Make the lithium deal better

By Sheela Adoma Sakyi OPPONG 

Luckily we have lithium in Ghana. The importance of lithium in an era of energy transition and the clean energy revolution is hugely significant. Lithium is used in manufacturing rechargeable batteries, electronic vehicles and even in drug manufacturing, among others. What does this mean for ordinary Ghanaians?

It should spark hope in our hearts and bring significant transformation to the lives of all of us. But we know all too well that the history of natural resources, its governance and economic benefits have not always been transformative for the vast majority of Ghanaians.

The current lithium find has seen some controversy over the ensuing commercialisation contract.   The controversy stems from the contract negotiation. The state under the previous NPP administration negotiated for royalties of 10%. The amended Minerals and Mining Act 2015(Act 900), made room for this.

The current NDC government in opposition at the time, issued a press release calling this rate “mediocre”. Now in government they sought to renegotiate and have subsequently moved the negotiated amount of 10% to 5%. The government has been explaining via the media to us that this is in accordance with the law and that the previously negotiated amount under the NPP government was not exactly proper.

The argument is that, upon amending the Act, regulations ought to be passed in order for royalties other than the 5% previously prescribed under the old Act, to be enforced. Now it is important to note that Act 900 in section 6 (2) states that royalties in place immediately before the amendment were made shall continue until altered. This rate was 5% per  Act 794 0f 2010.  One would think that the new negotiation, would have started off by putting in place the regulation necessary to charge royalties over and above the initial 10%.

The current lithium deposit discovered in Ghana, which has become the subject of controversy is located in the Central Region of Ghana. The Central Region is a poorer region of the country. Teeming young people remain unemployed. These young people, have pent up energies that could end up in unguarded vices. Those energies need to be harnessed in meaningful employment that pays adequate wages which would enable young families thrive under improved livelihood conditions.

The new 5% agreement has been subsequently withdrawn from parliament for further consultation. This is because the opposition vehemently argued against the reduced royalty rate.

Any further decision on how much royalty and other important conditions in this contract, should be made based on our need to make our resources pay our bills, educate our children, provide our young people with jobs and protect our vulnerable. In effect, whatever legal or statutory tools put in place, must be underpinned by these basic needs. Retrogression that costs money should not be our first option in any dealings on our natural resources.

In the end the people who need this deal to happen the most, should not only have to rely on the good conscience of those who they have elected to represent their interests. There also ought to be ample legal and institutional mechanisms to safeguard our collective interests. Natural resources are God’s gift to us, to share with the rest of the world for gain. With that gain, we must undertake transformative policies and initiatives to change our social and economic predicament for the better.

History has many lessons for us. There is such a phenomenon called the resource curse., where countries with abundant natural resources tend to have lower economic development and exacerbated corruption. We are lucky to have natural resources, not only lithium, gold, timber, fertile soil but also a largely youthful population that could be the basis of increased production and consumption, spurring on our economy.

We cannot recycle problems of old and seek old solutions that did not work. We keep going round this Ferris wheel, of not making the most of our natural resources, due to well-known time-tested inadequacies and inefficiencies. We know too well how it ends with all of us losing out. Yet we go round it anyway.

We have travelled this road many times. Let us do better, because we simply can’t afford to do less. We do not have the luxury of letting one more bad deal slip through. The post covid world is one where traditional donors have grown weary and new rising powers have agendas that may not be as veiled by guilt or colonial connections. Our chance and hope are to work as assiduously as we can with what we have in our hands- which is the gift of massive natural resources, that should leave all of us much better off than we are.

The writer is a Lawyer and Development Professional

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