November 23, 2017

Ghana considers consolidating bank accounts for mineral royalties

Two organisations in Ghana, Ghana Extractive Industries Transparency Initiative (GHEITI) Secretariat and Ghana Extractive Industries Transparency Initiative ), are pushing for the consolidation of bank accounts for mineral royalties.

Kweku Boa-Amposem, who is the head of consulting firm Boas and Associates – the GHEITI Aggregator, insists that having a dedicated account in place will make it easy to track the utilisation of mining funds at the sub-national level.

To facilitate the changes, the Ghana Extractive Industries Transparency Initiative (GHEITI) Secretariat and Multi-Stakeholder Group (MSG) will commence discussions with the Ministry of Finance to relax its directives to Metropolitan, Municipal and District Assemblies (MMDA) to create single treasury accounts.

This should allow MMDAs, which host mining activities, to comply with the GHEITI aggregator’s recommendation for the creation of special accounts for holding mineral royalty funds transferred from the Mineral Development Fund (MDF).

In the GHEITI Report on the Mining Sector 2014, the aggregator observed, in relation to dedicated bank accounts for royalty disbursements, that “District Assemblies continue to receive mineral royalty disbursements into the main account (normally IGF Account) of the District. Where the districts have designated accounts for royalty receipts, other transactions are also carried through that same account.

It added: “Again some of the District Assemblies transfer some amounts of royalty receipts back to the IGF account.”

Consequently, it was recommended that “The District Assemblies should have dedicated bank accounts for mineral royalty receipts. These accounts should be used exclusively for mineral development purposes.”

Ghana faces the challenge which other resource-rich countries experience in Africa. Billions of dollars in revenue do not filter down to the average citizens in rural who still lack access to basic services like quality water, health and education.

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