MIIF delivers GH¢1.1 billion profit despite 98% royalty share cut - The Herald ghana

The Minerals Income Investment Fund (MIIF) has presented its 2025 audited financial statements as evidence of its resilience and prudent financial management, arguing that the Fund's GH¢1.1 billion profit should be assessed in light of sweeping legislative changes that significantly reduced its statutory revenue. The state-owned sovereign wealth fund, established to manage Ghana's mineral wealth through royalty collection and strategic investments, recently published its audited accounts for the 2025 financial year, reporting a profit of GH¢1.1 billion. Although the figure is lower than the GH¢1.87 billion recorded in 2024, the Fund contends that a direct year-on-year comparison fails to capture the fundamentally different financial environment in which it operated during the period under review. The Fund noted that following the passage of the Minerals Income Investment Fund (Amendment) Act, 2025 (Act 1137), its share of mineral royalties was reduced dramatically from 77.6 per cent in 2024 to just two per cent in 2025.

Its entitlement to dividends from the State's free-carried interests in mining companies was also substantially reduced. According to the Fund, the legislative changes effectively required it to operate with significantly reduced guaranteed revenue while maintaining its mandate of safeguarding the State's mineral wealth. Against that backdrop, MIIF argued that maintaining a profit of more than GH¢1.1 billion demonstrated strong financial discipline rather than declining performance. The audited accounts further show that total mineral royalty collections increased from approximately GH¢4.9 billion in 2024 to GH¢5.4 billion in 2025, despite the Fund retaining only a fraction of those collections.

The increase, according to the Fund, reflects strengthened royalty mobilization, improved compliance and continued protection of the State's interests in the extractive sector. Beyond profitability, the Fund's balance sheet also recorded notable improvements. Retained earnings grew by nearly 35 per cent, while the equity-to-assets ratio improved from 27 per cent to 43 per cent, strengthening the institution's capital base. Current liabilities declined by about 37 per cent, with trade and other payables falling by more than 91 per cent, signalling tighter financial discipline and improved capital management.

Financial analysts generally regard such indicators as measures of an institution's financial health and resilience, suggesting that MIIF emerged stronger despite operating under significantly constrained financial conditions. The Fund, however, expressed concern that public commentary surrounding its financial performance had focused largely on the decline in headline profit without taking into account the legislative reforms that fundamentally altered its operating model. It argued that judging the 2025 performance solely against the previous year's earnings ignored the substantial reduction in guaranteed statutory income. The Fund also pointed to several investments initiated under the previous administration that continue to weigh on its financial performance.

Among them is an investment in Asante Gold Corporation, acquired at a cost of GH¢361.85 million but valued at GH¢209.28 million at the end of the first half of 2026, representing a potential unrealized loss of GH¢152.57 million. Similarly, MIIF disclosed that its GH¢360 million preference share investment in Electrochem Ghana Limited had generated paper gains of GH¢158 million, although those gains remain unrealized due to the company's financial difficulties and prolonged operational inactivity since the beginning of 2025. The Fund also reported that nearly one-third of its GH¢62.27 million investment in Atlantic Lithium Limited had been eroded by the end of June 2026. It added that the proposed acquisition of the company by a Chinese producer could result in a realized loss of approximately 16 per cent, equivalent to GH¢13.1 million.

Another significant challenge identified by the Fund relates to the Gold Trade Programme, which was discontinued in April 2025 following the establishment of GoldBod. According to MIIF, approximately GH¢1.7 billion remains outstanding from aggregators under the programme, with efforts continuing to recover the funds. The Fund stressed that while long-term investments often require time to mature, they should ultimately be assessed on realized value creation, profitability and measurable returns rather than projected expectations. It also defended the review of inherited investment projects, arguing that responsible public financial management requires periodic reassessment of investment portfolios to ensure scarce public resources are allocated efficiently.

According to MIIF, maintaining and improving royalty collections despite a substantially reduced retention formula demonstrates operational continuity and effective governance rather than institutional disruption. The Fund maintained that its 2025 audited financial statements show an institution that successfully adapted to one of the most significant reductions in statutory revenue since its establishment. It said the combination of higher royalty collections, sustained profitability, stronger capitalization, reduced liabilities and an improved balance sheet reflected an organization that had preserved its financial integrity despite operating under far more challenging conditions. The Fund believes that, viewed within its proper legal and financial context, the 2025 results represent a significant demonstration of resilience and prudent stewardship of Ghana's mineral wealth.