Business News Sat, 1 Feb 2003

Ghana Loses ?39bn through teak exporting syndicates

INVESTIGATIONS CONDUCTED by Chronicle indicate that a teak-exporting syndicate is milking the nation of some billions of cedis. It has emerged that between the year 2001 and last year, an estimated amount of $4.8 million about (?39 billion) was lost through the activities of the syndicate to the nation's economy.

The loss arose from under-invoicing, manipulating of letters of credit, exportation of teak logs instead of lumber, unmanifested teak lumber at the harbour, etc.

Even though there is a law that debars foreigners from going dabling in the nation's teak industry, by as buyers and at the same time processors, the law has been grossly violated.

To add salt to injury, most of the syndicates are operated by mainly foreigners from the Far-Eastern countries who over the years have succeeded in outwitting the local teak suppliers after the goods had been delivered to them at the port.

These syndicates, over the years, have enjoyed a field day because such institutions as the Forestry Commission, Forest Products Inspection Bureau (FPIB) and the Ministry of Lands and Forestry, which are supposed to check these reckless 'investors', have gone to sleep, Chronicle has gathered.

In June last year, when Chronicle approached the Forestry Ministry, to find out steps it was taking to halt the dissipation of the nation's resources through these fraudulent transactions, Mr. Thomas Broni, the deputy Minister of Lands and Forestry, pleaded with Chronicle to give him time to deal with the perpetrators.


Out of trust Chronicle even dropped some information it was privy to, but after almost a year now things have still not changed as the nation continues to lose billions of cedis each passing month.

All attempts by this reporter to speak to the deputy minister this time round has proved futile.

Even though we have been to the ministry on a number of occasions and followed up with several calls, as at the time of going to the press yester-night the minister had not returned our calls.

Chronicle can report that in 2001 about 18,000 cubic metres of teak lumber was sold to the Far-Eastern traders, mostly Indians.

Out of this figure, 6,000 cubic metres were provided to them by illegal teak suppliers who sold at a ridiculous price of $243 per cubic metre instead of an approved price of $358 per cubic meter. This means that $115 went into the drain from each cubic metre delivered.

At the end of the transaction, over $690,000 had been squeezed from the economy, while the remaining 12,000 cubic metres exported directly by local teak dealers suffered a similar fate of underpricing.


In fact, they were underpriced by $140 per a cubic metre and this brought the figure to $1,680,000 as a result of the late alteration of letters of credit that were persistently introduced at the payment stage, contrary to an approved contractual agreement with the local dealers, it has gathered.

At the end of year 2001, an amount of $2.4 million whad been lost to the economy through these malpractices.

And last year, the trend persisted shooting the total figure to about $4.8 million (about ?39.2 billion). "This strategy has remained a tool by these reckless buyers to outwit the local exporters and in so doing end up defrauding the nation of an expected tax component from an approved contract, an analyst told the Chronicle.

Through surveillance on some local teak exporters, a number of teak logs instead of lumber which were at the verge of being exported were intercepted late last year.

We are monitoring and still studying a number of questionable letters of credit used to out-do the nation and the local teak exporters.

Source: Ghanaian Chronicle