The government of Ghana under Section 43 of the Minerals and Mining Act of 2006, Act 732, has 10% Carried Interest in all mining companies registered under the Companies Act of 1963. These companies are required to submit on annual basis, their returns to the Registrar General’s Department and the Minerals Commission as well as conduct annual self-assessment and submit same to Ghana Revenue Authority for tax purposes.

iWatch Africa’s review of the financial statements of these mining companies: Chirano, Adamus, Gold Fields Abosso, Persus Mining, Ghana Manganese and Ghana Bauxite revealed that although in certain instances declared profits, they failed to transfer dividend attributable to the government.

Further checks by iWatch Africa at the Auditor General’s office also showed that these companies failed to obtain the needed prior approval from the Ministry of Finance for the plough back of the profit.

The Auditor General, Mr. Daniel Yaw Domelevo in his 2018 report revealed the absence of government representation on the boards of these mining companies, despite government ownership of 10 percent carried interest.  According to the Auditor General, this “inhibits oversight functions and possible cause for cost manipulation by the mining companies.”

Another concern noted by iWatch Africa when reviewing the financial statements of these companies was the staggering losses recorded by almost all the companies between 2013 to 2016.

The Auditor General has cited the possibility of “inflation of expenditures through transfer pricing manipulations,” as reasons for these losses, and blamed the Ghana Revenue Authority for their weak oversight responsibilities.

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The table below shows the profit/loss after tax (PAT), dividends declared and potential revenue due the state between 2013 and 2016.

Report by Gideon Sarpong | iWatch Africa | Follow @gideonsarpong

The post Failure of six mining companies to pay government dividends cost Ghana close to $15 million in 2018 appeared first on iWatch Africa.

The MLGRD on 7th June, 2012 signed a service agreement between the Republic of Ghana and M/S Zoomlion Limited for weekly disinfestation services at Bui and Bole catchment areas to control insects and to allow the construction of then Bui dam.

Our checks however revealed that there was no specific contract sum mentioned in the agreement between the parties contributing to the decision by the Ministry of Finance to reject the payment claims.

The Auditor General has also indicated that a letter dated 22nd November, 2016 and referenced B.II4/MLGRD/SAN/2016/02 directed that Bui Power Authority, Ministry of Power or MLGRD should pay the cost from the Internally Generated Fund.

The Finance Ministry has however requested the MLGRD to make adequate provision for the claims in their 2018-2019 budgets despite the fact that there was no contract sum in the original agreement.

Jospong Group, owners of waste management firm, Zoomlion and other subsidiaries, has in the past been accused of overpricing contract figures.

A report by Joy FM in 2017 indicated that Universal Plastic Product and Recycling Ltd, a subsidiary of the Jospong Group of Companies, and four other firms all belonging to the Jospong group, had overpriced a contract to supply 1 million waste bins and 900,000 packs of disposable bin liners to the country by about Ghc130 million.

The report said the company sold each of the 240litre bin to the state at GH¢258 when an invoice from the same company showed that the actual price was GH¢135.

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The Jospong Group however rejected the claims and described the report as malicious and calculated to tarnish the hard-won reputation of the company.

Report by:

Gideon Sarpong | Policy Analyst | iWatch Africa

The post Gov’t rejected payment claims of over GH¢40 million to Zoomlion in 2017 appeared first on iWatch Africa.