Accra: Professor Aaron Mike Oquaye, former Speaker of parliament, has stated that Ghana must end its reliance on royalties as the primary benefit from its natural resources. Speaking at a high-level seminar organised by the Institute of Economic Affairs (IEA), he called for an overhaul of resource governance, advocating a shift to an ownership-based model.
According to Ghana News Agency, the seminar, held on the theme 'The Dilemma of the 17th IMF Programme and Our Natural Resources - A Pathway to National Development,' featured speakers from academia, the clergy, and the natural resources governance sector. Prof. Oquaye criticised the current royalty-based system in the mining sector, describing Ghana's ownership status as 'shameful.' He noted the historical reduction of government shareholding in major mining ventures, stating that the country holds virtually no equity interest in key multinational companies.
Prof. Oquaye described the royalty system-a percentage fee on gross production-as a colonial relic that treats Ghana as a subject rather than a partner. "Royalties is like diplomacy. It doesn't show respect as the co-owner or a serious partner in the venture at all," he said, noting that the system allowed foreign entities to operate with a sense of ownership while offering the state minimal returns.
Prof. Oquaye proposed the adoption of Service Contracts and Profit-Return Agreements, under which the state or a state-owned company retained full ownership of the resource and contracts specific services such as exploration and production. He said this model, successfully used by countries like Norway in the oil sector, ensured that the nation retained most of the financial benefits. Prof. Oquaye further called for the urgent establishment of a Ghana Minerals Corporation to operationalise the ownership-based approach.
Ghana's resource extraction sectors have operated under a royalty system, where the state receives a percentage of gross production from foreign multinational companies that undertake mining or drilling activities.