Ghana is suffering a renewed spate of gold smuggling shipment which is sparking concerns about how the syndicate is hurting the economy in revenues to the state and the crippling the state owned Precious Minerals Marketing Company (PMMC).
Concerns about gold receipts to the country have further heightened following the detection and seizure of a large amount of gold bullion meant for export without declaration and proper documentation.
According to Customs officials, exporting gold without any documentation is a daily occurrence at the Kotoka International Airport; and most licensed gold exporters in the country are engaged in such activities to avoid paying appropriate taxes.
The Customs Division of the Ghana Revenue Authority (GRA), acting on a tip-off last week, impounded 12 boxes which contained gold bullion weighing about 480kg at the Kotoka International Airport -- valued at US$18million.
The seized bullion belonged to two Indian firms and three Ghanaian companies, and was abound for Asia and the Middle East – particularly India and Dubai.
In the last two years alone, more than US$3.6 billion worth of gold has been smuggled to India causing the country to lose about US$360 million in tax revenues to the state, according to Statistics from Zauba Technologies and Data Services of India.
The worry is that the state loses a lot of revenue to gold smuggling because some gold dealers have developed ways to bypass laid down procedures in selling gold outside Ghana in order to evade taxes.
There are some 300 licensed gold trading houses in the country, but only about 10 buy from the PMMC for export, which denies the state agency of the badly needed revenue in terms of commission payment.
These are indeed tough times for the gold industry and allowing a smuggling syndicate to dictate the market spells doom for the economy.
This is because, despite the discovery of oil and gas and the firming up of both cocoa prices and its production, mining remains easily the country’s biggest foreign exchange earner, generating US$5,643.3 million in 2012; this roughly matching the combined contributions of cocoa and of oil and gas put together.
This means if gold prices continue to fall, it knocks off commensurate 25 per cent fall in export earnings from gold sales, could cost the nation some US$1.2 million in foreign exchange revenues.
This could not have come at a worse time. In 2012 Ghana incurred unsustainably high fiscal and trade deficits.
The trade balance deteriorated significantly last year as well, resulting in a current account deficit of US$4,921.5 million, translating into 12.3 per cent of GDP.
It is for this reason that the Graphic Business calls on the authorities to tighten security at the points of entry and curb the menace of smuggling in order to derive the maximum revenue to the state.
The papers also urge the Ministry of Lands and Natural Resources to strengthen the PMMC by reversing it earlier regulations to ensure that all licensed gold buying companies secure the necessary documentations from the PMMC in order to remain relevant and raise the badly needed revenue for the state.