Ghana’s new gold program faces challenges from illegal trade
The Precious Minerals Marketing Company (PMMC), a key player in Ghana’s gold industry, has warned that the activities of gold smugglers pose a significant threat to the success of the country’s “gold for oil” exchange program.
The program, which aims to accumulate domestically mined gold in exchange for finished petroleum products, is intended to address currency depreciation. However, PMMC, a state-owned company, believes that the activities of gold establishments, if not checked, could undermine the program’s effectiveness.
“We note that a major threat to successful implementation of the program is the activities of establishments,” PMMC said in a statement. “Consequently, the security agencies have been engaged to intensify anti-smuggling operations.”
Last year, PMMC reported that Ghana had lost as much as 90% of foreign capital from gold proceeds due to unauthorised and illegal export of the precious yellow metal.
The sector ministry also admitted that analyses of gold export trade data between Ghana and its major trading partner-nations in 2019 showed that at least $9 billion of expected gold receipts remain unaccounted for.
To address the situation, PMMC is working with the Minerals Commission and security agencies, including the anti-gold smuggling taskforce, to minimize losses and establish offices across the nation as collection points for gold to be used in the program.
“All existing gold trading and export licence holders – implementing partners – shall continue their usual business activities except that the gold so purchased by them from the small-scale sector shall not be exported. The gold purchased by the implementing partners shall be sold to PMMC,” the statement read in part.
“For purposes of implementation, persons who wish to sell to PMMC shall be required to deliver their gold in whole bars of 5kg at any of the PMMC Offices – either at Patasi, Kumasi or Diamond House, Accra – where the bars will be assayed and payment effected on the spot. Any other trader with gold below 5kg shall be required to sell to any of the implementing partners,” it continued.
The company added that licence holders that already have contracts in place to provide gold outside the country must write to it and provide proof of those commitments: upon which PMMC will work with those businesses to ensure that their commitments are fully met.
Already, the first consignment of oil under the policy – aimed at reducing the country’s fast-depleting foreign reserves position, especially in the current erratic market – has arrived in the country.
