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Coalition slams govt over AngloGold agreement

  • SOURCE: graphic.com.gh | Graphic
  • The National Coalition on Mining (NCOM), has described as illegal the fiscal and development agreement between Ghana and AngloGold Ashanti (Ghana) Limited, and further asserted that it will remain, even after Parliament has ratified it.

    It insisted that there was no legal basis for cutting the corporate income tax or reducing the rate of royalty, therefore, illegality still persisted in the approved agreement, so far as those two fiscal concessions remained part of the package being given to AngloGold.

    A member of the Coalition, Dr Yao Graham, said in an interview that the economic reasons why AngloGold should not be given such waivers remained valid, because it was not a new mineral development risk, but an old mine in which they knew the value of the deposits that they were about to exploit.

    “By and large, our argument remains valid because the agreement didn’t change significantly and in fact, the illegality in relation to royalty and corporate tax remain. It is not like they are going to take a risk so you want to encourage them and so there is no economic justification for this concession,” he stated.

    Parliament on June 21, 2018, ratified a development agreement between government and AngloGold which the latter is expected to begin mining operation at the Obuasi mine in the third quarter of 2019.

    The coalition had on several occasions called for a review of the agreement and insisted that it would deny the country the needed revenue for development, and show less commitment towards community development.

    The agreement

    Government in February this year signed a fiscal and development agreement with AngloGold that provides the framework for the redevelopment of the Obuasi mine.

    In the agreement, AngloGold will not be paying royalties at the current five per cent but three per cent, and has a US$177 million waiver on imported items, due to a tax cut of 32.5 per cent as opposed to the flat rate of 35 per cent.

    Initial expenditure for the project, excluding production cost, is estimated to cost between US$450 and US$550 million and it is expected to create about 2,500 jobs.

    The processes

    According to Dr Graham, who is also the Coordinator of the Third World Network (TWN-Africa), “the two documents on the agreement are basically a rehash of the government’s memorandum which covered the document that was sent to Parliament”.

    He said the Parliamentary Finance Committee, made no reference at all to the arguments submitted by the Ghana Mine Workers Union (GMWU) and the Coalition, but completely ignored the primary argument that had to do with the legality of the fiscal concessions and the lack of an economic justification for them.

    “They only picked the fact that we want the laws to be reformed.

    I think that it is deliberate and it raises questions as to whether Parliament is serious when it invites people to submit their opinions.

    If they go through this caricature of a process, they are undermining the credibility of Parliament,” he said.

    To him, it would be fair for the committee to say that these were the main arguments that these people made and having looked at their objection, it, however, concluded that the agreement was justified, and they, therefore, recommended.

    “The whole world can then evaluate the justification. But to misrepresent the argument that people make is not a proper way for the parliamentary committee to proceed.

    It makes a mockery of their oversight function and undermines the credibility of Parliament as representing the interest of the ordinary people and a check on the government,” he indicated.

    Claims

    Dr Graham alleged that claims by the Chairman of the Committee, Dr Mark Assibey Yeboah, that it was a better agreement to anything negotiated by the previous government, missed the point completely, accusing him of “operating within a cocoon of an NDC / NPP measurement.”

    He said that the citizenry was not caught up in that ‘bogus’ argument.

    “We are saying that there should be an independent standard to which every government is held.

    Are you meeting it, or you fall below it? It doesn’t matter what your predecessor did and this arrangement falls below any acceptable standard in terms of the current policy orientation that everybody is agreed in relation to minerals,” he stated.

    Dr Graham said the agreement was disgraceful, judging by the standard set by President Akufo Addo in his recent pronouncement about the use of natural resources and the disgraceful state of mining towns such as Obuasi, Akwatia and Tarkwa.

    Minority stance

    The Minority Spokesperson on Finance, Mr Cassiel Ato Forson, said the deal was badly negotiated and that Ghana would lose more than US$300 million.

    “The intention is that AngloGold is going to invest $880 million to revamp the Obuasi mines. They are saying that the project will not be viable until the government of Ghana decides to grant them a tax concession worth $259 million dollar,” he said.

    Profile photo of Graphic

    Graphic

    The Daily Graphic is a Ghanaian state-owned daily newspaper published in Accra, Ghana.
    With a circulation of 100,000 copies, the Graphic is the most widely read daily newspaper in the country
    Profile photo of Graphic

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