The Co-Chair of the Ghana Extractive Industry Transparency Initiative, Dr. Steve Manteaw, says the laws governing the Mineral Income Investment Fund (MIIF), must be tightened to address problems associated with managing Ghana’s mineral revenue.
MIIF was established with the expectation to address the recklessness with which Ghana has been utilizing its mining revenues.
Dr. Steve Manteaw made the remark when he spoke at a Technical Workshop on the 2019 GHEITI report on Mining and Petroleum attended by journalists from the Institute of Financial and Economic Journalists (IFEJ).
He said the Nana Akufo-Addo-led government while in opposition promised to provide a mineral revenue management framework like the Petroleum Revenue Management Act that ensures transparency and makes provision for future generations, hence the MIIF, but the MIIF has fallen short in addressing such concerns.
“It is sad that after mining for 100 years, Ghana ended up a Highly Indebted Poor Country (HIPC), which speaks volumes of how badly we’ve mismanaged our mineral revenues. First of all, we have lived recklessly without investing the bulk of our mineral revenues in capital projects and infrastructure to ensure that at least those investments return dividends that would have a multiplier effect across the wider economy. So the bulk of our mineral revenues has gone into recurrent expenditures, which amount to treating our mineral revenues as income for consumption as against as income for investible income.”
“Unlike the Petroleum Revenue Management Act, PRMA, which says that at the point the oil resource is exhausted, whatever is left in the Petroleum Holding Funds, thus the Stabilization Fund and the Heritage Fund, would be combined to form the Ghana Resource Fund which would be invested, and we will live off the returns of those investments in perpetuity. That is the way to ensure sustainable benefits of your resource extraction, but with gold, we have lived recklessly and spent almost everything that we earned from Gold. So on the day that the gold is completely exhausted, we would have nothing to live on in the years ahead. That is not a good way of managing your mineral resources. All these things have come together to deny us the full benefits of our gold”, he said.
He said while it was anticipated that these lessons learnt from the poor management of the gold and other mineral resources would be factored into the MIIF, it does not especially provide for the future in a transparent manner.
“We tried to correct them in the way we have designed the Petroleum Revenue Management Act (PRMA). For instance, the Stabilization Fund was created by the PRMA to deal with the volatility effect of petroleum revenues on the budget. As we speak, gold revenues are equally volatile, but there is no framework, not even in the MIIF to deal with the volatility effect of gold revenues on our budget and that remains as a gap.”
“The PRMA again set up the Heritage Fund to take care of the inter-generational interest of future generations in the gold resource, but we don’t have that arrangement in the mining sector or the MIIF. So it is time to do for mining what we have so brilliantly done for oil, and provide mechanisms by which citizens are able to obtain information about how mineral resources are managed to use them to hold duty bearers accountable for their actions and inactions so far as managing of mineral revenues are concerned in this country”, he noted.
Dr. Manteaw further said that what is much worrying is the fact that the MIIF only manages just around 3 percent of the gold revenues which is the royalties, leaving other mineral revenues like capital gains among others.
The 2019 GHEITI report on mining and oil and gas cited concerns including delays in allocation of mineral royalties to District Assemblies by the Office of the Administrator of Stool Lands, OASL, inconsistencies in what government declare as Gold export and what is reported by gold receiving countries as well as the call to incentivize citizens’ activism on proper utilization of petroleum and mineral resources.
