Akilagpa Sawyerr reveals quandary ...in renegotiation of mining agreements

Professor Akilagpa Sawyerr, chairman of Government’s renegotiation committee on mining agreements, has proposed a paradigm-shift in the country’s political economy to correct the situation whereby Government’s ability to negotiate with companies is weakened by its reliance on them for certain favours. 

“If you are looking around for budget support or begging the companies to give you money to close your budget gap, you can’t demand anything from them,” he said.

Government’s inability to raise enough resources through taxes to meet developmental challenges means it often relies on companies to complement its efforts, which “limits the space” for negotiations, he said. 

Prof. Sawyerr made this submission to B&FT at a public forum organised by Third World Network, Africa (TWN-Africa) on how to “enhance public knowledge and engagement in support of mining reforms and contract re-negotiations.”

The forum discussed recent initiatives by government in the mining sector, giving particular attention to attempts to renegotiate mining agreements.

Prof. Sawyerr’s team of negotiators was inaugurated in January 2012 to renegotiate existing mining contracts widely seen to have failed in producing expected benefits to local stakeholders -- government and communities -- in the industry.

“The negotiation team has gone very far with its work. The negotiations that we are doing now are to help us create policy-space for the reform,” he said. 

He revealed that a sub-committee has been carved out of their team to look into illegal small-scale mining operations and other issues, including identifying institutions that have failed to ensure Ghanaians benefit from the sector.

Dr. Yao Graham, Coordinator of TWN-Africa, said Government’s negotiating team must ensure that mining companies pay the appropriate taxes -- and should also consider changing the operative mining regime in a manner that will ensure structural transformation and sustainable socio-economic development.

“In the past few years, Government has introduced some policy initiatives with the aim of addressing various challenges in the mining sector. However, the lack of sufficient public discussions and engagement poses a threat to attainment of the expected results.”

He said all the efforts by government are consistent with those of regional and continental bodies such as the Economic Community of West African States (ECOWAS), the African Union (AU) and the United Nations Economic Commission for Africa (UNECA) -- which have all amplified the same concerns in the “The African Mining Vision” policy document.

He observed that the old regime prioritises foreign investments; hence the need for mining policy options and spaces to be defended from further erosion. 

The new regime, he said, should renegotiate the royalties to be paid by mining companies and give the maximum number of years a mining concession can be leased out to a particular company.

General Secretary of the Ghana Mineworkers Union Prince Ankrah said conviction among political leaders to lead change processes so as to make mining more beneficial for communities is key.

He criticised corporate social initiative programmes in grasscutter-rearing and snail-farming as not sustainable enough, and wondered why mining communities do not benefit from industrial set-ups that provide goods and services for the sector.

Tetteh Hormeku, an official from TWN-Africa and a member of the Economic Justice Network, said there is need for the country to be keenly aware of all its bilateral and multilateral commitments as it pursues the negotiations -- in order not to shoot itself in the foot.