ISSER’s $3.8bn gold exports undervaluation erroneous – Chamber of Mines
The Ghana Chamber of Mines has reacted to a study on gold exports undervaluation by the Institute of Statistical, Social and Economic Research (ISSER).
The study undertaken and published in January this year, estimated that gold exports are undervalued between $3.8 billion and $8.3 billion.
According to ISSER, Ghana’s gold exports from 2011 to 2017, established that the undervaluation of exports was equivalent to 11% of the total gold exported within the period.
In addition to that, some $957.3m in taxes were lost by the State.
Dr Fred Dzanku, a member of the research team, made the assertion during a workshop themed, “Curbing Commodity Trade-Related Illicit Financial Flows: Policy Options for Ghana.”
But in a recent rejoinder to the assertions made by ISSER, the Ghana Chamber of Mines averred the undervaluation of gold exports by ISSER, was due to the group’s usage of “interim export values” which tend to over state the volume of gold sold.
Additionally, the methodology employed by ISSER, excluded the impact of the refinery process on the quantum of gold recovered and sold.
Touching on the taxes lost by the State in ISSER’s study, the Chamber noted that, ISSER’s study overlooked the tax deductibility of royalty payments and operating costs of mining firms in determining income of mining companies.
“Trade mispricing risks identified in the study are not supported by extant practices in the large-scale segment of the gold mining industry. The Chamber, therefore, suggests that the rigour and reliability of the study’s findings could be improved by deriving the actual export price from published data on mineral revenue and mineral produced and comparing the derived price with the international market price at the relevant period.
“Alternatively, a micro-level study that compares the price paid for each consignment of refined gold with the prevailing price on the international market would be a realistic proxy for the risk of trade mispricing,” added the Chamber.
Read details of rejoinder below:
ISSER Research Response by Fuaad Dodoo on Scribd
