Amid the current debate over Ghana’s lithium royalty, the founder and president of IMANI Africa, Franklin Cudjoe, has cautioned the government that it will be digging its own grave should it continue to give concessions to already profitable private businesses.
Franklin Cudjoe says Ghana risks long-term economic collapse if it continues to grant generous concessions to companies that are already highly profitable.
He made this case when a delegation from IMANI appeared before Parliament’s Lands and Natural Resources Committee during discussions on Ghana’s lithium agreement.
Franklin Cudjoe questioned the logic behind why the country should further give concessions to mining companies, particularly Atlantic Lithium.
Justifying why the proposed reduction in the royalty rate from the earlier 10% to 5% is untenable, he used the company’s own numbers to explain that Atlantic Lithium structured its costs at about US$610 per tonne, while global lithium prices currently hover around US$1,200 per tonne, with past peaks reaching over US$1,500.
By his assessment, this places the company in a position to make close to a 45 percent margin even before accounting for profits.
“Lithium is playing around 1,200 dollars right now, and we understand. But they did that because they knew that the value of lithium could rise and fall. But they used the base rate as in their cost, which was rated at about 610 dollars. So it tells you that, as we speak, even if they got, if they started mining, clearly they are going to make about 45 percent margin, even before, I mean, that’s revenue, right, before the profits are taken away,” he argued.
He added, “And at the time we were willing to sign these things with them, in fact, the margins were just about 20 percent, because the lithium price at the time was 800 dollars. Now it’s gone up to about 1,200. So you ask yourself, I mean, on what basis are we saying that they need further concessions?”
Cudjoe warned that such generosity, if normalized, would be dangerous for the country. He argued that no economy can survive if the government repeatedly sacrifices public revenue for private gain, especially when those businesses are already making strong returns.
Already, its analysis has revealed that should the government proceed with the concession, Ghana will be losing about $20 million dollars annually in revenue.
While the immediate concern is lithium, Franklin Cudjoe’s argument goes beyond one mineral or one deal. He cautioned that the same mindset has quietly spread across other sectors, including gold, oil, gas, and even some public-private partnerships, where the state absorbs risk while private companies secure guaranteed returns.
Experts explain that such concessions were meant to attract investment into risky or unproven ventures, not to reward companies that are already profitable and well-positioned in global markets.
Continuing to blur this line, he warned, weakens Ghana’s bargaining power and drains resources needed for development.
“If every business in this country had a 45 percent margin profit and was still giving another, they were giving concessions; this country would collapse,” he emphasized.
The impact of such overly generous concessions on the people can be grave. Every concession given unnecessarily means less revenue for roads, schools, hospitals, and jobs.
In a country still grappling with debt and IMF conditions, argues that business people will always push for maximum advantage. It is the state’s responsibility to protect the public interest.
