Ghana’s Main Opposition Will Stop Gold Fund If It Wins Vote

(Bloomberg) -- Ghana’s former President John Dramani Mahama has vowed to reverse the establishment of a gold royalty fund if he wins back power in the country’s December vote.

A plan to raise $500 million next month through an initial public offering of the fund “is a very shady deal and I’m saying, if I become president, I will not respect that agreement,” Mahama, the presidential candidate for the National Democratic Congress, said in a broadcast on his Facebook page. “It is a theft of Ghanaians’ royalties made to benefit just a few people.”

Mahama’s statement means he will take all legal steps to have the deal canceled, James Agyenim-Boateng, his campaign spokesman, said by phone.

“There is truly nothing to hide but rather a desire to make the best of our natural resources,” Finance Minister Ken Ofori-Atta told journalists Thursday in Accra, the capital. “The opposition have been aware and participated in the parliamentary process since 2018,” he said.

Africa’s biggest gold producer wants to use the IPO to take advantage of soaring prices for the metal. The fund will be structured to pay dividends on the government’s income from gold operations and be listed in London and on the local bourse.

Read more: Ghana Advances Gold Fund IPO Plan to Cash In on Soaring Prices

“The government says it wants to get this done and the opposition says they will not respect the transaction,” Anthony Degbato, head of asset management at SAS Finance Group, said by phone from Accra. “People will be looking for commensurable return for the political risk, which can affect demand for the IPO.”

The fact that the special-purpose vehicle created to manage the fund is registered in Jersey, a tax haven, is an attempt to hide the identity of the investors, Mahama said. “We will not accept that agreement, we will not accept that government of Ghana should invest our royalties in an offshore tax haven,” he said.

Mahama lost power to President Nana Akufo-Addo of the New Patriotic Party in the 2016 election and the two men will face off in a third consecutive poll this year. The two parties have dominated Ghanaian politics for decades.

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