Incorporation of Agyapa Royalties into offshore company worrying – Minority

The Minority Leader in Parliament has expressed worry over the incorporation of the just approved Agyapa Royalties Limited agreement into an offshore company.

This follows calls by the minority demanding for an independent probe into the valuation rights of the Agyapa Royalties transaction.

Speaking at a press briefing on Tuesday, September 1, 2020, Minority Leader, Haruna Iddrisu said tax havens are susceptible to money laundering thus the transaction poses a risk.

“Tax havens are generally known for their lack of transparency in the matter of corporate governance such as disclosure of the beneficial ownership of the share of the companies and this elevates risk of Ghana being listed as a money-laundering jurisdiction by international bodies,” he explained.

“Ghanaians will recall that on May 2020, the European Union placed Ghana on its Anti-Money Laundering List but deferred the implementation to October 1, 2020 due the COVID-19 pandemic. By setting up a sovereign wealth fund in a tax haven, the Government of Ghana elevates the Ghana being considered as money-laundering jurisdiction,” Haruna Iddrisu added.

He further intimated that many individuals and businesses use tax haven such as the one incorporated in Jersey in the Agyapa Royalties transaction to hide their income and avoid paying taxes.

Prior to approving the Agyapa Royalties transaction, Parliament in 2018 passed the Minerals Income Investment Fund (MIIF) Act 2018 which establishes the Fund to manage the equity interests of Ghana in mining companies and receive royalties on behalf of government.

The sole purpose of the fund is to manage and invest these royalties and revenue from equities for higher returns for the benefit of the country and government through (MIIF), established the Agyapa Royalties Limited to monetise Ghana’s natural gold and mineral resources.

According to the Finance Minister, the Agyapa Royalties transaction is 100 percent owned by the MIIF, an entity that is also solely owned by the government of Ghana prior to its approval in Parliament on August 14, 2020.

In exchange for that, the company aims to raise between US$500 million and US$750 million for the Government on the Ghana and London Stock exchange’s intended for development projects.