Lithium Royalty Rate Cut to 5% Sparks Concerns
Accra – The Africa Policy Lens (APL) is calling for greater public scrutiny of the government’s move to reduce Ghana’s royalty rate in the Barari DV lithium agreement from 10% to 5%. The policy think tank argues the reduction is unjustified and could significantly impact the country’s potential revenue from the emerging lithium industry.
The initial 10% royalty rate was agreed upon between the previous administration and Barari DV Ghana Limited after a comprehensive review of rates for lithium and related minerals. However, the current government, which previously criticised the 10% rate as inadequate while in opposition, is now proposing a reduction, citing alleged unlawful conduct by the previous government in the initial negotiations.
At a press conference held in Accra, the APL expressed deep concern over the government’s justification. They maintain that the claim of illegality is unsubstantiated and that the proposed reduction raises serious questions about the prioritisation of national interests.
“The analysis demonstrates that the previous government acted within the law in securing what remains one of Ghana’s most advantageous mining agreements to date,” the APL stated, following a detailed presentation of the legal and policy foundations of the original 10% arrangement.
The APL further warned that the government’s assertions regarding lithium pricing and the lease’s legality are “misleading” and warrant the attention of both citizens and oversight institutions. They estimate that implementing the 5% rate would result in the loss of millions of dollars in potential revenue for Ghana.
According to the APL, such a reduction would weaken Ghana’s fiscal position and could be difficult to reverse, particularly given the constraints imposed by international investment frameworks regarding upward adjustments to royalty rates.
The organisation is urging Parliament to reject the proposed 5% rate and instead reaffirm the original 10% royalty. “It is therefore imperative that Parliament either ratifies the original lease secured under the previous administration or ensures that any revised terms strengthen Ghana’s position. Short‑term commodity price fluctuations should not be used as justification for diluting the country’s fiscal terms,” the APL emphasised.
The APL also voiced concerns about the messaging emanating from certain state institutions, suggesting they appear to be favouring the mining company’s narrative over the protection of Ghana’s national interests. The group is calling for a more transparent and accountable approach to the lithium agreement negotiations.
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