Analyst calls for increased scrutiny of deals in extractive sector

Thomas Scurfield, Africa Senior economic analyst with the Natural Resource Governance Institute, (NRGI) has advised government to  interrogate the contracting and licencing processes and management of revenues from the critical minerals industry.

According to Scurfield , Ghana’s  mineral deals required scrutiny to ensure the nation secures maximum benefit from its mineral wealth.

He observed that across the world, there was pressure to get minerals out of the ground, fuelled by high prices of critical minerals, which conditions “are perfect for corruption and mistakes to be made by governments as they try to make the most of the opportunity a global race for suppliers is bringing.”

The analyst noted that in election years, those conditions become more challenging when there is a change in government and incumbents also show that they are delivering for the people and also want to make sure they are benefitting from the exploitation of the resource.     

“Even though there is global pressure to quickly sign contracts, quickly get minerals out of the ground, governments need to take their time to make sure that they got a good deal for their people,” he stated at a training programme organised by NRGI to help diagnose corruption in the critical minerals industry.

Commenting on the announced approval for the listing of Atlantic Lithium Limited on Ghana’s Stock Exchange, Scurfield described the move as hasty and pre-emptive since the deal was yet to be ratified by Parliament.

Come May 13, 2024, Ghana’s first lithium mine, is set to list its ordinary shares on the main market of the Ghana Stock Exchange, having received approval from the GSE’s  Listing Committee and the Securities and Exchange Commission (SEC).

Thomas Scurfied told The New Finder the development was a red flag which could undermine Parliament’s work on the deal.

“To be honest I would subscribe to the listing waiting till the deal has been ratified because Parliament should be having the final say and there is the potential that parliament will reject the deal  which then will mean the mine won’t go on,” he stated.

He described as surprising the move to list before the deal is finalised, saying, “it does question the role Parliament is expected to have, whether it has the ability to scrutinise the deal or the deal is expected to be rushed through without changes.”

The analyst argued that the Atlantic Lithium deal required scrutiny to ensure the Ghana secures maximum benefit from its mineral wealth.

He maintained that the high value placed on critical minerals worldwide was exerting a lot of pressure on governments, a phenomenon which could give room for mistakes and corruption in the award of contracts and management of revenues.

Africa Director at NRGI, Nafi Chinery stressed the need for anti-corruption actors in Ghana, the media and other civil society organisations to be alert to the risks posed by new mining developments.

She noted that it was crucial for governments, companies, and civil society to work together to prevent and combat corruption in the mining sector and promote transparency, accountability, and sustainable development.

The training programme covered various topics, including the types of corruption in the industry, the causes and consequences of corruption, and the best practices for diagnosing and preventing corruption.