December 12, 2012 / 8:26 AM / 7 years ago

Ghana's future depends on fair share from resources - president

ACCRA (Reuters) - Ghana’s President John Dramani Mahama said on Tuesday he will press foreign energy and mining firms for more revenue during his new term, won in elections he said proved the strength of democracy in the West African state.

He said the cocoa, oil and gold-exporting country would respect existing contracts, but would seek to convince companies to agree changes to boost the state take from taxes and royalties.

“There is a lot of work to do in the next four years to consolidate Ghana’s transition into a middle-income country, and that’s where I will focus,” he told Reuters in an interview.

“We’re partners in this and we abide by all international agreements we’ve signed,” he said.

Mahama - who served as vice president to John Atta Mills and replaced Mills after his death in July - narrowly beat his opposition rival Nana Akufo-Addo in December 7 polls plagued by technical problems and marred by an opposition allegation the results were rigged.

But observers praised the vote as free and fair, and lauded Ghanaians for remaining peaceful - burnishing the country’s record as an island of stability in a region known for coups and civil wars.

Mahama said the election made Ghana an “example for the rest for the continent” - in stark contrast to crisis-stricken regional neighbours like Mali and Ivory Coast.

“I don’t think Ghana can get into the kind of fratricidal conflict that we’ve seen elsewhere,” he said sitting in the shade of a mango tree in the yard of his sprawling villa in a posh neighbourhood of the capital Accra.

“Because of the stability of our politics and security, and also because of the stable macroeconomic environment, I think that (Ghana) is attractive to investors,” he said.

Ghana was Africa’s fastest growing economy in 2011, its first full year of oil production from the offshore Jubilee field operated by British-based firm Tullow Oil, earning it a reputation as a ‘growth gem’.


Mahama said he would seek to leverage the country’s appeal to wrest better terms from resource companies.

“With regards to the oil, our main problem is with income taxes,” he said, pointing out that Tullow’s contract allowed it to avoid income tax payments until it has recovered the costs of bringing a field into production.

“We could use that revenue, so if we had a way of getting some payments on income taxes, on account even, that is something we would want to look at,” he said.

Tullow missed a plateau target of 120,000 barrels per day by a wide margin in 2012, but aims to reach that target in 2013 aided by a $1.2 billion extension to Jubilee, according to state-run Ghana National Petroleum Corporation.

Mahama said he also expects new oil fields to come on line by late 2014 or early 2015, further brightening the outlook for production in one of Africa’s newest oil exporters.

Tullow submitted a development plan for its Tweneboa, Enyenra and Ntomme (TEN) project in November after positive drilling results, but has yet to release the timing of bringing it online.

Mahama said Ghana was reviewing a contract with Chinese firm Sinopec to build a $700 million processing plant for natural gas after widespread criticism of the project’s cost. The plant is meant to come online next year.

“I have asked for a technical audit to be done and we need to see the results,” he said.

Ghana is in the midst of discussions with gold-mining companies to improve terms. Mahama said the state was seeking to loosen up so-called ‘stability agreements’ held by some firms that lock in royalty and tax rates.

Ghana this year raised royalties on gold to five percent from three percent, a change that did not apply to miners like AngloGold Ashanti and Newmont protected by stability agreements.

“There has been a committee working with them to see how we can refine those stability agreements so that Ghana can also benefit and get its proper share,” he said.

Ghana floated the idea of a windfall profits tax on gold miners earlier this year, but the effort has stalled under pressure from the industry.


Mahama’s victory has been tainted by an opposition complaint of result rigging. Top rival Akufo-Addo said on Tuesday his party would bring their complaint to the Supreme Court.

Mahama said he would seek to ease tensions by ensuring his policies benefit all Ghanaians by improving infrastructure along with access to electricity, education and jobs.

“One of my core focuses is to ensure Ghanaians, no matter their political or ethnic affiliation, have equal access to any economic opportunity that this country has to offer.”

“What brings the kind of surprise you saw in Mali is the problem of exclusion. I love Ghana,” he said.

Mahama has said he aims to raise average income in the country to $2,300 per year, double the level in 2009.

Mahama, a 54-year-old historian with a background in communications, received congratulations from African leaders, the United States and the European Union for his win. He will be sworn in January.

“I think that overall Ghana has been the winner, Ghanaians are the heroes of this election,” he said.

Writing by Richard Valdmanis; Editing by Joe Bavier and Michael Roddy

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