Use mineral royalties only for development projects

Nii Lante Vanderpuye, Deputy Minister for Local Government and Rural Development, has cautioned against the use of mineral royalties of mining communities for financing the administrative expenses of Metropolitan, Municipal and District Assemblies (MMDAs).

In a speech on behalf of the Minister for Local Government and Rural Development, Mr Vanderpuye said in spite of the financial challenges being faced by the MMDAs, the use of mineral royalties to cover their administrative and operational expenses would be “disastrous”.

The Deputy Minister gave the caution at a stakeholder workshop on the Implementation of Royalty Utilisation guidelines by the Assemblies in Accra.

He cited the Auditor General’s report, which has recommended a departure from the practice and instead advised the use of mineral royalties to finance infrastructure and development projects in the mining communities.

He also complained about the slow pace of development in some mining communities.

He said: “Obviously, one of the greatest resources this country has is its mineral wealth. It is, however, unfortunate that after over hundred years of mining in Ghana, we are still struggling to provide our mining communities with decent infrastructure”.

The Deputy Minister noted a gap between the expectations of mining communities and the flow of revenue to the communities.

It is for this reason the Ministry of Finance and the Ghana Extractive Industries Transparency Initiative (GEITI) organized the workshop, aimed at implementing guidelines, which would ensure that mineral royalties are utilized effectively.

The Chief Director of the Ministry of Finance, Major M. S. Tara (Rtd) stated that GEITI’s reports had identified many challenges in the mining sector, including low royalty rates, lack of payment of concession ground rent, misuse and lack of proper accounting of royalties sent back to the districts.

He emphasized the need for transparency in the extractive sector and expressed optimism that the guidelines would contribute more to the development and the provision of the economic and social needs of mining communities.