Ghana could be scammed – Lord Mensah

General news for Saturday, September 5, 2020

Source: 3 News

2020-09-05

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A Senior Lecturer at the University of Ghana Business School, Dr. Lord Mensah, has pointed out that while the Ayapa royalty deal is an innovative way to raise revenue, Ghana could experience a valuation price shift.

He told Abena Tabi on The Key Points on TV3 on Saturday September 5 that Ghana will have to be cautious not to lose revenue from the deal.

The Agyapa deal has been valued at $ 1 billion.

According to government communications, the valuation was only to “spice up” the deal and attract investors to the stock market.

But Dr. Lord Mensah said that “we must understand that whether it is gold, whatever it is, price appreciation is more difficult than price depreciation, so we must be careful how we place the value.”

“It is an innovative way to raise money. For the first time, we have seen a fair way to raise money, but then in the end, we don’t have to let ourselves down as a country. “

For his part, Samuel Bekoe, an economist and member of the Civil Society Platform on Oil and Gas, expressed similar concerns and said the deal has been undervalued.

“From my experience, when you register a company that is the declared capital you use, which in our case will be $ 1 trillion, you have already named it and it is public and, therefore, that information has reached investors. Investors will even be willing to lower it by giving you certain reasons.

“Since the government is going to own half of Agyapa, which of course is registered in a place that investors will love, in Jersey, it is still 51% and investors will put that political risk and control the risk and even go down. the price, “He noted.

Lord Mensah added that “I think it is very underrated.”

Ghana’s legislature approved the controversial Agyapa Mineral Royalty Limited deal on Friday, August 14, despite a minority protest.

Under the agreement, Agyapa Royalties Limited (ARL) will trade shares on the Ghana Stock Exchange and the London Stock Exchange for purchase by private individuals. But the Mineral Income Investment Fund (MIIF) will remain the majority shareholder.

The Minority said the agreement makes it impossible for a future government to replace the managers of Agyapa Royalties Limited, although the Minerals Income Investment Fund will remain the majority shareholder.

The standard bearer of the Democratic National Congress (NDC), John Dramani Mahama, has also questioned the agreement, saying that he will not recognize it if he wins this year’s election.

A CSO group led by Dr. Steve Manteaw, president of the Civil Society Platform on Oil and Gas, noted that the Ghanaian government and Parliament were quick to pass Agyapa’s controversial royalty agreement.