Ghana’s president Nana Akufo-Addo is calling on African governments to end fiscal incentives for foreign mining investors, for the purposes of making mining deals more beneficial for Africa.
Speaking at the 2019 Mining Indaba held in Cape Town, South Africa, Akufo-Addo, leader of Africa’s second-largest gold producer, said that the continent’s reputation of political instability is outdated. He further added that improvements in the rule of law should be reflected in countries’ relationships with mining companies.
As such, the president reiterated that African governments should not have to give unusual tax and royalties’ incentives. Similarly, mining companies should not expect to make extraordinary profits from the continent.
This comes just as a number of African governments have reviewed mining contracts with a view to reconsider partnership terms and increase their share of mining revenues.
Last year, Democratic Republic of Congo (DRC) rewrote its mining code, ignoring the objections of miners. It also cancelled existing stability clauses in contracts and raised royalty rates across the board.
Meanhwile, Tanzania, once one of Africa’s most attractive jurisdictions for international investors, has also cracked down on the industry, hitting gold miner Acacia with a US $190Bn tax bill. The company has since disputed the claim and its parent company Barrick Gold is in talks with the government.
Akufo-Addo said that inasmuch as Africa may be in need of mining investment, foreign companies should also understand their role in developing economies. He also called on his fellow African states to establish value-added industries on the back of their mineral wealth.