Towards Better Management of Natural Resources for Inclusive Growth and Dev’t

CEO, Ghana Chamber of Mines, Sulemanu Koney

Accra, Ghana, December 18, 2018//-It is a great privilege to be present amongst you this evening, as we honour excellence in financial and economic reporting in Ghana.

The IFEJ-Flamingo Awards is an important part of developing the standards of journalism in Ghana but it is even more crucial because it encourages all our business, financial and economic reporters to present to well-researched and valuable information for decision-making and development.

I salute all nominees for your exceptional output during the year under review and keeping the populace abreast of the happenings in the heartbeat of the country – the economy.

Today’s event is on the theme:“Towards Better Management of Natural Resources for Inclusive Growth and Development”, and I believe you could not have chosen a better theme at this stage of our development.The year 2018 also marks the 90th anniversary of the Chamber through its journey in the Gold Coast till today. Congratulations to all members, officials and friends who have played diverse roles in making the celebration successful. The media has been an integral part of our celebration so please give yourselves a big round of applause.

It is now a cliché to say that Ghana is endowed with natural resources. It is therefore no longer fashionable to talk about our God-given resources, if we are not going to ensure that such resources are sustainably and responsibly exploited for the benefit of all citizens with minimal, or no negative consequence to the environment.

Permit me to spend a few minutes to share some thoughts with you about the Ghana Chamber of Mines. For nine decades, the Chamber’s role as a leading mining business association has been checkered but exemplary.

The Chamber’s intimate connection with the mining sector has resulted in many partnerships with key state and private institutions.

Our reputation, built on the back of decades of ideation and upholding the interests of stakeholders is widely acknowledged in much the same way as the mining industry’s contribution to national development cannot be over emphasized.

It is a fact that the extractive sector is no longer a large employer of labour due to improvements in technology and innovation but it continues to be a catalyst for job creation if we are able to harness the opportunities in its value chain.

The extractives sector, especially mining, can help to rapidly grow our manufacturing and fabrication sectors in particular and expand wealth-creation opportunities for our people.

In 2017, the minerals and mining sector retained its position as the foremost source of direct domestic revenue mobilized by the Ghana Revenue Authority (GRA).

Information from the GRA shows that except in 2014, the mining sector has been the largest domestic tax base for the country for the past six years.

In fact, the total fiscal receipts attributable to mining and quarrying sector increased from GHS 1.65 billion in 2016 to GHS 2.1 billion in 2017. In terms of share of total direct domestic revenues collected by GRA, the mining and quarrying sector accounted for 16.3 per cent of those revenues in 2017.

The extractives sector plays a critical role in providing reliable and steady supply of foreign exchange to finance the import demands of the country and in maintaining a stable exchange rate for our local currency.

This is particularly important due to the fact that movements in exchange rates have an impact on the standard of living through its effect on price levels.

Data from the Bank of Ghana (Bank of Ghana, 2018)further indicates that proceeds from the export of minerals increased by 19 per cent to US$ 6billion in 2017 from US$ 5 billion in 2016.

Against the backdrop of a strong export revenue performance, the share of mineral and oil receipts in total merchandize export in 2017 was 66 per cent.Of this, mineral receipts accounted for about 34 per cent more than the combined contribution of oil and gas and cocoa.

This demonstrates that the extractive sector especially mining plays an integral role in keeping the currency and businesses afloat.

This evening I wish to share a few thoughts with you on the importance of managing Ghana’s natural resources to create real and tangible value for all citizens. I will continue to emphasize the position that, as a nation, the debate about whether our natural resources benefit its people has lost its relevance because the evidence through statistics is obvious.

Today, the debate is about sustainability, accountability and transparency. The extractive industry provides many of us with a source of living; and therefore our collective responsibility to ensure that generations yet unborn are bequeathed with a legacy of fulfillment and not of deprivation.

Sustainability

Why is sustainability a vital cog in managing the natural resources of a nation? In 1983, the United Nations tasked Gro Harlem Brundtland, a former Prime Minister of Norway to head the new World Commission on Environment and Development and to investigate the level of economic development at the cost of ecological health and social equity.

At that point, it was evident that the world needed to find a way to harmonize our quest for economic development using our natural resources with a responsibility to the environment in tandem.

After working for eight years the “Brundtland Commission” released its final report in which sustainable development was defined as: “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

Globally, governments and businesses now converge at that common nexus of ensuring that a nation creates the needed avenues to identify innovative and scientifically proven ways to undertake the extractive business in a sustainable and responsible manner; and Ghana cannot be an exception.

Now more than ever, we are enjoined by common sense, science and the vision of a fruitful future of the next generation to ensure that our exploitation of natural resources are tied to the economic transformation of the country along with the attainment of social equity in all our endeavours.

In the light of challenges the extractives sector continues to face in recent times in Ghana, it is essential to ensure that the value we derive from natural resources is rooted in responsible extraction practices and progressive regulatory regimes without losing sight of the significance of the sector to the socio-economic development of this nation.

There is also a sense that extractive operations are only interested in their bottom-line to the detriment of the larger society and the ecology.

That might have been true some three decades ago, but today a mining company listed on the Ghana, Johannesburg, Toronto or New York stock exchanges cannot afford to be irresponsible because the consequences could render its business unattractive to investors.

Frankly, every modern miner, for example, is aware that operational efficiency does not amount to much if the business process is not integrated with sustainable practices such as strict adherence to health and safety standards, environmental regulations and reliable livelihood support initiatives.

In the last few years we have come to the realisation that profitability does not and cannot take precedence over sustainability among large-scale member companies of the Chamber.

This is mainly due to the efforts that they make overtly and covertly to ensure that their operations catalyse local development and financial empowerment.

Please do not get me wrong: Profit is at the core of our business but people and environmental sustainability are at the heart of a mining business in the 21st century.

The only way we can thrive in using our natural resources to quicken the pace of our development is if we do so through a concerted and deliberate strategy to harness the linkage opportunities between the extractives sector and the non-extractive sector of the economy.

Accountability

The next point is accountability. For me, accountability is the ability to prove one’s stewardship in the use and management of resources.

Transparency Initiative describes accountability as the “process of holding actors responsible for their actions.” Broadly, accountability refers to the situation where individuals, agencies and organisations are held responsible for performing their duties or otherwise according to acceptable standards set either by law or by policy.

But why is Transparency an essential element in natural resource governance? Imagine this: You live in a rented house and your landlord takes a yearly rent from you.

In the contract, your landlord is responsible for fixing all defects in the building and paying for all utilities. Unfortunately, your landlord reneges on that responsibility even though you pay your rent without fail.

I am sure as tenants we will not fold our arms and watch the landlord misuse our funds without question. The bold ones among us would want to know why the house is falling apart despite paying the rent religiously.

We all agreed from the onset that our oil and gas resources must be managed meticulously if the country is to obtain the necessary benefits from the God given endowment.

We ensured that the Petroleum Revenue Management Act 2011 (Act 815) was passed to regulate how revenue from oil and gas is used and accounted for by the managers of the national purse.

Through the setting up of the Public Interest Accountability Committee, we receive periodic updates on what our petroleum revenue is used for.

Unfortunately, we cannot say the same for the mining industry. How many of us here can tell us how much revenue from mining we have returned to Obuasi, Tarkwa or New Abirem from the consolidated fund?

We however ask the very critical question of why Obuasi is not as beautifully developed as Johannesburg. The media has a significant role to play as society’s foremost watchdog in tracking the use of mineral revenue in all these communities in order to help bring tangible development to ourpeople in host communities.

Accountability requires that we demand from our leaders the right to know the ways our resources are utilized and to make relevant inputs into the areas that matter to us.

Without the requisite legal framework on accountability in the management of mineral resources, we will continue to sigh in frustration at the state of host communities across the country.

Host communities and those in close proximity to mineral resources must directly benefit from the resources, hence theydeserve the right to know how financial resources meant for their welfare are used.

Without a clearly stated accountability framework, it will be nearly impossible to sanction people who misapply or misappropriate mineral revenues, and in effect perpetuate the cycle of neglect and disregard for mining communities.

In this regard, we reiterate our call for the enactment of a Minerals Revenue Management law to complement the Minerals Development Fund Act.

Furthermore, we urge the speedy inauguration of the Board of the Development Fund to ensure the realization of the noble objectives of the law Act 912, which was promulgated in 2016.

Transparency

My final but most important point is transparency. In all facets of our lives, we ought to be open and honest in engaging the next person. This is even more crucial for duty-bearers and people in leadership positions.

In today’s parlance, transparency is “show and tell” and not just “tell”.  We must be open in the clear disclosure of information to promote participation in all decision-making processes to enhance the quality of ideas produced for national development.

At the Ghana Chamber of Mines, we endeavour to produce reports that contain a holistic view and performance of the mining industry in Ghana. Usually, our goal is to furnish the public with as much useful and decipherable information to facilitate all forms of public engagement.

Transparency requires that we keep the public abreast of occurrences in the sector. In-fact, for us to achieve effective accountability, we need to know of the relevant issues in order to take appropriate decisions.

I am aware of the advocacy on the Right to Information Bill, which when passed into law, is expected to make our governments and their agents responsible for furnishing the public with specific information upon request.

This, we believe, will be a major breakthrough for us in the industry and journalists will find it a lot easier to glean information about the industry from the agencies of the state.

One of the initiatives that the Chamber performs yearly is the publication of the fiscal contribution and expenditure of our producing members in the national newspapers (Publish What You Pay).

By so doing, we make available to the public the kind of information that hitherto will be next to impossible to find.

Conclusion

These three pillars – Sustainability, Accountability and Transparency are crucial to effective management of natural resources for a nation that desires to reach the goal of inclusive growth and development.

Of a truth, inclusive growth and development will be an illusion if a concerted approach is not developed, anchored by the state apparatus, and oiled by the private sector to deepen sustainability in every aspect of natural resource development.

We must not forget that this includes the expansive and deep integration of the extractive sector into the non-mineral sectors of the economy if we are to achieve economic growth, social equity and ecological equilibrium in a sustainable manner.

I would like to conclude by challenging all of you to request for information from companies in the extractive sector.Over and above that, we will rely on you to expand your advocacy to hold our duty bearers accountable for the management and exploitation of our natural resources.

We may ruffle some feathers, but we will ultimately be heroes in playing our part in safeguarding today for tomorrow.

To all award winners, you have excelled, and this is a crowning moment for you. I know the IFEJ platform is a huge exposure but I implore you to look beyond the corridors of our nation into the light of the continent and the globe.

The more we play our roles well, the more our dear nation deepens its foothold as the toast of the continent.

I wish you all a fun-filled evening and a Merry Christmas and a Prosperous New Year  in advance. Thank you for your attention.

This speech was delivered by Mr Sulemanu Koney, Chief Executive Officer, Ghana Chamber of Mines at the fifth Institute of Financial and Economic Journalists (IFEJ)-Flamingo Awards held on Friday, 14 December 2018 at the World Bank premises in Accra, Ghana.

He was the Guest Speaker of the event.

 

 

 

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