Business News Wed, 27 Sep 2017

BoG, PMMC unable to trace companies in $2.3bn gold export

The Bank of Ghana (BoG) and the Precious Minerals Marketing Company (PMMC) have been so far unable to trace most of the companies involved in the 2016 export of $2.3 billion worth of gold that did not say result in the repatriation of foreign currency.

The PMMC is mandated to oversee the export of gold from the small-scale mining sector and the law requires at least 80 percent of foreign currency earned from exports to be repatriated back into the country.

The company’s operations cut across buying, selling, grading, valuing, and processing of precious minerals to include appointing licensed buyers for the purchase of minerals mined by small-scale miners.

Speaking on the Citi Breakfast Show, the Managing Director the of the PMMC, Kojo Opare Hammond, said lost revenue on the exported gold came to the attention of the BoG when it complained that an alarming amount of gold was shipped in 2016.

Upon checks in the PMMC’s records, it was discovered that “none of the companies that shipped gold through PMMC returned the money into the country,” Mr. Opare Hammond stated.

There are about 145 companies in question, according to the PMMC Managing Director, and the BoG was asked to look into the companies’ banking details, “but it looks like up till now, they have not even been able to trace the bank accounts of some of these companies.”

It was at a meeting with Minister of Finance that the Criminal Investigations Department of the Ghana Police Service was directed to begin investigations into the issue.

Amidst all this, the PMMC was noted as one of the five 18 state-owned enterprises that made losses in 2016.

The company recorded consistent losses throughout the period, making it impossible for them to pay dividends or surplus to the Government, according to the 2016 Annual Aggregate report on State Owned Enterprises.

Its revenue was on a steady decline, significantly by 83% from GHc136 million to GHc23 million in 2016.

Possible negligence from previous administration

The PMMC is to ensure the foreign exchange is repatriated following the export, but Mr. Opare Hammond says “it looks like on our part, we were not taking this as a serious thing and all we kept doing was just shipping the gold.”

“What is making it alarming is that in one year, that amount of Gold was shipped through of PMMC alone” he noted further, as an indication that the losses extend beyond 2016.

“There is no record to indicate that [any money was returned]. In fact, the Bank of Ghana is still on us asking for more information that will help them to even find out where these companies are so that at least they can ask them to come and pay what they were supposed to pay but didn’t come back. Unfortunately, many of them have not been traced.”

These companies are supposed to be owned by Ghanaians “but a lot of them probably had some foreigners behind them in doing this,” he said.

BoG upset

The BoG has since suspended the PMMC from shipping gold out of the country. Mr. Opare Hammond said the BoG was “really upset with this situation we came to find in the PMMC… as we speak now, the PMMC cannot export gold from what happened previously.”

Most of Ghana’s gold export go to the United Arab Emirates and India, with Israel and Switzerland also serving destination for Ghana’s gold, on a smaller level.

Suspected smuggling

As far as the exports are concerned, Mr. Opare Hammond said he suspected a great deal of smuggling in the sector and the PMMC is looking at the security agencies to help it stem the tide.

“We suspect there is a lot of smuggling of Gold out of this country and that is one of the things we want to do as a new management. We want the collaboration of the security agencies to ensure that no gold leaves this country without passing through the appropriate channel,”

“There are a lot of foreigners who are not supposed to be part of the small-scale sector when it comes to gold but we are told that many of them have found themselves right in the towns where we do mining… You go to the field that and we are told that quite a number of them go hiding in all kinds of places and u gold from the galamseyers as well as some of the small-scale operators.”

Source: citifmonline.com