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Gold Fields urges speedy resolution of Ghana economic slump - Ghana Business graphic

Friday, 16 October 2015

Gold Fields Ghana Limited (GFGL), a lead gold miner, has made a passionate appeal to the government to urgently solve the challenges facing the country for business confidence to rebound.

It explained that a strong rebound in business confidence was needed to help spur investments and growth in the private sector, which would then translate into increased revenues through taxes and other statutory payments to the government.

The company's Executive Vice-President (EVP) and Head of West Africa, Mr Alfred Baku, made the appeal in Accra when he presented a US$7 million cheque to the Ministry of Finance as interim dividend for the first half of this year.

The amount is in respect of the government's 10 per cent stake in Gold Fields, which operates the Darmang and Tarkwa mines, both in the Western Region.

It brings to US$11.5 million the total amount the company has paid to the government through the ministry as dividend in 2014.

It had initially paid a dividend of US$4.5 million to cover portions of its operations and the resulting profit in the 2014 financial year.

Following the two payments, Gold Fields Ghana’s total dividend to date now stands at US$87 million.

The US$7 million cheque was received by a Deputy Minister of Finance, Mrs Mona Quartey, who thanked the company for the gesture.

Power challenges

On the current challenges facing the private sector, Mr Baku said the situation had dampened growth in businesses.

Using Gold Fields as an example, he said the current power challenges had forced the company to shed off between 20 per cent and 30 per cent of its daily operations to be able to manage the shortfall in electricity supply.

In situations where the company is able to switch from the grid to private power plants and generators, Mr Baku said the cost of its electricity bill often almost quadrupled, resulting in an increased cost of production to the entire business.

"That obviously is a big blow to our operations and it has a great deal of effect on our bottom line and the amount of dividend we will declare," he said at the event which was witnessed by some senior executives of the company and ministry.

As of June, this year, the company’s total corporate tax payments totalled US$548 million.

Royalty payments

Mr Baku also called for the streamlining of royalty payments to the various district assemblies, explaining that the current system where the funds hardly got to the assemblies after they had been paid by mining companies was not the best for the reputation of the operators.

"What we have realised is that the allocation of royalties to the assemblies is not even enough, yet it doesn't get to them too. That in, itself, gives some cause for concern," he said.

In response, the deputy minister said the ministry had taken note of the various concerns raised and would work to address them.

She advised businesses to rationalise their operations in a manner that would cut down cost and make them efficient in the long term.

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