In yesterday’s editorial, this paper highlighted the immense damage gold smuggling does to the economy and recommended that to address the distortion caused by illegal mining, Ghana needs to strengthen regulatory frameworks and enforcement mechanisms.
Ghana loses approximately US$2billion annually in tax revenue due to smuggling and illegal gold operations.
Which is why we are pleased to learn that under the proposed GoldBod framework, only a single state-backed entity will have the authority to export gold from Ghana.
Elaborating further, Mr. Sammy Gyamfi, acting Managing Director-Precious Minerals Marketing Company (PMMC), noted that the unregulated nature of Ghana’s gold exports has led to significant losses in foreign exchange, contributing to depreciation of the cedi.
According to him, multiple exporters – including private firms licenced by the Ministry of Lands and Natural Resources – compete with institutions like the Precious Minerals Marketing Company and Bank of Ghana.
This has created a scenario where many of these exporters either fold-up or resort to smuggling due to unfavourable market conditions. Indeed, the smuggling of gold has worsened Ghana’s forex crisis – making it difficult for businesses to access dollars and thereby increasing the cost of imports and raising inflation.
The GoldBod initiative will therefore centralise all gold exports under one entity, ensuring that forex earnings from gold sales are immediately repatriated to stabilise the cedi. Under the current system, private exporters are required to repatriate only 80 per cent of their forex earnings within 30 days – but many do not comply.
However, the GoldBod will ensure that once gold is exported, 90 percent of the earnings will be credited to Bank of Ghana the same day, with the remaining balance arriving within 48 hours.
So far, though, the regulation of artisanal and small scale mining in Ghana has been mostly unsuccessful. More than 85 percent of small-scale mining operations still occur in the informal and/or illegal sectors of the economy and remain largely unregulated.
To effectively manage and control the activities of artisanal and small-scale mining, these factors must be considered.
