"Mining Sector: Dividend payments to gov’t increase to GHS 224m in 2020"

" \n Mining Sector: Dividend payments to gov't increase to GHS 224m in 2020 \n \n\n \n The 2020 State Ownership Report has revealed that the mining sector paid some GHS 224.77 million as dividends to the government in 2020. \n \n\n \n This contributed hugely to the GHS 275.48 million dividend paid by the State Owned Enterprises to the government in 2020. \n \n\n \n The enhanced dividend payment was mainly fueled by the increase in the Minority Interests portfolio contribution particularly the mining sector which paid GHS 224.77 million in 2020 as compared\u00a0 to GHS 38.48 million in 2019. \n \n\n \n The GHS 275.48 million dividend represents a shortfall of GHS 15.46 million compared to the target, but far higher than the dividend paid in 2019. \n \n\n \n Dividends paid in 2020 represented an increase of 164.96 percent, about GHS 171.51 million, over that of 2019. \n \n\n \n Newmont Ghana Gold, Kinross Chirano Mining and Goldfields Ghana Limited (Tarkwa), were the major contributors to the dividend receipt from the mining sector. \n \n\n \n In addition, GHACEM increased its contribution from GHS 7.30 million in 2019 to GHS 27.66 million in 2020. Approximately 92.61% of dividends receipts for 2020 were from the minority interests. \n \n\n \n Ghana Reinsurance Limited was the only State Owned Enterprises that paid dividend to government. \n \n\n \n For the JVCs, GCB Bank and Ghana Women\u2019s Fund Company Limited paid dividend to government. \n \n\n \n Further analysis indicates that State Owned Enterprises and Joint Venture Companies recorded 37.5% and 73.18% decline in dividend payments. \n \n\n \n Meanwhile, aggregate revenue outturn from State Owned Enterprises (SOEs) to government for the 2020 review period amounted to GHS 45.23bn. \n \n\n \n Per the 2020 State Ownership Report by the Ministry of Finance, the GHS 45.23bn revenue recorded by SOEs for 2020, marks a revenue increment of 20 percentage points when compared to the 2019\u2019s revenue performance of GHS 37.91bn. \n \n\n \n In terms revenue losses, SOEs recorded some GHS 2.61bn losses in the year under review. \n \n\n \n Read: Banking Survey: Ecobank\u00a0trails behind GCB in brand equity metric for 2021 \n \n\n \n The recorded loses for 2020 represents a 49.2 percent improvement on the 2019 aggregate net loss of GHS 5.16bn. \n \n\n \n Joint Venture Capital (JVCs) on the other hand, achieved an aggregate net profit of GHS 11.81 million as compared to an amount of GHS 1.05 billion recorded in 2019 representing a significant decline. \n \n\n \n According to the report, the devastating impact of the COVID-19 pandemic tended to disproportionately affect JVCs and severely hampered their revenue-generating ability. \n \n\n \n Government\u2019s Minority Interests in mining firms resulted in an aggregate net profit of GHS 11.25 billion in 2020 as against a net loss of GHS 62.17 million for 2019. \n \n\n \n Touching on the adverse impact of the Covid pandemic on State Enterprises, the Finance Ministry in the report noted that decisive and bold measures were taken to support businesses in both the private and public sector with government providing payroll support of GHS 127.5 million for the worst affected SOEs, JVCs and tertiary institutions whose operations were severely impacted by the closure of our borders and the imposition of movement restrictions. \n \n\n \n Adding that, given the impact of the pandemic, expectations on the performance of State Enterprises had to be recalibrated. \n \n\n \n \u201cThe Bank of Ghana also announced complementary measures to support businesses. Against these developments, expectations on performance of SEs have to be recalibrated. That said, and as we seek economic recovery to build forward better, it is crucial to emphasize that the practice where loss-making SEs continuously increase operating expenses (OPEX) through personnel and wage increases must give way to sound business management practices. All SEs, including almost the third of Other State Entities (OSEs) that recorded deficits, must reimagine their business models and strive for prudent financial management and operate within budget,\u201d\u00a0 added the report. \n "

"Mining Sector: Dividend payments to gov’t increase to GHS 224m in 2020"

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