President John Dramani Mahama said the renegotiation of the stability agreement was crucial because the existing one between the government and the mining companies lasted for up to 20 years.
As a result, he said, even if the prices of gold and other resources went up on the international market, the mining companies stuck to the same amount of royalty.
President Mahama was speaking yesterday during a courtesy call on him by members of the Economic Commission for Africa High Level Panel on Illicit Financial Flows from Africa. The nine-member delegation was led by a former South African President, Mr Thabo Mbeki.
The High Level Panel on Illicit Financial Flows from Africa was formed, in collaboration with the African Union, in 2011, to engage with African leaders to find measures to deal with illicit financial transfers from Africa.
Members are in the country for a consultation meeting on illicit financial inflows for 25 countries from West and Central Africa. The meeting is to raise awareness of the issue and come up with appropriate recommendations to deal with it. They had earlier held a consultation meeting in Tunisia for north African countries and another one in Zambia for south and east African countries.
Africa has been losing $50 billion a year in the last 10 years from illicit financial inflows. The major culprits of illicit financial inflows are transnational companies.
President Mahama noted that the competition among countries to attract investment in the extractive sector encouraged mining companies to sign the stability agreement with very low royalty for the countries.
Fortunately, he said, many of the countries had now realised the harm. He said gold was a non-renewable resource, hence the need for the country to renegotiate the stability agreement to enable it to get a fair share from the resource. He said many of the companies had agreed on the renegotiation and indicated that the government was in the process of doing so.
The President expressed worry that many foreign companies flouted the seven-year tax break that was given to them. For instance, he said, just before the seven years, the companies changed ownership, which meant that the country could not get any tax from them. President Mahama said the Financial Intelligence Centre which had been tracking the movement of money in the country had made some arrests, while investigations were ongoing. Besides, he said, the Bank of Ghana was monitoring illicit financial transfers.
Parliament President Mahama said critical issues, such as illicit money transfers, could be best dealt with from a continental level, instead of dealing with them at the level of individual countries. He, therefore, advocated the empowering of the Pan African Parliament to pass laws that the member countries could domesticate in their respective parliaments.
In his remarks, Mr Mbeki said Africa lost a lot of capital through illicit money transfers. “If we can retain the money, it will help us address our development challenges,” he said. The former South African President said it was necessary to have a close look at the issue of illicit movement of money and make recommendations on what should be done to address the issue in Africa. He underscored the need for civil society organisations to liaise with the government to deal with illicit money transfers.
Get the latest news and updates on Ghana’s oil and gas value chain by following us Reporting Oil and Gas on twitter @oilgasghana and like our facebook page and get at us on Google+. Subscribe to our group to get update