Ghana is losing a significant amount of foreign exchange due to unregulated gold exports, according to Sammy Gyamfi, the acting Managing Director of the Precious Minerals Marketing Company (PMMC). He expressed concerns about how this situation continues to weaken the national currency while the country fails to maximize the economic benefits of its gold resources. Speaking on Joy FM’s Super Morning Show, Mr. Gyamfi emphasized that gold has the potential to generate significantly more revenue than cocoa, yet Ghana has not structured its gold industry in a way that ensures the country retains its forex earnings. Unlike cocoa, which has a centralized export system controlled by a single body, the gold sector remains fragmented, allowing multiple exporters to sell abroad without a proper regulatory framework. He questioned why Ghana has long maintained strict control over cocoa exports but has failed to do the same for gold, despite its immense value.
Mr. Gyamfi also pointed out the environmental damage caused by gold mining and the lack of financial contributions from mining companies. He lamented that many of these firms fail to pay royalties, and the minimal taxes they were previously required to pay, such as corporate tax and a 1.5% withholding tax, have now been eliminated. As a result, while gold mining continues to have adverse environmental effects, the financial returns to the state remain minimal. Another major issue is the illegal smuggling of gold, which means much of the revenue from gold sales never makes its way back into the Ghanaian economy. The consequences of this are evident in the continuous depreciation of the cedi, as the country struggles to hold onto the dollars generated from its natural resources. According to Gyamfi, the effects are already visible in the black market exchange rates, where one U.S. dollar now requires more than 15 Ghanaian cedis, worsening the country’s economic challenges.
To address these pressing issues, Mr. Gyamfi proposed that Ghana should establish a centralized agency to regulate gold trading and ensure that forex earnings from gold exports are properly accounted for. By channeling gold sales through a single institution, the government would have better oversight of the industry, reducing smuggling and ensuring that foreign exchange returns to the country. He stressed that this approach would not only strengthen Ghana’s currency but also make gold mining a more sustainable and beneficial sector for national development. Without urgent reforms, Ghana risks continuing down a path where its most valuable natural resource is exploited without providing the country with the economic benefits it deserves. His call for regulatory intervention highlights the urgent need for Ghana to rethink its approach to gold exports, ensuring that the nation reaps the full rewards of its mineral wealth.
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