Mining: Stakeholders Demand Harmonising Mineral Royalty Revenue Streams

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Civil Society Organisations (CSOs) in Ghana’s extractive sector are calling for the harmonization of revenue streams from mineral royalties that accrue to the various district assemblies to enhance the development of mining communities in the country.

In a bid to ensuring that citizens see tangible benefits from mining, Government in 2018, instituted the Minerals Income Investment Fund (MIIF) Act,2018, aimed at establishing a Fund to manage the equity interests of the Republic in mining companies, to receive mineral royalties and other related income due the Republic from mining operations, and to provide for the management and investment of the assets of the Fund and for related matters.

Prior to MIIF, government through parliament passed the Minerals Development Fund (MDF) Act, 2016, (ACT 912) which established a fund to specifically ensure true improvement in the standard of living within Mining Communities across the country affected by mining operations.

 20% of royalties collected across all mineral types goes to the Minerals Development Fund (MDF), which is responsible for deploying it directly to traditional authorities and local government for the provision of developmental amenities; 2% goes into the operations of MIIF; 2.4% to GRA as a collecting agent; and 75.6% goes into investment activities.

Speaking at a round table stakeholders forum organised by the Natural Resources Governance institute (NRGI) on Mining Royalties and Local Community Development, Co-Chair of the Ghana Extractive Industries Transparency Initiative (GHEITI), Dr. Steve Manteaw advocate for the harmonization of all restricted revenue streams to better serve mining communities.

“I would want to see a harmonization of the revenue streams that accrue to the districts for economic development, in developing the medium term framework for all of the assemblies we need to bring everybody on board to have shared plan and in terms of financing we harmonise all the resources to be able to finance that project -so we don’t have a situation where the local management committee of the mining community development fund sits in the corner and identify projects that are not aligned with the medium term development framework of the district.

Another fund I identified was the development foundations that has been set up by the mining companies, again you need to align expenditures of this foundations with the medium-term plan, and it is in doing that, that we can be able to ensure spending efficiency at the local level” he said in an interview with NR NEWS at the sidelines of the forum.

According to the former chairman of the Public Interest and Accountability Committee (PIAC), the concept of benefit sharing in the mining sector is not new and indicated that it became necessary sometime back in 1999 when the communities started agitating for increased share of mining benefits because all they saw in the communities was shipment of minerals and in return nothing really to improve their livelihoods, so in response the government then under the late Prez. Rawlings instituted through an administrative process an arrangement that returned about 10percent of minerals royalties to host communities, there is another 10percent that goes to support the sustainability of the industry.

He explained that Act, 912 of 2016 was expected to deal with some of the challenges with the implementation of the previous arrangement but the law and other enactments rather created parallel streams of revenue to the district which are to pursue the same objective of the local economy development.

 “I thought that was unfortunate because you are increasing the bureaucratic cost of development at the local level.

One that is managed by the assembly and a portion that is managed by a newly created

local management committee, so I thought that was not efficient, but even that aside that

arrangement comes with duplication of the risks of project because if the two

nomenclatures; the assembly and the LMC for the MCDS do not work together then you

could have a situation where projects could be duplicated so I thought that was not efficient

enough.” he observed.

Dr. Manteaw was however full of praise for the MDF which has since 2017 till date brought much development to mining communities hence the proposal for the harmonization of the various streams under one system say, the MDF.

  “It makes sense to even hand over the functions of the OASL to MDF, this is because over this short period they have managed to create guidelines for the utilization of mineral royalties and they set up a protocol that require communities on their own to identify projects they want to fund with the mineral revenues and to submit proposals to the MDF Secretariat, these proposals are evaluated and when approved, monies are disbursed for the implementation of  projects” he stated.

Other stakeholders supported the proposal and believed substantial development will be brought to mining communities if the various mining royalties revenues streams are brought together.

Patrick Stephenson

Patrick Stephenson, Economic Advisor at NRGI indicated that rationale for the event was to

highlight the challenges confronting mining communities and afford stakeholders an opportunity to suggest strategies to tackle those difficulties.

“For us the question really is how can we start a conversation that says that local mining

communities are entitled to say a Ghc100m a year, is the money going to them and if not

what are the ways we can ensure it can be moved to them, so ultimately it is the

development of the local communities that is at the heart of the conversation and we can at

least maximise value from the extractive sector particularly gold mining.”

The forum he said was also to provide a platform to discuss “measures to strengthen and improve  information dissemination between the relevant actors along the revenue generation and utilization chain, to support timely advocacy of local level actors”.

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