Investment for mining communities …as Cabinet considers Minerals Fund

Cabinet is considering a draft bill for the establishment of the Minerals Development Fund (MDF), the Minister of Finance and Economic Planning, Dr. Kwabena Duffour, has said. The MDF, when approved by Cabinet and subsequently passed by Parliament, will contribute to effective management of part of the revenues generated by the mining sector and received by mining communities. In addition, it will provide resources to the host communities under the Mining Community Development Scheme, which will be invested to improve livelihoods and reduce the negative impacts of mining on such communities. According to him, in 2010 the mining sector contributed 7% of Ghana’s total corporate tax earnings, 49% of total export revenues, 23% of government revenues and 6% of GDP. “Total foreign direct investment (FDI) into the minerals and mining sector from 1984 to 2011 amounted to US$11.2bn. Currently we are an oil-producing economy, which we hope in addition to the mining sector will provide the much-needed finance for economic transformation.” Dr. Duffour added that large-scale mining and mine support services employ about 27,000 people. An estimated 500,000 people are engaged in the small-scale gold, diamonds, quarry and salt industries among others. He said this at the Ghana Extractive Industries Transparency Initiative (GHEITI) regional conference in Accra under the theme “Natural Resource Governance, Setting Standards with EITI”. The purpose of the Extractive Industries Transparency Initiative is to ensure increased transparency in payments by companies in oil and gas and mining industries to governments, as well as transparency in revenues of host-country governments. Naa Prof. John Nabila, President of the National House of Chiefs, said the need for accountability in all aspects of the industry is very imperative; the national house of chiefs and many citizens have been worried about lack of clear guidelines on the operations of Article 267 sub-clause (6), which is on the distribution of revenue accruing from stool lands. He said in as much as the chiefs would want to have a clear explanation or fair accountability of the proportion of 55% which goes to district assemblies within the areas of the stool land, the people are also clamouring for some level of accountability in what goes to the traditional authorities. Dr. Duffour assured that the government is working assiduously to ensure that the enhanced revenues are prudently managed and utilised for the benefit of the people, especially those negatively affected by the activities of extractive sector companies. “We have for instance developed guidelines for the utilisation of mineral royalties at the sub-national level. This is to avert the potential misuse of the districts’ share of royalties, and to ensure that projects financed by royalty transfer from central government to mining districts are those that are consistent with the development priorities established by the people in these communities. “We have also developed guidelines for the implementation of corporate social responsibility programmes, and the purpose is to align these programmes with the development aspirations of beneficiary communities -- thereby making them meaningful within the local development context,” he added. EITI was announced by Tony Blair, the former Prime Minister of United Kingdom, at the world summit on sustainable development in Johannesburg, South Africa, in September 2002. It was necessitated by the lack of transparency surrounding international companies’ dealings with governments of resource-rich countries, for which reason those countries have not been able to maximise benefits from their natural resource endowment to reduce poverty. SOURCE:B&FT