Sammy Gyamfi, the Acting Managing Director of the Precious Minerals Marketing Company (PMMC), has called for a more structured and regulated framework for Ghana’s gold trade to be implemented in a bid to stabilize the economy.
Gyamfi criticized the current gold trading system, highlighting its flaws which he believes are hindering Ghana from reaping the full benefits of its gold exports. He emphasized the necessity of ensuring that the country receives the entirety of its gold export revenues.
The existing setup, which permits over seventy licensed exporters to operate independently under the Ministry of Lands and Natural Resources, has created an uneven playing field within the market, Gyamfi noted.
The multitude of buyers in the market, including entities like PMMC, the Bank of Ghana, and private firms, has led to stiff competition among legal exporters, pushing many to consider smuggling as a means of trade.
This, Gyamfi pointed out, has contributed to a reduction in foreign exchange coming into the country, leading to a depreciation of the cedi. He noted that the scarcity of dollars for imports due to official channels’ constraints prompts businesses to resort to the black market, causing a surge in exchange rates and exacerbating inflation.
Proposed Centralized System:
Supporting President Mahama’s proposal for a centralized gold export system under a newly established entity, the Gold Board (GoldBod), Gyamfi stressed that limiting gold exports to this single body would ensure all foreign exchange earnings return to Ghana.
He recommended that the Gold Board be assigned responsibilities such as licensing agents, managing gold purchases, and overseeing all export transactions, effectively consolidating control within one entity.
Gyamfi argued that by channeling all gold exports through the Gold Board, Ghana could bolster its foreign exchange reserves, strengthen the cedi, and stabilize the national economy.
Combatting Gold Smuggling:
Gyamfi underlined the pressing need for enhanced enforcement mechanisms to combat gold smuggling, criticizing the lack of significant efforts to curb this illegal practice.
To address this, he proposed empowering the Gold Board with new enforcement capabilities, allowing inspectors to undertake actions akin to those of police officers. This includes conducting searches, demanding documentation, and seizing gold involved in illegal transactions.
Collaboration with Security Agencies:
Beyond the Gold Board’s enforcement efforts, Gyamfi revealed plans to establish a specialized task force in collaboration with the Ministry of National Security, the Ministry of the Interior, and the Ministry of Defense to target gold smuggling syndicates.
He expressed confidence in identifying smuggling routes and individuals involved, anticipating a crackdown on smugglers once the proposed legislation is approved.
Gyamfi acknowledged that eradicating smuggling entirely may be challenging but believed that stringent enforcement measures and regulatory frameworks would act as a deterrent, reducing the scale of illegal gold exports significantly.
Highlighting the importance of maximizing gold revenues for the nation’s economic well-being, Gyamfi stressed that strict regulations and law enforcement would optimize foreign exchange earnings, stabilize the cedi, and alleviate economic pressures on the population.