$259 Million Tax Exemptions for AGA is a Misguide - Part 1 | AK Mensah

Per the latest Stabilisation agreement with AngloGoldAshanti (AGA), AG will over the next 10 years, REPORTEDLY enjoy a $40 million waiver on royalties. A $2 million in income tax exemption, $56 million in capital allowances due in 2020 and 2021 and import duty exemption of $161 million. That’s $259 million in total. AGA says it will operate for 20 years. The Government’s argument was: "ALL these incentives will ENABLE AngloGold TO INVEST  $881 MILLION DIRECTLY INTO MINING operations in Ghana and IT WILL HELP MAKE THE COMPANY MORE PROFITABLE and generate more than $5.3 billion dollars for the Ghanaian economy."

You will bear with me that almost every policies made in this country are ones to benefit foreign entities rather than the indigenes themselves. Talk of passport acquisition, birth certificate acquisition, travelling around and business registration in Ghana. It is easier for a foreigner to registerbusiness in Ghana than the indigenes themselves. Anglogold Ashanti (AGA) is typical example of "mining enclaves". All the other characteristics- be they economic, social and environmental consequences associated with enclave economies will emerge here.

The consequent repercussions from their mining activities will be borne by the mining communities. Again, check how much of the gross mining revenue/royalties (3 % of total gross) is paidto the mining communities, where their operations take place (2.5 %). At the end, they leave their air, water, soil, land, ecosystem and watershed polluted.

Amidst heinous social impacts! Then again, one will ask the extent of public consultation and affected communities' participation in this decision, which deleterious effects will be ravaging on these affected communities. Meanwhile, the artisanal small scale mining business which is solely made and reserved for the indigenes, rightly contained in the amended mining law, Minerals and Mining Act of 2006 (Act 703), is criminalised, depriving the indigenous people one major source of sustainable livelihoods! Instead of finding ways to regulate and formalise the sector, get many more to obtain licences, and use the sector as a poverty alleviation tool in mining communities, it is rather criminalised.

I will present here in my next series why extractive industries like that of the bigger mines in Ghana are rather poverty breeding enclaves in mining communities; why bigger mines even though contribute among the highest to the country's total revenue, cannot and had not been able to solve problems of unemployment in mining communities; and why artisanal small scale mines are rather the sustainable options for Ghana's mineral mining future.

Albert Kobina Mensah

Senior Reseearch Fellow

Source: ILAPI