Hon
Members, Motion numbered
12 to be moved by the
Chairman of the Committee .
GoG/ IDA Credit Facility
Agreement for the Ghana
Landscape Restoration
and Small Scale Mining
Project .
Chairman of the
Committee (Mr Kwaku
Agyeman Kwarteng): Mr
Speaker, I rise to move that
this Honourable House adopts
the Report of the Finance
Committee on the Credit
Facility Agreement between
the Government of the
Republic of Ghana
(represented by the Ministry
of Finance) and the
International Development
Association (IDA) of the
World Bank Group (WBG) for
an amount of Seventy-Five
Million United States Dollars
(US$75,000,000.00){supplem
ented by a grant amount of
US$28,360,000.00 (to be
provided through the
following Grant Agreements:
[i] GEF - US$12,756,881.00;
[ii] PROGREEN -
US$15,000,000.00;
[iii] EGPS - US$600,000.00)} for the Ghana Landscape Restoration
and Small Scale Mining Project.
Restoration and Small Scale Mining Project.
Mr Speaker, I present the report of your committee.
1.0 Introduction
The Credit Facility Agreement between the Government of the Republic of
Ghana (represented by the Ministry of Finance) and the International
Development Association (IDA) of the World Bank Group (WBG) for an
amount of Seventy-Five Million United States Dollars (US$75,000,000.00)
{supplemented by a grant amount of US$28,360,000.00 (to be provided through
the following Grant Agreements: [i] GEF - US$12,756,881.00; [ii] PROGREEN
- US$15,000,000.00; [iii] EGPS - US$600,000.00)} for the Ghana Landscape Restoration and Small Scale Mining Project was presented to the House on
Wednesday 15th December, 2021 by the Hon. Deputy Minister for Finance, Mrs
Abena Osei-Asare, on behalf of the Minister responsible for Finance in
accordance with Articles 181 of the 1992 Constitution of the Republic of Ghana.
The Agreement was subsequently referred to the Finance Committee for
consideration and report in accordance with Orders 169 and 171 of the Standing
Orders of the Parliament of Ghana.
The Committee met and considered the referral with the Minister for Lands and
Natural Resources, Hon. Samuel Abu Jinapor, Deputy Minister for Lands and
Natural Resources, Hon. George Mireku Duker, Deputy Ministers for Finance,
Hon. Abena Osei-Asare and John Ampontuah Kumah as well as a team of
officials from the Ministries of Finance and Lands and Natural Resources.
The Committee is grateful to the above-mentioned Honourable Minister,
Honourable Deputy Ministers and the team of officials for attending upon and
assisting the Committee in its deliberations.
2.0 References
The Committee referred to and was guided by the following documents inter
alia during its deliberations on the Agreement:
• The 1992 Constitution of the Republic of Ghana;
• The Standing Orders of the Parliament of Ghana;
• The Public Financial Management Act, 2016 (Act 921).
Restoration and Small Scale Mining Project.
3.0 Background
Ghana has recorded commendable high growth over the past two decades. This growth has been
largely fueled by massive natural resource exploitation in the agricultural and mining sectors in
addition to a thriving services sector.
Given the critical role of natural resources to sustained socio-economic development, several policy
and regulatory interventions have been promoted. For instance, Government's mineral exploration policy is to ensure sustainable extraction of mineral resources, with effective linkages to the rest of
the economy.
Other policy interventions have also been geared towards ensuring (i) environmentally sustainable
mining and logging; development and promotion of mining communities; (iii) development of a
framework for mineral revenue management; (iv) land restoration after mining operations are
undertaken; (v) comprehensive tackling of illegal and unsustainable mining; and (vi) provision of
incentives to attract private investors into sustainable exploration of unexploited mineral resources,
especially in the Upper West, Upper East, Northern Regions, and other parts of the country.
The effectiveness of these interventions have been mixed and varied.
The effects of environmentally destructive mining practices have been exacerbated by the threats
posed by the increasing climate change to the health and well-being of people and communities,
livelihoods, natural and agricultural resources, and infrastructure. In response, several climate change
interventions including the (i)National Climate Change Policy (NCCP) launched in July 2014, to
provide strategic direction for achieving a climate-resilient and climate-compatible economy
through equitable, low-carbon economic growth; and (ii) Paris Climate Agreement signed in
December 2016, under which Ghana has committed to reduce greenhouse gas emissions by 15 per
cent by 2030.
In spite of these policy and regulatory advances, key challenges to the sustainable exploitation of the
environment persist. A major challenge is the Artisanal and Small-Scale Mining. To specifically
address the devastating impact of unregulated mining, Government with support from the World
Bank and other Development Partners seeks to implement the proposed Ghana Landscape
Restoration and Small Scale Mining Project (GLRSSMP). The Project is designed to strengthen
integrated natural resource management and increase benefits to communities in targeted savannah
and cocoa forest landscapes.
4.0 Purpose of the Facility
The purpose of the Credit Facility is to enable Government to raise funds to finance the GLRSSMP.
5.0 Terms of the Facility
The summarised terms and conditions of the Credit Facility Agreement are as follows:
Restoration and Small Scale Mining Project.
Table 1 - Terms
Repayment 25 years
Period
Grace Period 5 years
Maximum 0.5 - One-half of one per cent (1/2 of 1%)
Commitment per annum on the Unwithdrawn Financing
Charge Balance.
Service Charge 1.57% - sum of three-fourths of one
per cent (3/4 of 1%) per annum plus the
Basis Adjustment (+82bps) to the Service
Charge on the Withdrawn Credit Balance.
Interest Charge 1.37% - sum of one and a quarter per cent
(1.25%) per annum plus the Basis
Adjustment to the Interest Charge
(+12bps) on the Withdrawn Credit
Balance.
Grant Element 18.85%
Restoration and Small Scale Mining Project.
6.0 Project Scope and Cost Breakdown
The GLRSSMP will be implemented through the following key components:
Component 1: Institutional Strengthening for Participatory
Landscape Management - US$14.21 million (IDA US$10.66m, GEF
US$2.51m, PROGREEN US$1.04m) - This component will enhance multipurpose land and water management models at the national level and
support the development of spatial planning tools for mapping and
monitoring impacts, and effective monitoring of sustainable cocoa
production.
Component 2: Enhanced Governance in Support of Sustainable ASM
- US$17.48 million (IDA US$16.88m,
EGPS US$0.6m) - This component will strengthen the regulatory
framework for ASM, with a focus on modernizing regulatory instruments
and building the capacity of key government agencies involved in ASM
regulation and compliance monitoring as well as district management
committees.
Component 3: Sustainable Crop and Forest Landscape Management
- US$60.28 million (IDA US$38.26m, GEF US$9.14m, PROGREEN
US$12.88m) - This component seeks to link improved food production
and ecological integrity through investments in production and forest
landscapes, focusing on promotion of climate-smart agriculture,
conservation, and restoration activities.
Component 4: Project Monitoring and Knowledge Management -
US$8.39 million (US$6.2 million from IDA, US$1.11 million from
GEF, and US$1.08 million from PROGREEN) - This component will
support robust project management and implementation. It will have two
subcomponents, each led by a respective Project Coordination Unit at the
Ministry of Environment, Science, Technology and Innovation (MESTI)
represented by the Environmental Protection Agency (EPA) and Ministry
of Lands Natural Resources (MLNR).
Component 5: Contingent Emergency Response Component - A
Contingent Emergency Response Component (CERC) with zero
allocation will be created and made implementation-ready to allow
Government to respond quickly in case of an eligible emergency.
Restoration and Small Scale Mining Project.
These cost do not include the project preparatory advance (PPA)
received by the Ministry of Lands and Natural Resources from IDA
(US$3.0 million). The project is expected to end on 30th September,
2027.
Leveraged Additional Grant Financing: Furthermore, the US$75.0 million
IDA credit provides Ghana the opportunity to access a total grant facility of
US$28.36 million from the Global Environment Facility (GEF),
PROGREEN Multi-Donor Trust Fund, and the Extractives Global
Programmatic Support (EGPS). The grant will complement the IDA
financing to foster integrated landscape and resource management practices
and sustainable ASM
Table 2 below provides an overview of the components and costs associated
with the respective financing:
Table 2. Component Costs (US$ Million)
Component/Subcomponent
Total
Cost IDA GEF PROGREEN EGPS
3.1. Planning, capacity, and
implementation of SLWM in
target 30.38 16.53 6.83 7.02 0.00
micro-watersheds
3.2. Value addition, market
access, and
6.50 3.83 1.30 1.37 0.00
income diversification
3.3. Forest management
planning and
7.85 4.88 1.01 1.96 0.00
investments in and around
forest reserves
Restoration and Small Scale Mining Project.
3.4. Management of wildlife
protected
7.51 4.98 0.00 2.53 0.00
areas and biological corridors
3.5. Reclamation of mined out
sites and
8.04 8.04 0.00 0.00 0.00
alternative livelihoods
Total 60.28 38.26 9.14 12.88 0.00
4.1. Project monitoring and
knowledge
5.39 3.20 1.11 1.08 0.00
management (EPA PCU)
4.2. Project monitoring
(MLNR PCU) 3.00 3.00 0.00 0.00 0.00
Total 8.39 6.20 1.11 1.08 0.00
Component 5. Contingency
0.00 0.00 0.00 0.00 0.00
Emergency Response
Project Preparatory Advance
(MLNR) 3.00 3.00 0.00 0.00 0.00
Total Project Cost 103.36 75.00 12.76 15.00 0.60
6.0 Observations
6.1 Need to Curb Environmental Degradation
The Committee was informed that the GLRSSMP is largely triggered
by the urgent need to curb the threats posed by environmental
Restoration and Small Scale Mining Project.
degradation and climate change. Based on the implementation
efficiency of the ongoing Forest Investment Programme, and lessons
learnt from the just ended Sustainable Land and Water Management
Project, the GLRSSMP presents a perfect opportunity to scale-up the
interventions within the cocoa landscapes in the Semi Deciduous and
Transition Zones as well as forest landscapes in the Northern
Savannah region.
Government is committed to improving the livelihoods of target
communities by harnessing investment in improved land and forest
management activities, and sustainable livelihoods programs that
would reduce consumptive pressures on forests.
6.2 Complex Land Tenure and ASM
The Committee noted that the complexities in Ghana's land tenure, limited land-use planning, sub-optimal land use, and unsustainable
land-use practices mostly compromises the full potential of
Artisanal and Small-Scale Mining (ASM), and negatively affects
agricultural productivity. This has had adverse effects on
environmental quality, food security and income generation for
rural communities, and on general economic development. In
addition, the high degree of informality in the ASM sector erodes
the potential fiscal revenues from the sector, due to smuggling and
tax evasion.
There is thus the urgent need for steps to be taken to enhance
effective management of ASM, especially due to the dependence
of several communities on mining and agricultural endowments for
their livelihoods.
6.3 Improved and Sustainable Land Management Practices
The project is expected to support sustainable practices in production
landscapes for key food crops through investment and promotion of
climate-smart agriculture, conservation, and restoration activities. This
will promote sustainable food systems and agriculture value chains;
and boost green recovery of rural livelihoods in target forested areas.
6.4 ASM Formalization and Accountability
Project activities especially under Component 2 will lead to a
formalized ASM sector through (i) reclassification of small and
Restoration and Small Scale Mining Project.
medium-scale mining licenses and registration of license holders, (ii)
streamlining ASM administration, and (iii) enhancing district capacity
to manage ASM. This will ensure higher tax receipts from registered
businesses and, expectedly, a better retention of value addition from
gold.
6.5 Job Creation
The Committee noted the growing significance of mining as a driver of
forest loss and its negative impacts on waterways and observed that the
project interventions will support appropriate forest landscape
restoration activities, as well as reclamation of mined out areas.
Alternative livelihood opportunities would also be provided to miners
and farmers of target communities to help them create other sources of
income to replace mining.
7.0 Conclusion
The Committee has carefully considered the Agreement and
respectfully recommends to the House to adopt this report and approve
by resolution, the Credit Facility Agreement between the Government
of the Republic of Ghana (represented by the Ministry of Finance) and
the International Development Association (IDA) of the World Bank
Group (WBG) for an amount of Seventy-Five Million United States
Dollars (US$75,000,000.00) {supplemented by a grant amount of
US$28,360,000.00 (to be provided through the following Grant
Agreements: [i] GEF - US$12,756,881.00; [ii] PROGREEN - US$15,000,000.00; [iii] EGPS - US$600,000.00)} for the Ghana Landscape Restoration and Small Scale Mining Project in accordance
with Article 181 of the 1992 Constitution of the Republic of Ghana.
Respectfully Submitted
Restoration and Small Scale Mining Project.
4. 51 p.m.
Minority Leader (Mr Haruna
Iddrisu): Mr Speaker, I have read the
Motion and have perused the Report
of the Hon Chairman of the
Committee. Therefore, even before
the Motion is seconded for you to
proceed, there is a constitutional
procedural issue that must be
addressed. With your permission, I
would refer you to article 181 of the
1992 Constitution and further refer
you to page 6 of the Committee's Report. Before we proceed, the Hon
Chairman would have to provide us
with particulars so we would know
what this House is doing.
Mr Speaker, article 181 (1)
mandates Parliament to approve loan
agreements, and I would crave your
indulgence to quote:
“Parliament may, by a resolution supported by the votes of a
majority of all the members of
Parliament, authorise the
Government to enter into an
agreement for the granting of a
loan...”
Mr Speaker, when you read page 5
of the Report, there is no stated
amount of the loan. I just see terms
captured on page 6. Now, we need to
know the loan amount we are
approving and the terms and
conditions of the loan amount
pursuant to article 181 (1) of the
Constitution. This is because the Hon
Chairman's Report just states an amount of US$75,000,000.00 on page
1 and then, it further states a grant
amount of US$28,360,000.00. This
House has no obligations with regards
to the approval of grants.
Mr Speaker, so, we need clarity
before you allow this Motion to be
seconded. Other than that, as it stands,
it does not satisfy the minimum
constitutional requirement. What are
we approving? What loan amount are
we approving and under what terms
and conditions? I have read to the last
page of the Report and there is no
amount stated. Therefore, if that
clarity can be provided then we can
proceed further for the Motion to be
seconded other than that, we would
not be satisfying what is expected of
us as a House.
Mr Speaker, I thank you.
