By Anthony Obeng Afrane.
Ghana, renowned for its gold reserves, has long struggled with the insidious problem of gold smuggling. The scale of this illicit trade is staggering, representing a significant drain on the nation’s economy and hindering its development. The ramifications extend far beyond the immediate loss of revenue, impacting everything from foreign exchange reserves to the ability of state-owned enterprises to function effectively.
A single incident in 2015 starkly illustrates the magnitude of the issue. An attempted smuggling operation at Kotoka International Airport was intercepted, revealing 48 kilograms of gold valued at a then-astounding $18 million. This single seizure, however, likely represented just the tip of the iceberg. The arrest of only one smuggler suggests a far larger, sophisticated network operating daily. If we assume this 48kg daily smuggling rate – and it is likely far higher – the annual value of smuggled gold in 2015, at prevailing prices, would reach a breathtaking $6.57 billion annually.
The financial losses extend beyond the sheer value of the gold. At the time, the Precious Minerals Marketing Company (PMMC) levied a 0.01% commission and a 0.02% tax on gold exports. Had this 48kg daily haul been channeled through PMMC, the government would have collected approximately $197 million – a sum substantial enough to significantly ease the financial constraints faced by the PMMC itself, which at that time struggled to pay its workers.
Furthermore, the smuggling of gold deprives Ghana of crucial foreign exchange earnings. This illicit outflow exacerbates the volatility of the Ghanaian cedi, undermining economic stability and impacting the cost of imports. The absence of this substantial foreign exchange inflow necessitates borrowing, increasing the nation’s debt burden. These funds, had they been channeled through legitimate channels, could have financed critical infrastructure projects, healthcare initiatives, and education programmes without resorting to external loans.
The gravity of this situation underscores the brilliance of the Gold Board (Goldbod) proposal put forth by President John Dramani Mahama. Modeled on the successful Ghana Cocoa Board, the Gold Board would centralise gold buying and export under government control. This model offers a clear path towards capturing the full economic benefits of Ghana’s gold wealth, from maximising foreign exchange earnings to ensuring proper taxation.
The potential payoff is significant. Estimates suggest that with the implementation of a robust Gold Board, Ghana could rake in over $10 billion annually. This would not only dramatically increase government revenue but also stabilise the cedi, reduce reliance on external borrowing, and provide a powerful catalyst for national development. The Gold Board isn’t just about addressing gold smuggling; it’s about unlocking Ghana’s true gold potential and securing a brighter economic future for the nation.
Addressing the longstanding issue of gold smuggling is crucial for achieving sustainable economic growth and ensuring that the benefits of Ghana’s natural resources accrue to its people.
