The relative success of the Petroleum Revenue Management Act evidenced by improved capital investments of oil revenues; fiscal discipline and enhanced CSO monitoring of investment of oil-funded projects in communities across Ghana is notable.
Against this backdrop, it is certain that a similar law for mining – Mineral Revenue Management Act will help track resources coming from our mining sector to perhaps change the fortunes of many mining communities across the country.
A drive through cities like Tarkwa, Obuasi and other mining communities is heart breaking. Despite Ghana’s vast mineral deposits—second largest gold producer in Africa, the communities in the mining regions have little to show for the wealth under their feet. Residents of Tarkwa, frustrated with the state of bad roads in their city recently prevented a government minister from entering the city.
In as much as the unlawful act of these residents are condemnable, the reality of residents living with notoriously bad roads, social unrest and land degradation is exasperating to say the least.
As it stands now, the government lacks the consolidated framework to transparently collect, manage and share the revenue it raises through fees, taxes and other mining income. In 2015, the government received GHS 485.63 million (approximately $103 million) from mining royalties. There were Indications that this money is generally used to cover immediate government expenditures, such as payroll and debt, rather than fund critical infrastructure projects or fuel investment in these mining communities.
Drafting and passing a Mineral Revenue Management Act into law would only begin to address some of the issues like the bad roads, environmental damage, gender inequalities, health risks and rights violations brought on to communities by large-scale mining.
Moreover, the proposed act would reduce the opportunity for graft and political favoritism. The act would also create an investment “heritage fund” so that all Ghanaians might reap the benefits of mining well after the resource is depleted.
The implications of mining are multifaceted. Plying major roads in some of these mining cities is not only frustrating but dangerous as well. For instance, drivers refer to the stretch of road connecting Tarkwa to the regional economic hub Takoradi as a “death trap” and residents complain about the side effects of the severe dust left in the wake of the mining trucks.
Minister of Energy, John Peter Amewu indicated in one of his interviews that “For purposes of mining governance, transparency, equity, and fairness to the owners of resources, it is proper the owners should be able to query government what their revenue have been used for.” The August 7 edition of the Daily Graphic opinion article reiterated the need to bring some transparency around minerals revenues and support this Bill. The Ghana Chamber of Mines has added its voice and called on the government to draft and pass the legislation. New interest in iron and bauxite has the potential to bring revenue to the country but not if the government relies on the goodwill of mining companies at the expense of real legislation.
There is the need for the Mineral Revenue Management Act to come to force so civil society groups, individuals and Ghanaians at large can monitor what exactly we are reaping after so many years of mining.
By Andrew Bogrand, Senior Communications Advisor and Francis Agbere, Extractive Industries Program Manager