¢90BN ROYALTY CASH MISSING – from Bank of Ghana vaults
By: Sebastian R. Freiku, Kumasi
THE PAYMENT of mineral royalties by the government to beneficiary district assemblies and traditional councils in the country has stalled for close to one year now, for lack of funds.
Even though it is supposed to be paid quarterly, payment has accumulated since August last year, against the fact that mining companies pay royalties to the Minerals Commission on a monthly basis.
The Chronicle can report that frantic efforts by the concerned authorities to settle payments for the last two quarters of last year have not yielded any positive result, because the Consolidated Fund seems empty.
As at the weekend, a total amount of GH¢8,998,403.37, being 10% of GH¢89,964,033.69 mineral royalties collected by the Ghana Revenue Authority (GRA) for the months of August, September, October, November and December 2011, and ceded to the Administrator of Stool Lands for disbursement to the beneficiary stools, had not been transferred from the Consolidated Fund into the Office of Administrator of Stool Lands Account, lodged at the Bank of Ghana for disbursement, as authorised by the Ministry of Finance.
Last year, the GRA, per Mrs. Comfort Boohene-Osafo, acting Commissioner, in a letter dated November 2, 2011, informed the Ministry of Finance about the total collection of GH¢13,651,662.31 by its Domestic Tax Revenue Division, which was ceded to the Administrator of Stool Lands.
Information from available documents indicate that a total of GH¢889,107.08 was realised from royalty collection for the month of August last year.
In the Greater Accra Region, for instance, a total of GH¢74,157.06 was collected from Gold Recovery Ghana Limited (GH¢60,692.03) and Cedar Quarry Company Limited (GH¢13,465.03).
A total of GH¢58, 661,155.26 was raised for October 2011. Out of this, GH¢284,666.74 had accrued from Shenyang Salt Industries in the Central Region (GH¢632.20); Sand and Stone in the Eastern Region (GH¢244.00) and Mydroc Salt Industries (GH¢1,518.75), Weir Millicent (GH¢800.00) and Central Ashanti Gold (GH¢281,471.79) all in the Greater Accra Region.
The DTRD Commissioner had requested the Finance Ministry to authorise the Bank of Ghana and the Controller and Accountant General to transfer the said amount (GH¢13,651,662.31) to the Administrator of Stool Lands for disbursement.
For the month of January 2011, the GRA collected total royalties of GH¢76,332,371.38, of which GH¢7,633,237.14 was paid to the Minerals Commission.
The Chronicle can report that Anglogold Ashanti Limited (Obuasi Mine) paid promptly on October 2011 a total of royalty of GH¢5,533,436.55, being three per cent of its bullion revenue (ounces of gold sold) for the July-August- September quarter of last year.
In spite of these details, the beneficiary stools keep on chasing the funds in vain, over the months.
Last June 11, 2012, Ms. Grace Adzroe, Deputy Controller and Accountant General in charge of Finance and Administration, directed the Bank of Ghana, through the Director of the Banking Department, per a letter referenced C2/BTA/G & S/12/3732, to transfer the sum of GH¢8,998,403.37 from the Ministry of Lands and Forestry account into the office of Administrator of Stool Lands to facilitate the payment of 10% mineral royalties collected by GRA for the months of August to December 2011, but there were no funds available at the Bank of Ghana, as the GH¢8,998,403.37 is not traceable.
The said advice had to be returned to the Controller and Accountant General, and delegates of the beneficiary stools are threatening a showdown with the Ministry of Finance over the delay in the payment of royalties this week, against the fact that mining companies had dutifully paid royalties promptly and in full to the government, through the GRA and the Minerals Commission.
The Chronicle has gathered that the non-payment of royalties to the stools over the past one year has stifled development projects initiated by some of them.
While the government imposes a penalty on defaulting companies who do not pay royalties promptly, no interest accrues on accumulated funds held by the government.
Of the 10% mineral royalty, 1% goes to the Administrator of Stool Lands for administrative purposes, while the beneficiary district assemblies enjoy 55% of the remaining 9%, with only 45% (of 9%) going to the traditional councils for development.
Section 25 of the Minerals and Mining Act 703 of 2006, stipulates a mining royalty of not more than six percent or less than three percent of the total revenue obtained from mining operations, but mining companies operating in the country, whether big or small, have been paying the minimum of three percent to the government.
In 2006, the mining companies contributed US$780 million to government’s coffers, with AngloGold Ashanti spending US$5 million more on the health sector, while Gold Fields spent US$3 million on a soccer team.
Newmont and Golden Star reportedly spent US$4 million and US$3.6 million respectively on social corporate investments.
In 2011, the mining firms paid GH¢179,978,383 to the government as revenue, representing more than 14 percent of the country’s total internal revenue collection.
The mining companies also paid about GH¢73 million, representing three percent of mineral revenue, as taxes, levies and duties on their products to the government, as well as margins to the oil marketing companies.
In March, this year, Dr. Toni Aubynn, Chief Executive Officer (CEO) of the Ghana Chamber of Mines, proposed during the inauguration of the New Salman township, constructed by Adamus Resources Limited at Salman, a 25% increase from the five percent royalties paid by mining companies to the district assemblies to 30 percent.
This, according to him, was to enable the various district assemblies obtain resources to undertake more development projects, and improve the standards of living of the mining communities.
His proposal was premised on the need for the government to direct attention to mining communities, since 28 percent of the country’s revenue emanated from the mining sector.
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