CMB model could help cut US$4-5 billion illicit financial flow in gold sector – Ofori-Atta

Finance Minister-designate Ken Ofori-Atta has proposed that Ghana consider applying the Cocoa Marketing Board model of buying and exporting cocoa to the gold industry so as to stop the estimated $4-$5 billion Ghana loses each year as a result of illicit financial flows in the mining sector.

Answering a question before Parliament’s Appointments Committee about how to stop the illicit financial flow in the gold sector, Mr Ofori-Atta said: “The issue of illicit financial flows is, maybe, $50 billion, $70 billion for Africa and, therefore, in our view, it might be easily $4 billion, $5 billion in all sorts of ways”.

For Ghana, he said, “we need to put things into place to do that”.

Firstly, the former Finance Minister said “you have a small sort of gold-mining area, in which we need to tighten exactly how the gold is procured and how it is taken out”.

In his view, the CMB model comes in handy.

“So, if you look at the example of Cocobod’s structure; should we be looking at something similar to the small-scale gold industry so that we fund our capacity to be able to buy all the gold and, therefore, be responsible for export and to cut out that because it is alleged that the amount of gold that, let’s say, Dubai or India record from Ghana, is very different from our export”, he told the committee.

And, so, he added, “maybe the Cocoa Marketing Board model will be an interesting one to pursue to cut out that”.

Concerning the big mining companies, Mr Ofori-Atta suggested “ensuring that the assaying, etc., is witnessed and we know, exactly, the purity that is taken”.

He said: “If you look at, let’s say, the manganese industry where currently they tell us the purity, they tell us the price that they earn and then they also tell us the weight that goes on, those are all not verifiable and, therefore, we need to put in place structures and to be able to determine that”.

“I think those kinds of interventions, when put in place, will make us realise the values that we deserve”, he noted.

According to him, “These have gone on for numbers of years. We’ve experimented with all sorts of undercover agents, etc., and I think we should be ready to come up with new policies in this area”.