Strategically situated between the Atlantic Ocean and the Gulf of Guinea, Ghana is one of the European Union’s most important partners in Africa. Unfortunately, despite its valuable position as a springboard for EU initiatives in West Africa, Ghana continues to be held back by the growing corruption of its incumbent president, Nana Akufo-Addo, and his political party, the New Patriotic Party (NPP).
Recently, the Ghanaian government has garnered renewed criticism following an agreement between the Akufo-Addo administration and Agyapa Mineral Royalty Limited, a Jersey-based private company with stated exposure to resource exploration, commodities trading, and gold mine financing.
From what can be gleaned from its opaque terms, the contentious agreement gives the Akufo-Addo administration a temporary 100% ownership stake in Agyapa, which will be lowered to 51% once the company is publicly traded. In return, Agyapa’s investors would inject between $500 million and $1 billion into Ghana’s Minerals Incomes Investment Fund (MIIF). Established in 2018, the MIIF is supposed to collect and grow mining company royalties in order to finance long-term developmental projects. However, questions have been raised about the lack of transparency over MIIF financing and the fund’s reliance on subsidiary Special Purpose Vehicles for holding and transacting its investments.
In return for Agyapa’s up-front injection of capital into the MIIF, the Akufo-Addo administration has agreed to mortgage in perpetuity approximately three-quarters of Ghana’s gold assets to Agyapa. While royalty-based prefinancing agreements are not uncommon, this particular arrangement stands out due to the fact that it commits the bulk of Ghana’s future mineral revenues to unknown business interests in Jersey, a known tax haven.
Secretive corporate structures aside, Akufo-Addo’s personal connections to the Agyapa deal is also raising eyebrows. Specifically, Ken Ofori-Atta, the Ghanaian Finance Minister and chief intermediary for the Agyapa agreement is Akufo-Addo’s cousin. Another of Akufo-Addo’s cousins, Gabby Asare Otchere Darko, has been paid a handsome taxpayer-funded retainer to provide legal advice throughout the Agyapa proceedings.
Typically, any agreement that deals with the mortgaging of national mineral royalties, let alone one that also outlines governmental consolidation of an externally incorporated company, would undergo several months of due diligence prior to any talk of parliamentary approval. Ideally, the Ghanaian Parliament would have at least a year to comprehensively comb through requisite documents and agreement terms, review Agyapa’s incorporation details and perform a long-term fiscal impact assessment.
However, leveraging the NPP’s parliamentary majority, Akufo-Addo offered the Ghanaian Parliament less than 4 hours to review and subsequently approve the entire Agyapa agreement. In response to the apparent improper dealings, the bulk of the parliamentary minority, the National Democratic Congress (NDC), declared the rushed approval process a sham and staged a walkout from the parliamentary chamber.
In a formal statement, the NDC unequivocally condemned Akufo-Addo and the NPP for their borderline unconstitutional decision to sign away future mineral revenues, calling the agreement “grossly inimical to the interest of the people of Ghana and…contrary to the constitutional imperative that governmental power is exercised for the welfare of the people of Ghana.”
Adding their voices to the rising chorus of reproach, individual NDC politicians like John Dumelo have publicly denounced the secretive Agyapa agreement. “It is shrouded in so much secrecy and doesn’t serve the best interest of Ghana,” tweeted Mr. Dumelo. “The $1 billion valuation amounts to an undervaluation of Ghana’s resources by over 65%.”
Ghana’s civil society organizations have led a vocal and prolonged public campaign against the deal, demanding that the government provide more data and transparency and “suspend implementation of this transaction pending a national dialogue”. More than 20 Ghanaian NGOs have together formed an ad-hoc alliance on the issue, claiming that the government is “gambling” with public money.
Outside of Ghana, the Agyapa agreement has also been the subject of intensifying criticism from international observers and anti-corruption watchdogs in the EU. Ghana is not only a major European trading partner, but it’s also a pivotal hub for regional development initiatives and a key security partner for counter-terrorism operations in West and Sub-Saharan Africa. As such, EU policymakers are understandably concerned by the recent uptick of public-private corruption and political nepotism in Ghana.
Thanks to its strategic and economic value to the EU, Ghana is home to several EU anti-corruption initiatives, with the flagship Ghana Anti-Corruption, Rule of Law and Accountability Program (Ghana-ARAP) being launched in 2016. However, if the Agyapa agreement is anything to go on, initiatives like the Ghana-ARAP Program are not always adequate when it comes to curtailing cronyism and corruption, now hallmarks of the Akufo-Addo government.
In the past decade, the EU had deployed several Election Observation Missions to Ghana, and found that it had a “track record for well-run, inclusive and peaceful elections.” However, over the last year, as Akufo-Addo has campaigned for the upcoming December elections, the formerly robust Ghanaian democratic system has been consistently and repeatedly chipped away. As Ghana inches closer to election day, the EU must take a more pro-active approach in Ghana.
In addition to being pure nepotism and state capture, the Agyapa agreement is clear evidence that Akufo-Addo is enriching himself and his associates at the expense of the Ghanaian people. If the EU continues to stand on the sidelines, it may take years to rebuild Ghana’s democratic institutions and restore its hard-earned reputation for good governance.