements under the Minerals Income Investment Fund (MIIF).

Parliament hastily went through those bills, ‘debated’ and approved them on Friday August 14, 2020. Of significance is this agreement by which the government is using a Special Purpose Vehicle (SPV), Agyapa Royalties Limited, an offshore company incorporated in a tax haven – Jersey, in the Channel Islands of the UK.

The deal with Agyapa, will be under the Mineral Development Fund Act, 2018 (Act 978) and its amendment Act, which is believed is yet to be assented to by the President. A Bill is not law until it is assented by the President in accordance with article 106 of the 1992 Constitution.

The government of Ghana according to the agreement, will own 51 per cent of the shares of the company and the remaining 49 per cent will be floated on the London Stock Exchange.

Agyapa as part of the deal is expected to raise between $500 million and $750 million upfront for government to use for development. The government says it needs the money to invest in education, primary capital, health and infrastructure.

Shareholders of Agyapa Royalties will however keep future revenues from gold royalties instead of the revenue going to government or the Mineral Investment Fund.

The deal has been criticized by the opposition which boycotted the discussion and final approval in Parliament, civil society organisations and some individual Ghanaians, but the government as usual with its supporters have insisted the Agyapa deal is the best to happen to Ghana gold revenue management since the first miner discovered the precious metal in what was once called the Gold Coast.

However, reading and listening to discussions about Agyapa, one would get the impression that Ghanaians didn’t pay attention to Panama and Paradise Papers, and if they did, they probably didn’t learn anything from them.

Before Panama Papers, Paradise Papers, West Africa Leaks and Mauritius Leaks, there were publications like Offshore Leaks and Swiss Leaks; and these remarkable works of journalism threw more light on tax havens and offshore companies, making them unattractive for business.

Offshore companies or tax havens, while not illegal, have been shown by these works to be used for unethical, and criminal activities like hiding wealth, tax avoidance, money laundry and increasing the opacity of some businesses. Some countries and organisations have started blacklisting some tax haven jurisdictions and some individuals whose activities in tax havens were found to be criminal have been tried and jailed, with some still in court.

The deal has been criticized by the opposition which boycotted the discussion and final approval in Parliament, civil society organisations and some individual Ghanaians, but the government as usual with its supporters have insisted the Agyapa deal is the best to happen to Ghana gold revenue management since the first miner discovered the precious metal in what was once called the Gold Coast.

It’s curious therefore, that at a time when tax havens have been projected into so much bad light and international organisations like the Tax Justice Network and Global Financial Integrity are calling on countries to improve on efforts to manage illicit financial flows which tax havens have been used for as the Papers and Leaks have shown, Ghana is using a tax haven registered company to manage revenues from an important natural resource like gold.

This decision, if anything, shows that Ghanaians and for that matter the Ghana government haven’t paid attention to or learned anything from these major journalistic works, which have guided decisions and led to amendments of laws on tax havens in some countries.

By Emmanuel K. Dogbevi

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