The Acting Managing Director of the Precious Minerals Marketing Company (PMMC), Sammy Gyamfi, has stated that while gold smuggling cannot be entirely eliminated, the right policies and systems can significantly reduce it.
“No one can totally eliminate smuggling. It is like any other crime, you can’t eliminate crime. But with the right systems and policies, you can mitigate it and reduce it to the barest minimum. That is what the Gold Board will do,” he said.
He emphasised that one key measure to tackle smuggling is ensuring that the government has sufficient funds to buy gold from small-scale miners.
“If the government says the Gold Board is responsible for buying all the gold from small-scale miners, but it doesn’t have enough money to do so, the miner has no choice. When he mines the gold, he wants his money because most of them are financed by others. He needs to pay for his equipment, so he will sell to whoever has money,” Mr Gyamfi explained.
To address this, he highlighted that, for the first time, the Ministry of Finance has allocated seed money to a state agency to buy gold. “If the government wants to buy gold so that smugglers don’t get it, then there must be enough liquidity to mop up all the gold produced by small-scale miners,” he said.
Another major factor is taxation and pricing policies. If export taxes are too high or the buying price for gold is not competitive, miners will turn to smugglers who offer better prices. “When the price at which you are buying the gold from the miners is not fair or reasonable, they will sell to smugglers. Because smugglers will offer them better prices,” he stated.
Comparing the cocoa industry, he noted that smuggling rises when neighbouring Côte d’Ivoire offers a better price than Ghana’s COCOBOD. “Anytime Côte d’Ivoire has a better price than COCOBOD in Ghana, you will see smuggling increase. Anytime Ghana has a better price, you will see even cocoa coming from Côte d’Ivoire to Ghana,” he explained.
While ensuring fairness in pricing, Mr. Gyamfi also cautioned that the Gold Board cannot buy gold at any price. “At the end of the day, we must ensure we don’t waste taxpayers’ money. Even though our focus is not profit but forex, we have to buy at a reasonable discount. However, we must involve all stakeholders in setting that discount to ensure fairness,” he noted.
He acknowledged that despite all measures, some level of smuggling will still occur.
“Even if you remove all the incentives for smuggling, people will still smuggle. Gold is a commodity used in money laundering and for settling smuggled goods,” he said.
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