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General news for Tuesday, September 1, 2020
Source: www.ghanaweb.com
2020-09-01
Minority Leader Haruna Iddrisu addressed the press conference
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Minority Leader Haruna Iddrisu on Tuesday, September 1, 2020, addressed a press conference to outline key minority MPs’ concerns about the Agyapa royalty deal.
Among the concerns of the minority is the issue of the incorporation of Agyapa as an offshore company in Jersey, UK, a tax haven.
“Tax havens are susceptible to money laundering and therefore increase the risk of Ghana being listed as a money laundering jurisdiction by international bodies such as the European Union and the United Nations,” said Haruna Iddrisu.
Despite strong requests from civil society organizations (CSOs), the government insists on going ahead with the deal that is expected to leverage Ghana’s mineral royalties for primary capital in the international market.
Under the agreement, the government intends to monetize part of its annual gold royalties from some mining concessions to raise $ 500 million of capital in advance from private investors through the placement of shares in a special purpose vehicle (SPV). newly created to which the State will transfer its royalties. inside.
Critics of the deal, including at least 15 CSOs, have said the deal lacks transparency.
Below is a list of all the concerns raised by minority MPs about the deal.
– The incorporation of Agyapa as an offshore company in Jersey, in the Channel Islands, a well-known tax haven, is worrying. Tax havens are generally known for their lack of transparency in corporate governance matters, such as the disclosure of the beneficial owner of company shares.
– Tax havens are susceptible to money laundering and therefore increase the risk of Ghana being included in the list of money laundering jurisdiction by international organizations such as the European Union and the United Nations.
– Ghanaians will recall that in May 2020, the European Union included Ghana on its Anti-Money Laundering (AML) List but postponed the implementation date to October 1, 2020 due to the Covid-19 pandemic. . By establishing a sovereign wealth fund in a tax haven, the government of the nuclear power plant significantly increases the risk that Ghana will be considered a money laundering jurisdiction. This is because individuals and businesses use tax havens like Jersey to hide their income and wealth in order to avoid paying taxes and general regulatory scrutiny of their businesses.
– The European Union, the OECD, and the United Nations use evidence from these offshore agreements to rate countries on the effectiveness of their anti-money laundering regimes, including laws, regulations, policies, and other government actions.
– Minority concerns about off-budget transactions. The agreement is intended to monetize gold royalties to finance the budget and should have been reflected in the budget statements submitted for approval and subsequently promulgated in the various appropriation laws for fiscal year 2020. The agreement was not reflected in the Budget Statement for fiscal year 2020.
– In reviewing the 2020 Substantive and Supplementary Budgets, the Government did not disclose any of the following fiscal measures to Parliament.
me. That the MIIF will substantially replace the Mineral Development Fund (MDF) as of 2020, as indicated by the Government;
ii. There was no policy on how current MDF beneficiaries, including traditional authorities, will continue to get their share of mineral royalties; and
iii. There were no explicit provisions in Financing (or indebtedness) and Public Debt in the Budgets for 2020 onwards, in addition to the COVID Loan from the International Monetary Fund (IMF).
iv. The Government showed the monetization of mineral (gold) “explicitly” in December 2019 as a potential source of Budget financing in the IMF Article IV Report, but did not do so in the 2019 Budget approved by Parliament in the same December 2020.
v. In March 2020, in applying for the IMF’s COVID-19 Loan (approved in May 2020), GOG took the opposite step by excluding mineral (gold) royalty monetization from funding sources.
saw. The Government also excluded the monetization of mining royalties from its COVID-19 Declarations to Parliament in March and May, as well as from the Supplementary Budget in July 2020.
– Transaction of minority concerns about family and friends. This transaction is another classic case of a family and friends transaction. The good people of this country need to know the following. Ghanaians demand answers.
me. We need to know the procurement processes used to select Africa Legal Associates (ALA) as legal advisors. ALA is owned by Gabby Otchere Darko, the cousin of President Akufo-Addo and Ken Ofori Atta, the Finance Minister.
ii. We also need to know the cost of the transaction and how much the lawyers and brokers, including Gabby’s company, have been paid.
iii. We need to know if the amount of money that was paid to Gabby’s company was arm’s length.
iv. Given Gabby’s relationship with the finance minister and the president, we must also be sure that he did not use his influence with decision makers to secure this lucrative deal.
v. Why the election of Kofi Osafo Marfo, son of the Chief Minister, Yaw Osafo Marfo? Were you subjected to a credible international competitive selection process?
saw. What considerations were taken into account to determine the remuneration of Mr. Osafo Mafo’s son? Did your father (the chief minister) influence the selection process? Ghanaians deserve to know.
vii. Why does he, along with other board members, have a guaranteed job for the foreseeable future regardless of his output?
– Minority concerns about conflicts of interest.
The Gabby Otchere-Darko law firm advising on this shady Agyapa deal is similar to Databank’s objectionable practice acting as a government bond book broker or Eurobond co-manager. All these transactions are motivated by fees that are true and paid in advance. These rates partly explain the rapid growth of public debt. A key factor in the increase in public debt under the Akufo-Addo government is the fees accrued by the Finance Minister’s company, Databank.
The selection of Databank Brokerage Limited as a book broker means that Databank benefits every time the government issues bonds in the domestic market. The actual commission is not based on the debt stock, but on the gross issuance (including refinancing) in the domestic market, which in 2019 alone amounted to a whopping 64 billion GHc. Since 2017, Databank has also been co-head of Ghana Eurobond transactions. During this period, Ghana has issued $ 5 billion in Eurobonds, with commissions and fees paid to senior managers and co-directors.
It is difficult to see how you can prevent the minister from borrowing for Ghana if his company benefits from a commission every time the government issues national bonds or Eurobonds. In fact, in 2018, when the CHRAJ investigated the allegations of conflict of interest against the Minister of Finance in the matter of the issuance of $ 2.25 billion in bonds, the Commission observed that the defendant is a director, former director, shareholder or the final beneficiary of several companies whose objects are related to the stock market sector. The companies were Databank and EGL. As such, the Respondent’s interests in the growth and well-being of those companies have the potential to conflict with the interests of the state in relation to the stock market, such as the issuance of bonds.
– Concerns of minorities about the secrecy of company information (Agyapa).
me. The Government has not provided us with information on the value of the company.
ii. They did not give us information on how they arrived at the value of the company.
iii. We were also not given a cash flow forecast for the duration of the project and its assumptions.
iv. Nor do we have the prospectus to know the cost of the transaction. We are reliably informed that they have spent $ 5 million despite the finance minister claiming to have spent around $ 2 million in fees.
i) Concerns of minorities about tax issues. This current administration of the nuclear power plant has mortgaged all of our main sources of income, and this has serious tax implications.
me. Getfund’s receivables have been mortgaged.
ii. They have liens to the energy sector mortgaged
iii. They have mortgaged the bauxite with sinohydro.
iv. They have mortgaged the Highway Fund, and as if this were not enough, now they want to mortgage the mineral royalties.
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