Ghana Parliament urged to enforce mineral royalty disbursements

• Ghana's Extractive Sector Multi-Stakeholder Group has urged Parliament to summon State agencies over delays in disbursing mineral royalties.
• The delays are stalling development projects, disrupting local planning, and undermining the objectives of the Minerals Development Fund Act.
• Parliament should ensure compliance with the Minerals Development Fund Act by holding State institutions accountable for timely release of approved funds.

A lot of development projects in some of these beneficiary communities have come to a standstill, and the uncertainty over the timing of disbursements makes it difficult for communities to plan development activities with any confidence.

A recent report by the Ghana Extractive Sector Multi-Stakeholder Group (MSG) has highlighted the need for Parliament to take action against delays in disbursing mineral royalties to mining host communities. The delays, which have been ongoing for some time, are having a significant impact on development projects in these areas. According to Dr Emmanuel Steve Asare Manteaw, Co-Chair of the Ghana Extractive Industries Transparency Initiative (GHEITI), the uncertainty over when disbursements will be made is making it difficult for communities to plan development activities with confidence.

The Minerals Development Fund Act, 2016 (Act 912), mandates that certain percentages of mineral royalties be disbursed to mining host communities. However, despite this law, delays in payments continue to plague the sector. In fact, a lot of development projects have come to a standstill due to these delays.

The situation is not only affecting the communities but also undermining the objectives of the Minerals Development Fund Act. The Act was established to ensure that mining communities benefit directly from mineral resources. However, the delays in disbursements are making it difficult for this objective to be achieved.

The Ghana Extractive Industries Transparency Initiative (GHEITI) Report 2023 has identified weak oversight and institutional coordination as major contributors to the delays in disbursements. The report highlights that Parliament should ensure compliance with the Minerals Development Fund Act by holding State institutions accountable for the timely release of approved funds. This is essential to strengthen transparency and accountability in the sector.

The GHEITI advocacy has contributed to reforms in the mineral royalty regime, including changes to enable mining communities to benefit more directly from mineral resources. However, despite these reforms, revenue leakages and weak inter-institutional coordination continue to constrain the sector's contribution to national and local development.

To address this issue, stronger institutional collaboration and improved data management are needed to enhance transparency and ensure that resource revenues translate into tangible benefits for mining communities.

The Government has reaffirmed its commitment to using evidence generated through GHEITI to inform policy reforms and strengthen accountability in the extractive sector. This is a positive step towards addressing the delays in disbursements and ensuring that mining communities benefit from mineral resources.

Under the Minerals Development Fund Act, mineral royalties are distributed through a statutory formula. However, despite this framework, delays in payments continue to occur. It is essential for Parliament to take action against these delays and ensure compliance with the law.

The GHEITI Report has highlighted the need for stronger institutional collaboration and improved data management to enhance transparency and accountability in the sector. This will enable mining communities to benefit more directly from mineral resources and contribute to national and local development.

Lawyers advising mining companies in Ghana should watch for potential compliance exposures related to delayed mineral royalty disbursements, which may impact development projects and community planning.

Source: Original reporting via GNA