Unhealthy comments on the Agyapa deal likely to stifle investor confidence - Economist

Finance Lecturer at the University of Ghana Business School, Dr. Lord Mensah, has said negative pronouncements on the Agyapa deal is likely to beat down the interests of potential investors.

Parliament on August 14, approved the Agyapa Mineral Royalty Limited agreement with the government of Ghana despite a walkout by the Minority.

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

The Agyapa deal has been met with a lot of controversies from Civil Society Organisations as well as political opposition.

Speaking in an interview with GhanaWeb, economist Dr. Lord Mensah said the controversial comments about the deal could weaken investor confidence.

“The investor sitting elsewhere deals with information and obviously the Agyapa deal has been in the media. It has some political undertone. If you look at the structure, Ghana is the highest shareholder of the deal which gives the deal a sort of politics. Investors will definitely be concerned because change in government could have an effect on the deal.”

He further questioned the openness of the deal, describing it as lacking transparency.

“The idea is good, the concept is good but there is a transparency issue. Even with how the Special Purpose Vehicle (SPV) was formed. Good investment thrives on transparency.”

The Agyapa Royalties deal

Two years ago, the house 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 purpose of the fund is to manage and invest these royalties and revenue from equities for higher returns for the benefit of the country.

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

Last month, government introduced an amendment to the act to ensure that the SPVs have unfettered independence.