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General News of Friday, 20 May 2022


E-Levy has replaced Agyapa, abort the idea – Lord Mensah advises government

Prof. Lord Mensah, Associate Professor of the University of Ghana Business School Prof. Lord Mensah, Associate Professor of the University of Ghana Business School

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Professor Lord Mensah, a lecturer at the University of Ghana Business School, UGBS, has advised the government to abort the intention of collateralising Ghana's mineral resources through the Agyapa deal.

According to him, the controversial Electronic Transfer Levy, E-Levy, passed by the government is now serving the purpose that the Agyapa deal would have served.

He indicated that, as of the time the Agyapa deal was being introduced, Ghana was not able to have access to the Eurobond market to raise revenue for development, therefore, a desperate Ghana then needed to look for ways to raise funds internally to embark on the development projects hence, the introduction of the E-Levy.

Speaking on Accra-based TV3, on Wednesday, May 18, Prof Mensah explained, “I don’t and I wasn’t expecting Agyapa to come back again. E-levy has come, E-levy is more or less, for me, a replacement of Agyapa.”

He added, “You have your human resources that you are taxing their activities, the transactions that they make and then you have the natural resources deposited as gold. At the time that we were looking at the Agyapa deal, more or less, the country was desperately looking for money. The signals were clear that the Eurobond market, where we raised the billions of dollars to offset the existing debts and get some proceeds for development of this country, we were getting to a point where the investor communities have started shying away from us.

“So at that point, let us look for alternative of raising money. So, in the form of engineering, let us see how we can collateralize some of our natural resources and get upfront funds and then in the end, we use it for the purpose that the Eurobond could have given us.

“Now, we find it difficult going to the Eurobond market and one of the justifications of the E-Levy was to get a replacement for the funds that we get from the Eurobond market, so effectively, the timing for me is wrong.”
He further asked the Finance Minister Ken Ofori Atta to state clearly how the Agyapa deal will benefit Ghana because the benefits to accrue from the transaction have not been clearly stated and explained by the government.

Prof Lord Mensah continued: “Looking at the posture and packaging of Agyapa, it gives a signal as if the gold that we have is, more or less, for a corporate entity.

“So we are engineering to get upfront funds and then, once we get the upfront fund, if you want to do analysis, the Finance Minister should be able to tell us that when we get the upfront fund from the Agyapa deal, this is what we are going to use the money for and these are the possible benefits that the country will generate from from it as compared to, if you are to wait and use the proceeds that come from your gold resources.

“So effectively these comparisons are not clear. That aspect of the economic justification is not coming out. It is more emotional and ego-driven than looking at it holistically.”

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