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Peter Amewu
Peter Amewu

Government deepens woes of mining communities …as it denies them Mineral Development Funds

Experts in the mining sector are bemoaning the administrative bureaucracies in the distribution of the Mineral Development Fund (MDF), raising concerns that the mode of disbursement would impoverish mining communities rather than develop them.

According to stakeholders, monies that are supposed to go to the mining communities for development as stipulated in the Minerals Development Fund Act 912 (2016) have since not been transferred.

This, they say, will continue to deepen the woes of host communities and deprive them of development as specified in the MDF Act.

Mr. Emmanuel Kuyole, Executive Director of the Centre for Extractives and Development Africa (CEDA), laments that government continue to starve mining communities by violating section 3a of Act 912.

Mr Kuyole said, “We consistently violate the law. The 20 percent Community Development Scheme that is supposed to be sent to mining communities has not been sent. There are arears since 2013 consistently where no disbursement has been made.”

He warned that with such attitude toward mining communities, the underdevelopment would continue to manifest.

Recently, President Nana Addo Dankwa Akufo-Addo urged the mining companies to invest part of their wealth in infrastructure development and provision of social services that would positively impact the lives of people in areas where they are operating.

The local communities should benefit from the mineral resource through improvement of their economic, social and environmental conditions and he asked that this was seen by the companies as a matter of obligation.

The President said it was ironic that after decades of mining in places like Obuasi, Tarkwa and Prestea, they remained largely underdeveloped.

However, industry players   have parried away the president’s remarks arguing that the mining companies have been honouring their taxes and making other statutory payment, thus, the responsibility is on government to propel development in these communities.
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Parliament passed into law the Mineral Development Fund (MDF) to provide the legal basis for the disbursement and management of royalties received by government. The MDF is to address the development challenges affecting communities by setting aside proportion of royalties for development projects. The law, Minerals Development Fund Act (2016) Act 912, It introduces the mining community development scheme to directly sponsor socio-economic development in communities in which mining operations takes place or which are affected by mining activities.

The fund is to provide financial resource for the direct benefit of mining communities, holders of interest in land as well as traditional and local government authorities within mining areas.

Sources of monies for the fund as stipulated in the law includes, twenty per cent of mineral royalties received by the Ghana Revenue Authority (GRA) on behalf of the republic from mining leases in respect of the mining operations of the holders, monies approved by Parliament, grants, donations, gifts and monies from investment made by the Board of the fun comd.

He made these remarks recently at a workshop put together by the Institute for Financial and Economic Journalists (IFEJ) in partnership with the German Development Cooperation (GIZ).

He continued, “In 2017 and 2018, what is happening is even worse because the Ministry of   finance has decided to apply the capping law to the Mineral Development Fund   and capped it to 12.5 percent instead of 20 percent and even with the 12.5 percent they are not disbursing everything.

“So far only about 3.2 percent have been disbursed. So, when we do this there is no way we are going to see development in the mining communities. Because the resources that are meant for development in the mining communities are not being sent.”

For his part, Mr Abdallah Ali-Nakyea, a Tax Consultant with Ali-Nakyea and Associates, said there is the need to rework the Mineral Development Fund Act.

He told   the workshop that “Act 912 must be worked on; as it does not favour mining communities”

Mr Nakyea encouraged stakeholders in the mining sector to be keen on addressing the revenue leakages through understanding and asking the questions that would make revenue managers responsible.

He said every activity associated with mining needed to operate under law and therefore the need to continuously push for the good policies.

 

 

By Mohammed Suleman

 

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