The Ghana Chamber of Mines has called for transparency and accountability in the disbursement of mining royalty to motivate mining companies to continue with the payment.
President of the Chamber, Kwame Addo Kufuor junior, said in 2017 alone mining companies in Ghana paid as much as US$130 million as royalty to government of Ghana and there would be the need for the beneficiaries to properly account for the utilization of the money. He indicated that chiefs and stools as well as district assemblies that received disbursements from royalty sums should be made to give vivid account of how they spent the money. He said , most of the disbursement could go waste and wouldn’t be used for purposes that would inure to the benefit of the people in affected communities if the recipients are not made to account for them.
So far, a committee has been established to develop a draft regulation to guide and facilitate the implementation of the mining development fund which is expected to promote transparency
The committee is expected to submit the draft regulation to the Minister of Lands and Mines for consideration and approved for implementation.
Currently Implementation of the Mining Development Fund has stalled due to the delay in approving and inaugurating the supervisory board. Mining companies pay five per cent of their revenue as royalties to communities in line with agreements for mineral extraction.
According to the Mining Act, Act 703 of 2006, communities are entitled to 10 percent of total royalties paid to government.
Experts say the delay in composing a board to oversee the implementation of the MDF by the Ministry of Lands and Natural Resources is delaying the progress in the implementation process and hampering transparency.
The law requires that one year after coming into effect, the minister shall develop regulations to back the primary Act. That one year expired in March this year and we have not even begun the process of developing regulations for the Act,” Dr Steve Manteaw , a member of the committee stated in an interview.
“The law also requires that the appointment of the administrator shall be made by the governing board in consultation with the minister so if the governing board is not in place, there is no way an administrator can be appointed “The Ministry of Finance cannot disburse money into the fund without an administrator in place so in order not to delay the disbursement of the funds, government decided to set up a front desk office with an officer to allow for disbursements into the fund,” Emmanuel Kuyole, Executive Director of the Center for Extractive and Development also stated in an interview .
The MDF Act attempted to provide legislative backing to the practice of returning a certain percentage which is the 10 per cent of total royalties in the mining sectors to the host communities. “The practice, which started somewhere in 1999, has been governed by an administrative letter issued by the then government and there were concerns with respect to the sustainability of a practice that is not backed by law so we attempted to do the right thing by backing it with law,” he said.
The law just states that the share that goes to mining host communities shall be distributed in accordance with the law but does not give reference to which particular law. He was of the view that, there is no law regarding how that particular amount of money or percentage of revenue is to be distributed and therefore there was a need for a regulation to supervise the distribution.
By Adu Koranteng
