“Ghana’s 10% Carried Interest In Mining Companies Is Virtually Useless” – Vice President Bawumia
The Government of Ghana’s ‘carried interest’ in mining operations,
usually 10 percent, is “virtually useless” and has yielded zero
dividends for government for years, depriving the people of Ghana of
considerable amounts of domestic revenue, Vice President Dr Mahamudu
Bawumia has disclosed.
Vice President Bawumia made the disclosure at the launch of the IMF’s
Regional Economic Outlook for sub-Saharan Africa in Accra on Tuesday
8th May, 2018.
Citing the issue of Ghana’s ‘carried interest’ in the mining sector,
the Vice President stated that “If you look at the existing natural
resource regime, Ghana in the mining sector for example, has a carried
interest of about 10% and out of this carried interest the expectation
is that Ghana will receive dividends.
“When we look at the data, however, we see a matrix of zeros as far
as the dividends that Ghana earned from this carried interest. From 2012
it is largely populated by a matrix of zeros, so it means to a large
extent, the carried interest in mining is virtually useless as far as
Ghana is concerned because we are earning zero for it.”
“We need to re-look at this whole regime. The zero earnings is
because many of the mining companies say they are not making profits to
pay dividends but they keep mining notwithstanding the fact that they
are unprofitable! What is needed is a regional strategy to mineral
resource development, from gold to bauxite to manganese and iron, in
order to move up the global value chain for each of these minerals.
“We therefore have to re-examine our natural resource control and
governance strategy, our resource fiscal regime from exemptions to
carried interest, and how to use our natural resources to build a better
and prosperous economies.”
Vice President Bawumia underscored that the old model of relying on
revenue from the export of unprocessed natural resources was no longer
fit for purpose, and the time had come to introduce a new one, designed
to meet our development challenges.
“The old paradigm of natural resource exploitation and exports of
unprocessed agricultural products and raw minerals are no longer
sufficient in order to grow our economies, create jobs and to meet
social expectations in the provision of basic public amenities.”
The launch was attended by a number of high profile dignitaries
including Mr Abebe Aemro Selassie, Director, African Department of the
IMF; Annalisa Fedelino, Mission Chief for Ghana; Natalia Koliandina, IMF
Resident Representative for Ghana; Ghana’s Senior Minister Yaw
Osafo-Maafo; Finance Minister Ken Ofori-Atta, as well as the First and
Second Deputy Governors of the Bank of Ghana, Dr. Maxwell Opoku-Afari
and Mrs Elsie Awadzi.
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