Elite Capture: A Major Threat to Ghana’s Extractive Sector

Gold bars

Accra, Ghana, August 31, 2020//-Ghana which is endowed with mineral resources such as gold, diamonds and manganese, oil and gas has benefited significantly less from the resources.

Although they boosted the country’s economic growth over the years, citizens in these resource-rich communities are not benefiting enough from the resources.

Some of their elite brothers and sisters who are connected to power are swimming in the wealth of the resources while their counterparts in the resource communities are struggling to cope with the negative impacts of the resource extractions.

Participants agreed at a two-day workshop for some members of Institute of Financial and Economic Journalists (IFEJ) and Ghana Journalists Association (GJA) organized by the Secretariat of Ghana Extractive Industries Transparency Initiative (GHEITI), that the country was a victim of elite capture.

Dr Steve Manteaw, Co-Chair of GHEITI, the Ghana subset of the global EITI, added that elite capture in the country’s extractive sector was ripe.

“Ironically, poverty is more endemic in countries that are rich in natural resources and this largely due to elite capture”.

Those who have to take decisions on behalf of the citizenry go to take decisions that benefit them personally. So the benefits of extraction that will go to the country at large will go to those individuals alone, he added.

Dr Manteaw, like many Ghanaians, does not understand why a country like Ghana which has been mining gold for over 100 years was declared a Highly Indebted Poor Country (HIPC) around 2001.

“So, you can mine gold for over 100 years and become HIPC. All of us became HIPC in 2001” accept those who surcharged the country were above HIPC.

The latest case of elite capture of the state is the controversial Agyapa Minerals Royalty Limited deal between the Ghanaian government. The deal has generated hue and cry in the West African country.

Two years ago, despite minority walkout, Parliament passed the Minerals Income Investment Fund Act 2018 which establishes the fund to manage the equity interests of Ghana in mining companies, and receive royalties on behalf of the government.

The purpose of the fund according to the government is to manage and invest these royalties and revenue from equities for higher returns for the benefit of the country.

The law also allows the fund to establish Special Purpose Vehicles (SPVs) to use for the appropriate investments.

Just this month, the government approved an amendment to the act to ensure that the SPVs have unfettered independence. This development doesn’t go down well with opposition politicians, civil society organizations, among others.

The multibillion dollar deal is reported to have been linked to the son of Senior Minister, Yaw Osafo Maafo. Essential documents related to the Agyapa Minerals Royalty deal have been hidden from the public.

Warning

So when politically exposed persons getting involved in extractive business, the citizens and the media shine their eyes, Dr Manteaw warned.

“If you are a politically exposed person that doesn’t mean that you should not do business, you must live but your business must be opened and transparent”.

He continued: “We are not saying that the politically exposed person Agyapa should not do business but the rules of good governance say that if the person is politically exposed person is related to you a highly placed person in government; first foremost, all those associates must recuse themselves from the process of selection”.

Secondly, head-hunting is out of the question. This is because it can be manipulated by the authority or the one in-charge.

Therefore attempts to justify the selection of Kofi Marfo, the son of Senior Minister as manager of the fund are untenable.

“If the person is really good, advertise and let those who think they are better to come and compete with him and if he comes out top, we shall all accept the outcome. That is good governance”.

Another classic elite capture issue raised by the expert is the missing GHC1.5 billion of oil revenues trusted in the care of the present government since 2017.

If they can find the money, they can use it to do so much for this country, Dr Manteaw stated.

How elite capture is addressed

So, elite capture! When all the ordinary citizens get involved in the decision of resource extraction, they will be able to deal with the challenge of elite capture, according to him.

Because there will be transparency in all the processes of awarding contracts and among others.

“So you will see that as the EITI evolves we now come to a point of beneficial ownership disclosure which has become very popular in Ghana” within the last few days.

The Beneficial Ownership Register (BOR) which is expected to be launched about October this year, according to Samuel Bekoe, a consultant at EITI would enable Ghanaians to know the real owners of the big companies.

He added that the BO register would ensure that information is available to competent authorities based on request.

By Masahudu Ankiilu Kunateh, African Eye Report

 

 

 

 

 

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