EITI Report: District Assemblies misuse mineral royalties for recurrent spending instead of development
A report by the Ghana Extractive Industry and Transparency Initiative (EITI) reveals that most district assemblies are using their share of mineral royalties for recurrent expenditures rather than development projects.
These expenses include the renovation of Assembly buildings, purchasing stationery, and garbage collection.
In an interview, the Co-Chair of EITI, Dr. Stephen Mantew, explained that if mineral resource revenues are spent in this way, it will take a long time for mining communities to benefit from the mineral fund’s development potential.
Dr. Mantew further emphasized that the Assembly is obligated to allocate its share of the mineral royalty for development purposes.
He also provided a breakdown of how the fund is distributed.
“The formula for distribution is that out of the 20% is, distributed to agencies and institutions in the mineral sector with the purpose of strengthening them to play their role. Some of them go to research institutions and also training institutions such as the University of Mines and Technology. The remaining half, which is 10%, is transferred to the office of the administrator of Stool Lands, who takes 1% to cover its administrative expenses, and then the remaining 9% is converted into a whole and 55% is given to the district assembly. Twenty-five percent is given to the stool and 20% to the traditional council,”
” It’s between the stool and the traditional council, they get 45%, and the assembly gets 55%. Now, the legal injunction is that the assembly is required to use its share of that mineral royalty for development purposes. The other bit which goes to the assembly is what we are concerned about. “
“According to the EITI report, most of the districts tend to spend their share of mineral royalty on recurrent expenditure.”
” If you are going to use revenues from a risk source such as minerals, gold, in this way, the chances are that you will mind gold for God knows how long and so will not see any real development in the whole communities. And so the Ghana EITI and other stakeholders have been pushing for the development of guidelines to kind of oversee how these revenues are used in the mining community,”
He said that though royalties to stools and traditional areas have been spelt out in the constitution, attention should be paid during the ongoing review process to make some of their money go into development.
” The traditional authority is required according to the constitution to use their 45% share for the maintenance of the stool in keeping with its status. This is very ambiguous, and it has lent itself to diverse interpretations. The chiefs actually claimed that their understanding of the maintenance of the stool in keeping with this status is to buy royal regalia, pay staff who work in the palaces, maintain the palace, and renovate it as and when needed.”
” And again, any other expenses such as organization of the festival. The argument has been that since the stool is a representative of the traditional area, I believe the chiefs should be required to spend part of their money on development projects.”
