Is it possible for African countries to break away from the resource curse? Will there ever be a time where the resources which African countries have been blessed with, will be beneficial to the African people? Will the exploitation of African resources at the detriment of the African people continue for generations to come? These are questions that should go through the minds of every African and answers should be demanded. History has shown us that whenever minerals are discovered in any African country, the next thing we hear is that so and so foreign company just signed a contract with the government to mine it. This in itself is a problem because why do African countries always need the help of a big foreign company to line their minerals? Can’t it be done by the government? But this is not even a big problem. The big problem is why African governments contract with these foreign companies that are not beneficial to them as a government and then to the people.? This has been what has been happening with every successive government in African countries since Independence. The mining contract always gives more to the foreign company and peanuts to the nations. Yet this kind of contract seems to be the norm in Africa. The question is why?

The mineral in question belongs to the African people, yet these foreign companies that come to mine it are given the freedom to mine as they like, and in exchange for what? A mere 5 or 10 percent royalty paid to the government. Meanwhile, they are given tax holidays for the period they are in the country and end up taking millions and sometimes even billions of dollars out of the African country. Don’t forget the fact that these foreigners also pollute the environment which they do not pay any compensation for while they are mining. So, how is any of this beneficial to the African people? Is it that the governments are so weak that they can negotiate better terms? Honestly, it seems as if the government are the ones begging these foreign companies when it should be the other way round. This is the reason why the people of Ghana are so angry with their government because once again, the government went on to sign a cheap deal with an Australian company to mine lithium, a mineral that is currently the new gold in the global market. The annoying thing is the government of Ghana had the guts to defend the contract, saying that it is the best mining contract that has ever been signed in the history of Ghana. Honestly, does the government think the people of Ghana are dumb? That statement has to be the most outrageous ever because if you take a look at the contract, you will discover that Ghana had better deals in the 1970s and 1980s. Another reason why this lithium deal is annoying is that it came at a time when some African countries made plans to protect their minerals from exploitation and gain more value from it by banning the exportation of unprocessed minerals. In addition, the world is currently pushing for green energy, and the minerals such as lithium, needed for this energy are located in Africa. This means African countries are in a better position to negotiate for deals which would benefit the country.

However, Ghanaians woke up one morning to hear that their government had signed a cheap deal with an Australian company to mine their lithium. What a shame for the government of Ghana. Now, let’s take a look at the contract signed between Ghana and the Australian company, Atlantic Lithium. According to the contract, Barari DV Ghana Ltd, a unit of Atlantic Lithium, was granted a 15-year lease to start constructing a lithium mine at a 42.6-kilometer site at Ewoyaa in the country’s Central Region. Half of the lithium from Ewoyaa will be refined in a refinery that belongs to Carolina-based Piedmont Lithium Ltd, a company that is the second largest shareholder of Atlantic Lithium and will provide most of the funds in building the mine. In addition, Atlantic Lithium was granted a 10-year tax holiday under the Free Zones program, plus special concessions that will make it pay 30% to 50% of the usual cost of electricity. In exchange for all this, Ghana would receive a 10% royalty rate and 13% free carried interest by the state, compared with the existing 5% and 10% respectively for other minerals. The company shall also pay 1% of its revenue into a community development fund. The contract also requires that Ghana’s sovereign wealth fund, the Minerals Income Investment Fund, will invest to acquire a 6% interest in the company’s Ghana portfolio and a 3.06% stake in Atlantic Lithium itself. So, does this look like a good deal for Ghana? The people of Ghana do not think so and since the deal was signed, made their opinions known to the government. Everybody including lawyers, civil society organizations, and the opposition party as well as traditional leaders have come out to voice their opinion against this deal.

The NDC, through its National Communications Officer, Sammy Gyamfi, launched a full-scale attack on the Ghana-Barari DV lithium agreement, deeming it “not in the best interest of Ghana.” The opposition party has even demanded that Parliament block the ratification of the deal, citing concerns about transparency, fairness, and the ultimate benefit to the Ghanaian people. Paramount Chief of Dormaa Traditional Area, Osagyefo Oseadeeyo Agyemang Badu II, has called on the government to temporarily halt the implementation of the agreement. The respected traditional leader believes that the current terms of the deal do not appear advantageous for the country. It’s very good that Ghanaians are speaking up against this lithium deal because the truth is there is no difference between this deal and all the other mineral deals that the government has made with other foreign companies. People who support the lithium deal state that Atlantic Lithium deserves the concessions they were given because they were the ones who discovered Lithium in Ghana and spent millions of dollars in doing so, meaning that Ghana is the lucky beneficiary of a sliver of treasure it had no idea existed and has never toiled for. Can you imagine this claim which is even a very big lie?

Atlantic Lithium did not discover lithium in Ghana. It was indeed Ghanaian geological studies that confirmed lithium deposits in the licensed area date more than 50 years ago and it was with this knowledge that the Australian company came into the country to explore the mines. Additionally, the idea that Atlantic Lithium spent vast sums of money in the exploration is not true. The majority of the funds used in the exploration was obtained from a US-based company, Piedmont, and the reason why Piedmont agreed to fund it is because Atlantic agreed to sell half of the lithium mined to Piedmont. This means that Ghana’s latent wealth funded the project. So, from what we can see the person who gains the biggest benefit in this deal is Atlantic Lithium and not Ghana. The fact that the Minister of Lands and Natural Resources had the guts to say that a 13 percent royalty rate is the best to be negotiated is such a shame. If this deal goes through, there will be no profit to the government and neither to the people. It would simply be history repeating itself because it happened when oil was discovered in Ghana and also when gold was discovered. The discovery of these two minerals did nothing to change the economy of Ghana. In fact, like most African countries, Ghana was way better in the early years of its Independence than now.

The question now is “Is there no better way for the government of Ghana and by extension African governments, to sign contracts that would be beneficial to their country? Come to think of it, why do African governments feel that the only option when it comes to our mineral resources is to sign royalty-based contracts with foreign companies? Isn’t it time for Africa to use its resources to push for industrialization? The fact is Africa will not be industrialized if the government continues to sign these agreements that allow foreign companies to mine minerals, take the minerals out of the country, and process them into finished goods which they would in turn sell back to Africa at very high prices. African governments need to understand that there are other options. Take Bolivia for instance. Bolivia like Ghana has lithium but did the country rush to sign a cheap deal with the first company that comes their way? Of course they didn’t. Instead, Bolivia insisted that unless and until lithium factories are set up in their country, and unless and until the extracted lithium is processed into finished goods such as batteries, it will never sign any agreement to extract lithium out of the country. Why can’t Ghana ask for the same thing?

Imagine if that were the deal signed with Atlantic Lithium, not only would there be jobs for the extraction of the lithium when the companies were set up, but the citizens will also get more jobs when the processing companies are also set up for the processing of the lithium into finished goods. In addition, each factory along the chain of production would be paying taxes to the state from the government level to the local level in addition to income tax from all these employees. Also, when the finished goods are exported the country gets export taxes and so many other benefits too. So, again we ask why can’t Ghana ask for the same thing? These African governments keep on talking about how Africa needs to be industrialized but when it comes to actions that need to be put in place for this to happen, they are all talks. Honestly, things need to change. It is time to end mining contracts that are not beneficial to African countries. It is time for African governments to insist on using African minerals to industrialize their countries. It is time for African governments to say no to royalty-based agreements. Africa needs to wake up so we can catch up to the rest of the world.

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