The Mineral Income Investment Fund (MIIF), according to Dr Steve Manteaw, Co-Chair of the Ghana Extractive Industry Transparency Initiative, has not addressed issues related to managing Ghana’s mineral revenues.
With the intention of addressing Ghana’s careless handling of its mining profits, MIIF was founded.
Dr Steve Manteaw made the statement while addressing journalists from the Institute of Financial and Economic Journalists during a Technical Workshop on the 2019 GHEITI report on Mining and Petroleum (IFEJ).
He claimed that the MIIF has not lived up to the promises made by the Nana Akufo-Addo-led administration when it was in opposition to creating a framework for managing mineral revenues similar to the Petroleum Revenue Management Act that assures transparency and provides for future generations.
“It is unfortunate that after 100 years of mining, Ghana ended up as a Highly Indebted Poor Country (HIPC), which speaks volumes about how badly we mismanaged our mineral revenues.”
“First and foremost, we have lived recklessly, failing to invest the majority of our mineral revenues in capital projects and infrastructure, ensuring that at the very least those investments return dividends that have a multiplier effect across the economy. As a result, the majority of our mineral revenues have gone toward recurrent expenditures, resulting in us treating our mineral revenues as income for consumption rather than income for investible income.”
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“In contrast to the Petroleum Revenue Management Act, PRMA, which states that when the oil resource is depleted, whatever remains in the Petroleum Holding Funds, thus the Stabilization Fund and the Heritage Fund, will be combined to form the Ghana Resource Fund, which will be invested, and we will live off the returns of those investments in perpetuity.”
That is how you ensure the long-term benefits of your resource extraction, but with gold, we have lived recklessly and spent nearly all of what we earned from it. So, if the gold is completely depleted, we will have nothing to live on in the coming years. That is not an effective way to manage your mineral resources. “All of these things have conspired to deny us the full benefits of our gold,” he explained.
While it was expected that the lessons learned from poor management of gold and other mineral resources would be factored into the MIIF, he stated that it does not specifically provide for the future in a transparent manner.
“We attempted to correct them through the design of the Petroleum Revenue Management Act” (PRMA). For example, the PRMA established the Stabilization Fund to address the budgetary volatility caused by petroleum revenues. Gold revenues are equally volatile as we speak, but there is no framework, not even in the MIIF, to deal with the volatility effect of gold revenues on our budget, and that gap remains.”
“The PRMA established the Heritage Fund once more to protect future generations intergenerational interest in the gold resource, but we don’t have that arrangement in the mining sector or the MIIF.” So it’s time to do for mining what we’ve done so brilliantly for oil: provide mechanisms for citizens to obtain information about how mineral resources are managed, and then use that information to hold duty bearers accountable for their actions and inactions in terms of mineral revenue management in this country,” he said.
Dr. Manteaw went on to say that it is very concerning that the MIIF only manages about 3% of the gold revenues, which are royalties, leaving other mineral revenues such as capital gains, among others, unmanaged.
Concerns raised in the 2019 GHEITI report on mining and oil and gas included delays in the allocation of mineral royalties to District Assemblies by the Office of the Administrator of Stool Lands, inconsistencies between what the government declares as gold export and what gold receiving countries report, and a call to incentivize citizens’ activism on proper utilisation of petroleum and mineral resources.
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