Private licenced gold buying houses are crippling the state-owned Precious Minerals Marketing Company (PMMC), as far as the gold export business is concerned, PMMC CEO George Abredu-Otu has said.
There are some 300 licenced gold trading houses in the country, but only about 10 buy from the PMMC for export, Mr Abredu-Otu told Ekow Mensah-Shalders on Class91.3fm’s Executive Breakfast Show on Wednesday February 24.
According to him, many of the private gold buying firms have sidelined the PMMC because of the “little” commission they have to pay, and, so, prefer buying from the private licenced houses, who, he said, are “undercutting” the commission by charging negligible amounts.
Both foreigners and locals own the private gold buying houses, Mr Abredu-Otu said, adding, that the Ministry of Lands and Natural Resources, a few years ago, liberalised the industry with the “flimsy” excuse that the PMMC was being “complacent” in doing its work, thus, making Ghana lose a lot of money through smuggling.
In his view, however, there has not been any improvement since the liberalisation came into force, and noted that most of the private licenced buying houses are owned by former staff of the PMMC.
Mr Abredu-Otu’s concerns follow a recent impoundment by the Customs Division of the Ghana Revenue Authority (GRA), of 12 boxes, which contained gold bullion, weighing about 480kg at the Kotoka International Airport. The bullion was valued at US$18million.
He said a mafia syndicate has taken a stranglehold on the gold export industry, thus, muscling out the PMMC. “The mafia in the system is very strong”, Mr Abredu-Otu said, adding: “…If there were no mafia involved, how on earth can you put gold in a pickup and drive straight onto the tarmac and purport to load gold onto a container? …How were they able to outwit the security in the first place? Is it possible for you to go to the airport and walk onto the tarmac?
“Unless the playing field is levelled, we can’t compete with them. And I’ve told you that even the commission that we charge, they are undercutting us… some of the big trading houses, when they sell their goods in Ghana, when they sell their shares, they give money to their compatriots to go and buy gold, then they export, not through PMMC, directly outside the country and the law says that, at least, 80 per cent of the proceeds must come back to the country, they don’t do it, they keep it outside, use the foreign currency there to import their goods, sell, get the cedis, buy gold, and then send it out, so, we are not benefiting in anyway.
“The foreign currency supposed to come into the system to shore up the cedi is not coming. Look at the way they’ve outwitted us. Some of them, even the small amount that they bring into the country, they do under-declaration. If somebody has 20 kilos, he goes to the airport and declares five and takes the 15, and he is, thus, repatriating profits based on the five kilos. Do you know what they do? They change the money on the black market; PMMC can’t change money on the black market. How do you compete? So, they are able to go to the buying areas and buy gold above the world market [price]” he complained.