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High Levels of Offshore Retention, low Levels of Royalty Rates Hinder Africa

ACCRA, Ghana-TWN-Af-1 August, 2005-Mr.Abdulai Darimani, programme officer in the Environment Unit at TWN-Africa, has said that one of the reasons why money from mining has, contrary to popular belief, no benefit for domestic revenue is because companies are allowed by policy to retain as much as 40-90 per cent of their earnings in offshore accounts.

Speaking as a panellist on an Accra-based private radio station CITI 97.3FM’s "Business Digest" programme, he argued that there are "high levels of offshore retention and low levels of royalty rates permitted by many national mining policies in Africa", adding that "Ghana’s shift to a HIPC status from a position of praise on its liberal mining policy best illustrates that the country does not benefit in any significant way from mining."

Responding to Newmont Communication Manager Mawuena Dumor’s criticism that TWN-Af was being excessively critical of the mining companies’ apparent efforts to make life equitable in the communities in which they operate, Darimani countered her criticism by arguing that "the focus of the argument should be the totality of the investment and not just a specific facility donated or provided by the mining company. Policymakers share the blame with the multinationals".

The argument is not to say that mining companies do not provide certain facilities for the communities in which they operate, some do. But more to emphasize that "when measuring the cost/benefit of a project, you’re not looking at a simplistic way of a school block, or a clinic block, but a totality of what is invested, destroyed and the balance in the distribution of the benefits generated by the investment". For instance, AngloGold and its affiliates might have provided social infrastructural facilities as claimed by its representative on this programme.

But it is also a fact that AngloGold and its affiliates had and continue to inflict pain and damage on the environment and the communities in and near where they operate. He continued: "for example, there are no signs of development in Obuasi Township that reflect the huge amount of gold retained by AngloGold in that city." He said that, in fact, when you look at the town, which he had visited many times, "the paved roads do not lead to commercial or business areas, but facilities of AngloGold."

In another response to the Newmount’s communication officer that no intellectual works exist on cost-benefit of mining Darimani countered that "abundant and concrete intellectual works exist on the industry as a whole and on specific mining projects."

The bottom line for Darimani is that once we measure all of these developments, including the net returns, "and equally measure the destruction, and tax holidays", countries, like Ghana, that are endowed with mineral resources are not only gaining very little from the work of the mining multinational companies, but, more seriously, the commercial banks within the country, as well as the people, "are losing".

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Social Watch calls for regulation of financial market

'ACCRA, Ghana--Dr.Rose Mensah-Kutin, Convenor of Network for Women’s Rights (NETRIGHT) has launched the 2009 Global Report of Social Watch titled, Making Finances Work: “People First”, with a call on the Ghana government to regulate activities of financial institutions in the country.

The report has called on governments to adopt measures to protect the human rights of people, through the regulation of the banking and financial sector.

It has further indicated that spending on stimulus packages is necessary to ensure full implementation of human rights.

Social Watch is an international non-governmental network of citizen’s organizations working to eradicate poverty and its causes. Both NETRIGHT and TWN-Africa are members and co-host the General Assembly of Social Watch which will be held in Accra from October 27-29.



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