It appears that the debates surrounding the country’s lithium royalty rate are not ending anytime soon, as new ideas, proposals, and demands emerge almost every day, with the latest one being the call for the government to adopt a “sliding scale” royalty system.
This model, the proponent believes, could prevent Ghana from shortchanging itself in one of the most valuable mineral markets of the future.
In an open letter to Members of Parliament who are currently working on the ratification of the deal, analyst Sitsofe Mensah argued that the country must not rush into a flat, low royalty rate that fails to reflect the real value of lithium. He maintains that his call is crucial, especially as prices swing sharply from year to year.
It must, however, be noted that amid this call for the government not to rush in ratifying the deal, chiefs and residents of the Ewoyaa enclave are becoming agitated and frustrated over the delay, which has dragged on for two years.
The residents complain that the delays have brought the communities to a standstill, halting major economic activities, hence the call for fast-paced processes.
But Sistofe Mensah says Ghana deserves better and hence must not rush to give approval to the deal in its current state when the mineral’s price rises. Given the situation at hand, he believes a sliding scale system is the way to go.
A sliding scale system means the country earns more when prices go up and still earns something fair when prices fall. The experts further explain that it is a flexible model adopted by major mining countries such as Chile, where the state receives a higher share, sometimes up to 40 percent, when global prices are high.
Unlike a fixed rate, which stays the same no matter how profitable the investor becomes, a sliding scale adjusts automatically and ensures Ghana never leaves money on the table.
“While Ghana settles for crumbs, our peers are securing feasts. Chile: Uses a sliding scale royalty that captures “super-profits.” When prices rise, the country earns more (up to 40% effective rates in high-price bands). Why is Ghana locking in a flat, low rate in a volatile market?,” he quizzed.
With the fixed rate, Sistofe Mensah warns that Ghana risks repeating old mistakes of entering long-term mineral agreements that offer little benefit once profits skyrocket.
“You cannot, in good conscience, sign away our future wealth for a pittance while simultaneously approving taxes on your constituents to fill the budget gaps. That is a moral failure. Send this agreement back. Demand a sliding scale,” he further insisted.
From the analysis, the possible impact of adopting a sliding scale is significant. It could provide Ghana with a stronger, more stable income stream to support public needs like schools, hospitals, and local development projects.
It also reduces the need for future taxes or painful budget measures because the mineral itself would be doing more of the heavy lifting.
For now, despite the divided opinions, the clarion call running through all commentaries is that Ghanaians want a fair deal, not just any deal. With lithium now essential for electric car batteries and global clean energy ambitions, many believe this is a rare chance for Ghana to secure long-term value from its natural resources.
