Ghana risks losing the economic value of its lithium and bauxite resources given the continuous delays in the approval of the two leases by parliament. These are the sentiments of former Majority Leader Osei Kyei-Mensah-Bonsu.
Although the Nyinahin Bauxite and Ewoyaa Lithium have been leased to investors, parliament is yet to ratify the leases due to vehement opposition to the deal by some Civil Society Organizations (CSOs) and traditional leaders.
The traditional leaders and the CSOs are opposing the terms of the leases which they believe are fashioned along the old colonial agreements where raw materials are exported without any value-addition. In addition, they believe the leases do not sufficiently address the issue of local participation.
Appearing before the Lands and Natural Resources Committee of Parliament to make their case for the opposition, IMANI-Africa, the Institute of Economic Affairs (IEA), and two other CSOs pleaded with the committee to ensure that parliament reconsiders the terms of the two leases.
“We see the lithium lease as a concession, royalty tax type of lease. We do not think that type of lease is in the interest of the country,” the Director of Research at the IEA told the committee members.
But reacting to the concerns and the opposition by the CSOs, former Majority Leader and Member of the Committee, Osei Kyei-Mensah-Bonsu disclosed that Ghana could pay a heavy price if the opposition and the parliamentary approval prolong.
According to the former majority leader, these resources are not eternal and hence could be classified as stranded assets in the future.
Stranded assets are resources that have lost their economic value due to market conditions, regulations, and environmental concerns. Should lithium and bauxite be classified as stranded assets due to, for instance, climate change policies, they will become unexploitable hence losing their economic value.
Although Osei Kyei-Mensah-Bonsu is cautioning against the delays and the numerous oppositions to the leases, he pledged that it won’t be used as an excuse to enter into a bad deal for the state.
“We should not think that it is an eternal resource. What is happening now, pretty soon if we are not careful, it may fall in the category of stranded assets. That is not to say that we should not approach it with some degree of caution,” the former majority leader cautioned.
