Vice President Dr Mahamudu Bawumia
Vice President Dr Mahamudu Bawumia says the carried interest in the mining sector is virtually useless because Ghana is earning zero percent.
Delivering the keynote address at the launch of the ‘Spring 2018 Regional Economic Outlook’ of Sub Saharan Africa by the International Monetary Fund (IMF) under the theme, ‘Domestic Revenue Mobilisation and Private Investment’ in Accra yesterday, he noted that “if you look at the existing natural resource regime, Ghana, like many countries in the mining sector for example, has a carried interest of about 10 percent.”
Dr Bawumia said “we see a matrix of zeros as far as the dividends that Ghana earn from this carried interest from 2012; it’s largely populated by matrix of zeros.”
He said, “To a large extent, the carried interest in mining is virtually useless because we are earning zero.”
“It’s very difficult to reconcile how you can be mining for all these years and not be making profit; it doesn’t make sense.”
Dr Bawumia therefore expressed government’s intention to take a second look at the issue and proffer prudent solution to it since the trend cannot continue.
In that regard, the Vice President said that “the old paradigm of natural resource exploitation and export of unprocessed agricultural products and raw minerals are no longer sufficient in order to grow our economies to create jobs and meet social expectations in the provision of basic amenities.”
For this reason, he said “we need to relook at this whole regime because zero companies are not making profit to pay dividends but they keep mining.”
“We are compelled to reexamine our natural resource control and governance strategy, our resource fiscal regime from exemptions to carried interest and how to use our natural resources to better build a prosperous economy,” he said.
He expressed concern about the factors affecting growth and development in the sub-region.
With the exception of Nigeria which has a vast market, the Vice President insisted that “the region remains relatively unattractive to private investment flows badly needed to accelerate growth.”
Going forward, he stressed the need for greater regional cooperation in developing a regional market.
“There is much to be gained in increasing regional inputs to support manufacturing, especially in agro processing.
“We need greater cooperation in the management of natural resources; regional approach to local content and value addition policy in mineral resources will be most beneficial to the region,” he emphasized.
By Charles Takyi-Boadu, Presidential Correspondent