Gold Mafia: $40m of Ghana’s gold is washed every month through money laundering

Gold has been mined in Ghana for over 100 years. But communities in Ghana where the gold is mined are spectacular examples of the country’s poverty index. Littered with poor road networks, inadequate infrastructure and chronic unemployment for local people, particularly the youth, the country has very little to show for its precious metals.

Yesterday March 23, 2023, the Investigative Unit of Al Jazeera broadcast the first episode of a four-part investigation into gold smuggling in Africa titled Gold Mafia. While the first episode focuses on southern Africa, particularly Zimbabwe, Ghana popped up.

One of the main characters, one Alistair Mathias, told undercover journalists posing as Chinese criminals that he is able to smuggle $40 million worth of gold out of Ghana every month, and that is only one smuggler, and there are many of them.

The activities of gold smugglers are well known in Ghana. But there is little known about effective state action to curb them. Occasional arrests of suspected gold smugglers happen at the Kotoka International Airport but generate very little interest among the population and the conclusions of most of the cases in court are not well covered by the media.

There is however evidence that Ghana is losing billions of dollars from gold smuggling. Added to that, the activities of illegal miners, known as galamsey have polluted water bodies and destroyed farmlands across the country.

In a 2017 article, Ghana Business News cited the then Minister of Lands and Natural Resources saying, an estimated $2.3 billion worth of illegally-mined gold left Ghana in 2016, while Ghana earned $3.2 billion from official gold exports in 2015.

In that article, Channing May of the Global Financial Integrity (GFI) told ghanabusinessnews.com by email that, “Because illegal mining is unregulated, it is difficult to determine how much it generates, particularly from illegal Chinese miners. Minister John Peter Amewu recently estimated stated that $2.3 billion of illegally-mined gold left Ghana in 2016, which is a significant amount considering that approximately $3.2 billion of gold was officially exported from Ghana in 2015. This would suggest that illicit small-scale mining (galamsey) represents more than 70 percent of all gold production in Ghana. Even if, for example, illegal Chinese miners were responsible for only 10 percent of the illegal mining in Ghana, that would still be worth $230 million.”

Last year at a public forum organised by the Media Foundation for West Africa to discuss illicit financial flows, Mr. Abdulai Bashiru Dapilah, Head of Organized Crime and member of the illicit financial flows unit of the Ministry of Finance, who also gave the keynote address, indicated that investigations conducted by the Economic and Organised Crime Office (EOCO) on eight gold exporting companies in Ghana for the period 2019 to 2021 found a total of over $ 1.1 billion illicitly flowed out.

An investigation by Ghana Business News, part of the global FinCEN Files, by the ICIJ found that five Ghana gold exporters, some of them with no identifiable office locations contributed to Kaloti of Dubai’s $2.8 billion gold deals.

Ghana’s economy is in crisis. The public debt has exceeded sustainable levels, and the country has defaulted on its debts, with no one willing to lend to the country, the government has been forced to eat back its words and pride, after claiming it won’t ever go to the International Monetary Fund (IMF), it is now back on its knees, begging the IMF and urging other international partners to intercede on its behalf to get a $3 billion extended credit facility.

While at it, the country, as the Al Jazeera investigation, shows, and according to allegations by the former Minister of the Environment, Prof Kwabena Frimpong-Boateng government officials are conniving with smugglers and illegal miners to steal the country’s gold.