PMMC saddled with GH₵65.5m debt--Calls for relief from govt

The Precious Mineral Marketing Company (PMMC) is saddled with a GH₵65.5 million legacy debt, with interest compounding on the debt each month.

This has made it difficult for the company to effectively operate and declare dividends to the government.

Although the PMMC itself has put in place some internal measures to retire the debts, the management has still made an appeal through its sector minister for some relief from the government to enable it to pay the debt.

The Managing Director of PMMC, Nana Akwasi Awuah, disclosed this in an interview with the Graphic Business.

He said although the company had been able to effectively discharge its mandate over the years, certain challenges have plunged it into huge debts.

“But for the debt situation, the company would have been a very profitable one, paying huge dividends to the government. This is why we have continued to appeal to government to assist and we are aware that work is ongoing on that.”

“The Ministry of Finance continues to engage with us on the best arrangement to deal with that legacy debt,” he stated.

Legacy debt

Nana Akwasi Awuah noted that the debt was a legacy one inherited in 2017.

“At the time it was inherited, it was about GH₵30 million, with the dollar component of about US$4 million. For the dollar component, it has been completely paid off but the cedi component continues to grow because of interest.”

“For the dollar component, we managed to negotiate with the creditors that they should not litigate and interest should be frozen on the debt amount and therefore we managed to come up with a payment plan and paid that off. The cedi component continues to be a challenge because these are debts being held by banks, some of which have been taken over by the receiver,” he explained.

Internal measures

Commenting on what the company was doing on its own part to deal with the deb, he said it was creating new revenue streams to raise enough revenues to deal with it.

“We have come up with the vault services where we are offering to the general public the opportunity of storing their items of precious value with us here at a fee, fully insured.

“Beyond that too, we are exploring strategic partnership such as the one we have with Manhyia concerning the Otumfuo commemorative gold coin. We will continue to seek new revenue streams in order to keep us afloat to be able to meet our monthly obligations,” he stated.

2021 performance

The managing director pointed out that the country’s gold export figures were low as compared to figures from previous years.

He said that was due to the introduction of the three per cent withholding tax policy which he believed encouraged gold smuggling.

He said the PMMC has, however, managed to convince the government through data that it compiled since the tax was implemented.

“We went to government through our sector minister and we were able to demonstrate that the tax was a contributory factor to the declining figures in gold export. Thankfully, government listened to us and the tax was reduced to 1.5 per cent, effective January 1, 2022,” he stated.

He said since January 1 when the new reduced tax took effect, the PMMC was gradually seeing an increase in gold export figures which was encouraging

Gold smuggling

On how to address the gold smuggling menace, he said the PMMC sought to do this through two angles.

One is through the tax angle which had already been done and also tackle it from the operational angle.

“Last year, the Ministry of Lands and natural Resources launched the gold smuggling task force and we have had two meetings so far.

“We intend to operationalise certain things to be able to go after those who are known to be smugglers,” he said.

Way forward

On the way forward, he said the PMMC intended to complete the construction of its gold refinery this year.

When completed, he said that would add an additional source of income for the company.

He said the company would also embark on an aggressive marketing for its vault services and jewellery manufacturing.

“The prospects look good and we will continue to put our shoulders to the wheel to ensure we are able to deal with the issues of the legacy debt as well,” he said.