"Investors often get frustrated with the slow pace of transactions in Ghana, mainly due to bureaucracy and long waiting times, which have been magnified by the COVID -19 pandemic. Currently, regulatory approvals and processes take longer than they should because many government agencies continue to work on a shift basis rather than full time."
How has the pandemic affected Ghana?
In March 2020 Ghana, like most of the world, went into full lockdown for several weeks in an attempt to stop the spread of COVID-19 in the country. However, in April 2020, the government began to systematically ease restrictions to allow certain businesses and social gatherings to resume on a limited basis, subject to adhering to strict COVID -19 prevention protocols. As of September 1st, the number of reported COVID-19 cases stood at 44,298, with 42,963 recoveries. The air borders have also been opened, allowing some normality to resume.
Despite the unfortunate circumstances, JLD & MB remained busy throughout the lockdown, providing legal services for many of our clients who operate in the extractive sector, including mining, oil and gas, energy and clients in the financial services sector, all of whom were classified as essential businesses and thus remained operational. These companies continued to operate and transact and thus required legal and other services. However, other companies, particularly those in the hospitality industry, suffered significantly during the lockdown, and felt compelled to seek legal advice on restructuring, financing and labor issues.
Ghana is a top producer of gold in Africa- How do you believe the market rush to gold will reflect in terms of M&A activity in the gold mining sector of the country?
Generally, we expect to see some major M&A in the gold industry this year. Already some exciting transactions have been announced on the global market and we expect the same for Ghanaian mining companies.
With current gold prices on the rise, several of the major gold producers are looking for opportunities to expand their operations. JLD & MB has already advised on a number of mining acquisitions over the last few months and we expect to see more transactions in the near future.
What would be the main regulatory challenges a foreign investor interested in Ghana is likely to face?
Investors often get frustrated with the slow pace of transactions in Ghana, mainly due to bureaucracy and long waiting times, which have been magnified by the COVID-19 pandemic. Currently, regulatory approvals and processes take longer than they should because many government agencies continue to work on a shift basis rather than full time. International clients are generally accustomed to more automated and expeditious processes employed in their home countries.
Are there any policy developments that clients should be aware of?
We are aware that local content and local participation regulations are currently being considered for the Mining sector. Although there are various localization provisions in the current Minerals and Mining Act, 2006, Act 703 and corresponding regulations which seek to enforce localization policies and objectives, the aim of the local content and local participation regulations would be to consolidate the localization laws and policies and streamline processes, procedures and enforcement; similar to what has been done in the oil and gas sector. Furthermore, important amendments are being considered with respect to Act 703. These amendments may include changes to stabilization and other investment arrangements between investors and the Government of Ghana.
With estimates of over one million people involved in illegal mining or Galamsey in Ghana, what do you believe is the best approach to address this issue?
Illegal mining often stems from poverty and a lack of understanding of the serious consequences the practice has on lives and the environment. Those involved in illegal mining complain of loss of land and livelihood when their farms and lands are granted to licensed mining companies as concessions. Unfortunately, many local miners do not have the capital or expertise to obtain required license or to mine in a safe and sustainable manner; therefore, they resort to illegal mining. A way to tackle illegal mining on the local front may be through consistent education, raising awareness of the dangers of these activities and providing alternative sources of income for those in the local community. The large mining companies are also encouraged through their CSR efforts to support the community with education, technical and other training, infrastructure, projects and employment so as to reduce the loss of livelihood in those communities.
What are the future priorities for JLD and MB Legal Consultancy?
Our short to medium term plan is to build on other specialist areas of practice such as financial technology and payment systems, tax law and corporate business services. JLD & MB has over the last 24 years established itself as one of the leading law firms in Ghana, advising and representing some of the top global and local companies in their investment and commercial ventures in the country and we aspire to continue on this upward journey. We also intend the deepen our collaborations with our international partners and global law firms with the view to extending our footprint globally.