(a) The Minerals Income Investment Fund (MIIF or the Fund) Investment Risk Management and Liquidity Policy (IRMLP or the Policy) is primarily aimed at providing controls for risk minimization in the investment operations of the Fund and ensuring that investable funds are sufficiently available to meet the cash flow needs of the Investment Department on a timely basis. The assumption of risk by the Fund is designed in line with the Minerals Income Investment Fund Act, 2018 (Act 978), as amended (MIIF Act) and the Investment Policy and Guidelines (IPG), which provide a framework and procedures for the investment activities of the Fund.
(b) Investment risk management at MIIF, is largely a shared responsibility of the Board, Risk Management Committee (RMC), Investment Advisory Committee and Management. Matters in relation to risk is collectively reviewed to provide effective guidance for risk reduction and mitigation, if not complete prevention with reference to capital preservation and returns on investment in the short, medium to long term.
(c) One of MIIF’s flagship goals is to provide capital, capacity building and an enabling environment for growth and innovation in the Ghanaian mining sector by undertaking short to long term investments. Risks associated with the Fund’s investments must therefore be effectively identified, assessed, measured, monitored, evaluated and reported on regular basis to stakeholders, mainly the Board and the Ministry of Finance.
(d) The Fund’s risk appetite framework in this Policy sets out the general principles for the management of risks, covering notably, credit risk, market risk, liquidity risk, operational risk, climate and environmental risk, portfolio risk, reputational risk and compliance risk.
(e) MIIF has also adopted Environmental, Social and Governance Policy (ESG) guidelines with the goal of ensuring that the Fund’s actions meet environmental sustainability guidelines and are predictable, transparent and accountable in its quest to optimize returns. The ESG Policy ensures that projects and investments undertaken by the Fund promotes sustainable developments in line with best practices locally and internationally.
(f) Ensuring long term stable earnings from the MIIF capital base (mineral royalties and dividends) is highly prioritized by the Fund. A strong capital base helps build buffers to absorb probable losses and unforeseen risks. The Board and Management of MIIF believe that the fundamental element of ensuring good governance is to have a sound framework of risk assessment and internal controls. The fundamental premise of this Policy is to achieve this.