Founder and Leader of the Movement for Change (M4C), Alan Kyerematen, has asserted that Vice President and NPP Flagbearer, Dr. Mahamudu Bawumia’s proposal for 100% ownership of natural resources by Ghanaians is impractical and misleading.
Dr. Bawumia recently unveiled campaign plans to enact a policy granting Ghanaians complete ownership of natural resources, aiming to reduce foreign companies’ substantial ownership.
The NPP flagbearer argued that this move is essential to halt the trend of foreign mining companies repatriating all their profits, leaving minimal benefits for Ghanaians.
However, Alan Kyerematen, poised to contest the 2024 elections as an independent candidate, criticized the plans as populist propaganda. He shared his perspective on natural resource management during an interview with The Chronicle newspaper.
Read the full transcript of the interview below:
Ques. 1: Is 100% Ghanaian ownership of our natural resources feasible?
Ans.: Thank you for the opportunity to speak to the all-important matter of the management of our natural resource. Article 257 (6) of the 1992 Constitution, vests all mineral resources in its natural state anywhere within Ghana and its territorial waters, in the President in trust for the people of Ghana. Mineral resources, for the avoidance of doubt, include solid minerals (such as metals, industrial minerals etc) and liquid minerals (such as oil and gas). There are separate and individual laws regulating access to and management of these different minerals. So, Ghanaians already own 100% of their mineral resources by law. The impression being created by the Vice President that he will make Ghanaians own 100% of their natural resources is misleading and amounts to populist propaganda.
The real question is how to exploit the available resources for maximum benefits to Ghanaians.
Ques. 2: So, you are saying the point is not about 100% Ghanaian ownership but rather exploitation?
Ans.: Yes, because ownership of natural resources does not automatically confer any direct benefits. To benefit from any natural resource, it must be explored, extracted, processed, and sold. If that was not the case, Ghana from pre-colonial times when it was named the Gold Coast, would have by now been one of the wealthiest countries in the world.
Ques. 3: The Vice President says Universities and the Geological Services Department will be empowered to explore and exploit these resources. Can that be done or not?
Ans.: Exploration and processing of natural resources is highly capital intensive and also requires high level technical skills. The Universities and Geological Services Department clearly have a role to play in the exploration and processing of natural resources, but certainly do not have the capital base and all the critical technical skills, technology and equipment required to explore, develop, and process our natural resources, in the short to medium term.
The claim made by the Vice President is another clear example of political propaganda and rhetoric aimed at deceiving Ghanaians for political gains.
Ques. 4: But if it is about exploitation, which as you have explained requires capital and technological know-how, how can Ghana control the exploitation of her natural resources?
Ans.: The example of most of the countries around the world with vast natural resources, point clearly to the critical importance of attracting Foreign Direct Investment (FDI) for the exploration and processing of their natural resources. Even for those countries who now have dominant control over their natural resources, the historical trend has been to progressively attract FDI in exploiting their resources, until such time when they accumulate enough wealth domestically, to take controlling interest in the exploitation of their natural resources.
Regrettably in Ghana, we are faced with a myriad of problems that in the short to medium term, limit our capacity to control our natural resources. There are traditionally four windows that are open to countries to mobilize capital for the exploitation of natural resources, namely:
First, is the mobilization of domestic revenue as well as domestic savings to finance capital expenditure. In the case of Ghana, this window is currently closed to us. We have an abysmally low revenue base, with one of the lowest Tax to GDP ratio in Africa.
Second, is raising debt to finance capital expenditure. As we are all aware, Ghana currently has one of the highest debt levels on the continent, which is unsustainable, and has thus pushed Ghana to seek an IMF bailout. As a consequence of this, Ghana will be unable in the short to medium term, take advantage of the international capital market for our borrowing requirements.
In addition, our domestic debt market is seriously constrained due to distortions arising from Government’s policy actions and inactions. This means that the second window for raising debt finance to exploit our natural resources is also closed to us as a country, at least in the short to medium term.
The third, window is to use financing from international development institutions, eg. World Bank, and IMF. This has traditionally not been considered as a source of finance for capital projects such as the exploitation of natural resources. In any case, there has been over the years, a declining appetite for development finance support for Ghana from international finance institutions. This means Ghana cannot rely on this third window to exploit her natural resources.
The fourth window is attracting foreign and domestic private investment capital. In my considered opinion, this is the most viable option available to Ghana in the short to medium term, if it is to mobilize significant levels of financial resources, and technological innovation that will enable Ghana extensively explore and exploit her natural resources.
It is against this background, that the propaganda promise by the Vice President to make Ghanaians have 100% ownership of its natural resources, is not only misleading and unfortunate, but also counter productive to attracting private investment capital into the exploitation of our natural resources. If Ghanaians are going to own 100% of our natural resources, then where is the room to attract investments from other partners? Because by logical implication, any investor will be looking for a shareholding interest in the exploitation of Ghana’s natural resources.
Ques. 5 What would an Alan Kyerematen Presidency do differently in managing the natural resources of Ghana?
Ans.: The more pragmatic and practical approach is what the Movement for Change has proposed, which is to have Ghanaians either through Government or through public stock holding, have a controlling interest of not less than 60% in the exploitation of its natural resources, through Joint Ventures or other forms of commercial engagements, with participatory interest by government, individual Ghanaians, and foreign private partners.
Secondly, the Movement for Change has proposed that by the year 2030, at least 60% of all our natural resources that will be exported will have value addition either in whole or in part. This will maximize the benefits to Ghana from its natural resources. The promise made by the Vice President will send negative signals to the international investor community, at a time when there is a gradual and systematic exit of foreign private commercial interests from the country. The policy propaganda by the Vice President may even unfortunately, be interpreted as a desire to nationalize foreign commercial interests in Ghana, knowing very well that previous and current governments have signed subsisting agreements with Foreign Direct Investors, many of which extend years into the future, for the exploitation of Ghana’s natural resources.
It is the view of the Movement for Change, that where feasible and legally permissible, such existing contracts and agreements would be reviewed by mutual consent, to help Ghana in this critical period of economic crisis to harness more benefits from its natural resources.
Under the Industrial Development pillar of the Great Transformational Plan, which I have proposed as the new blueprint for Ghana’s economic development, there are new strategic sectors which have been identified as the new growth poles for the Ghanaian economy. Access to FDI in developing these strategic anchor industries will be critical.
I have also made a number of far-reaching policy proposals to stabilize our macroeconomy, which are all important ingredients for attracting foreign and domestic private investment capital. These include, stabilizing the local currency, bringing inflation down to single digit, significantly reducing interest rates, optimizing revenue mobilization including but not limited to tax reforms, bringing Ghana’s debt to sustainable levels, building our international foreign reserves, maintaining fiscal discipline, and enhancing economic growth, all of which will lead to a significant drop in current unemployment levels.
Under an Alan Kyerematen Presidency, “Ghana will Rise Again”.