The Administrator of the Minerals Development Fund, MDF, Dr. Lawrence Kweku Armah, has disclosed to Citi News that his outfit has so far disbursed GHS 5.6 million for the funding of 17 mining community development schemes in 5 key mining regions.
Dr. Armah who spoke to Citi News in Takoradi during a training session on strategic local economic development planning for Local Management Committees warned against expenditures that border on allocations on recurrent projects.
“Basically, the money that goes to the LMC’s was started last year, and we disbursed over GHS 5 million to the various assemblies. It is a button-up approach. Thus, the community themselves would own the projects and the projects belong to the communities. Therefore, they have to identify their needs or whatever project they want to undertake. When it comes to the financial aspect, we are trying to prevent or ask them that they don’t use for recurrent expenditure but use more of the capital expenditures.”
“For instance, they are not allowed to use more than 2% of their allocations for their managerial purposes. So when you are given let’s say GHS100,000, you are supposed to use only 2% of that money to manage the affairs of the Local Management Committees. The rest should go straight into the capital expenditure. What we have also done to ensure no duplication of projects between the Assemblies and the Local Management Committees is our involvement of the Chief Executives of the various beneficiary MMDAs,” he said.
Meanwhile, co-Chair of the Ghana Extractive Industry Transparency Initiative, GHEITI, Dr. Steve Manteaw who gave a presentation at the training, in a Citi News interview also warned the Local Management Committees against duplication and parallel projects.
“The mere introduction of this scheme creates the impression that on the other hand there’s been some failure on the part of the assemblies in putting the communities share of mineral royalties to good use. And therefore the need to create this parallel framework for using a portion of some additional revenue that has been provided for in the law for the same purpose of promoting development at the local level.”
“The risk I see here is a potential duplication of efforts, turf-war and some conflicts because the assembly by virtue of our local government Act, has the primary responsibility for development at the local level. So when you create a parallel structure in the form of the mining community development schemes and you don’t manage that process very well, you will have the two schemes going in different directions or either duplicating their effort.”, he said.
Country Director of West Africa Governance and Economic Sustainability in Extractive Areas, WAGES, Emelia Ayipio Asamoah told Citi News that WAGES has partnered with the MDF on the implementation of the Local Management Committee’s work.
She said the LMC is already deepening transparency and participation in the management of mineral revenues at the local level.
“The main goal of WAGES is to maximize the socio-economic benefits from the extractives sector for communities, especially women and youth in West Africa. Right now a lot of the things we are seeing is involvement.”
“Thus a lot of active participation in decision-making at the community level and also the capacity of even the leaders of the Local Management Committees that are in charge of managing these funds. Before this project, some didn’t even know the mineral royalties disbursement formula, which is how much come to us and why it is this amount. But as we have been doing engagement with them, that information has come to light. We [WAGES] have facilitated the establishment of Monitoring Committees as well, and we have seen that the monitoring committees have been tracking the projects that these funds have been used for and reporting back.”
The Mineral Development Fund was created to receive mineral royalties for efficiency and sustainable community development following the century-old complaints from mineral-rich communities of underdevelopment despite their resource exploitation.
This led to the establishment of Mining Community Development Schemes to be managed by Local Management Committees that receives 20 percent of the MDF allocations.