Support For The Gold For Oil Deal – Open Letter To The Citizenry Of Ghana

Fellow Ghanaians, once again, I extend my warmest felicitation to you.

As someone, who has worked on matters concerning the Gold Mining Industry, so as part of the Fixing Ghana Agenda, I write to submit to you a strong perspective on the Gold for oil deal so as to motivate you, for you to give your full support to it. So, that we individually and collectively proffer good suggestions like what one of our most seasoned national leaders, in the person of His Excellency Ex-President JDM Mahama has asked for transparency in the Deal for the success of it which will provide very fast respite (recovery time) to the national economy which we all agreed that is in a very serious crisis.

So, the seeking for the support of the IMF by our Nation for macroeconomics stability, debt sustainability and as a foundation for higher and inclusive economy growth, which we all have agreed is the right way to go, because the seeking for financial bailout from the IMF, has become part of our nation’s brand, hence it is not news to all of us what is news to the public is matters on the debt exchange program occasioned by the delay in opting for debt suspension by the World Bank etc or not opting for the IMF support for the macroeconomic stability at a very early time when debt was at lower threshold.

Folks, we are all fully aware that the depreciation of the Cedis is a main problem contributing to the macroeconomics instability and debt unsustainability for instance over GHC130Billion has been added to our nation’s debt, which is neither due to borrowing nor as an over expenditure but due to the currency exchange differentials. The depreciation of the Cedis is due to among others he operation of fiat money that is our currency not supported with sufficient gold reserve (the gold Standard) or linked with a major currency like the US Dollar, the Euro as well as our inability to generate and save more foreign currency especially the United States Dollars through massive export of value added goods and domestication of our needs through import substitution respectively.

Fellow Ghanaians, the gestation period for the production of Agricultural products like rice for import substitution policy and for export of the surplus is a long one and the fear of the associated lot of uncertainties (including effect of likely bad weather if not under irrigation, likely action by pest and arsonists, post-harvest losses) and especially of the fact that the cost of 100kilogram of rice is lesser than one ounce or blade of gold, so the easiest way that can help us general more foreign currency effective immediate and throughout the year is the vibrant extractive industry which involves massive production and exportation of Gold weekly. Please remember that the abundant gold gave the name of our Country in the Colonial days as Gold Coast, so the people with gold should not be made to suffer, hence we must support the gold for oil deal.

My Compatriot, we have a good history of the extractive industry in the Nation’s economy recovery program in the past. The late General Acheampong took over from the Busia Regime on 13 January 1972 due to economic crisis in the country then, which led to austerity measures and the devaluation of the Cedis, so the hardship caused the late General Acheampong to topple the then regime of Dr Busia and the great General was able to make the economy to recover without taking even one dollar but relied on the extractive industry for funds for national development by ensuring the effective production of gold by the State Gold Mining Company, the partial nationalization of Ashanti Gold Company (AGC) Obuasi Mines, Dunkwa Gold Dredging Company was also made very operative this action together with the motivation of the Citizens for OPERATION FEED YOURSELF and OPERATION FEED YOUR INDUSTRIES made the nation to gradual gain some recovery and the currency exchange rate which was hovering around 30 Cedis or so to One Dollar was reduced to Cedis1.25 to one Dollar, more funds was generated for massive infrastructure and other developments which made his regime as second to that Dr Kwame Nkrumah in the development of the nation.

Folks, another history of economy crisis in this Country was in the 1980s under the reign of the PNDC, this made the leaders of the Nation at that time under the auspices of the IMF and the World Bank to embark on a Structural Adjustment Program (SAP) and an Economy Recovery Program (ERP) including measures for the attraction of massive Foreign Direct Investment within a short time, and the extractive industry was seen as the area, the nation can earn more dollars to meet the nation’s needs including the importation of petroleum products within shortest time. So to ensure massive production and exportation of Gold, the SAP/ERP led to the enactment of the Minerals and Mining Law 1986 (PNDCL153) which opened up the mining industry which then required massive capital investment then beyond the scope of the Nation for the participation of foreign Companies with the needed capital to invest in the mining of precious minerals like Gold and Diamond for export and industrial minerals like Salt needed for domestic consumption, the petrochemical and pharmaceutical industries and Limestone etc for the manufacture of cement etc.

Immediately after the passage of the Minerals and Mining Law 1986 (PNDCL153), the PNDC established the Minerals Commission in 1986 to support the then PNDC Secretary for Mines and Natural Resources and with the Minerals Commission, PNDC undertook a revolution (transformation) in the extractive industry. So through the inputs of the Minerals Commission, the Prestea Underground Mine and the Tarkwa Underground Mine which were the assets of the then State Gold Mining Company and other areas suspected to contain gold termed as minerals concessions were sold out to foreign Companies as Mining Lease by the PNDC.

Folks, Ghana was only to benefit a small percentage of the Gold mined by the Foreign Companies through 10% royalties and maybe some of the dollars earned which will be converted into Cedis for payment of Local supplies, Local Service Providers, Staff compensations, taxes, Corporate Tax, PAYE tax, SSNIT Contributions of employees etc, but leaving huge dollars in the foreign accounts of the Foreign Mining Companies, so huge capital flight was the order of day since then. Hence, any mutual cooperation between the Nation and the Ghana Chamber of Mines for an additional gain of 20,000 ounce of gold per month for oil at this time of our crisis must be supported by all of us, so please give your support to the gold for oil deal.

Folks, the State of affairs in the Mining Sector by the Large Scale Mining Companies was the production or smelting of the gold under defined Metallurgical Security Code which ensured 100% accounting of the gold smelted to Ghana Revenue Authority (GRA) and Bank of Ghana as well as 100% accounting of the Gold in the form bars of bullion and gold samples for Assay (laboratory analysis) to the Ghana Revenue Authority through a Stationed Custom Officers with the Mining Companies for supervision of the weighing of the gold bars for export and gold samples for assaying (laboratory analysis) of each bar of gold and the proper documentation of the gold bars and gold samples under signatures by the Head of Security, the Process Plant Manager, and a Custom Officer from GRA. The Custom Officer is required to ensure that the gold samples sent for assay are returned for the next smelting in the Gold House.

The Gold bars are then boxed under the strict supervision of the Custom Officer and the Head of Security, followed by the fixing of the boxed bullion with the seal of both GRA by the Custom Officer from GRA and that of the Company by the Plant Manager, these sealed boxes containing bars of bullions are weighed by the Custom Officer and the Plant Manager under supervision of the Security Head and details are documented under the signatures of the Head of Security, the Process Plant Manager, and the Custom Officer from GRA. The bullion is then put in strong safe with three locking systems with keys kept by three different persons including the Head of Security. The affected persons including the Custom Officer are searched out through electronic system including the use of walkway metal detector and with a hand held metal detector for the search before total exit from the gold house and the Gold House is secured with three different locks with keys controlled by three persons including the Head of Security.

The state of the pure Gold content of each bar in toy ounces and any associated silver, iron or copper content as impurities also in ounces are computed in dollars by the Finance Manager of the Company and the Custom Officer using Bloomberg’s and London’s troy ounce of gold price in dollars and that for any copper, silver contents are also calculated in dollars and the combined effect is termed as Gold sales for accounting to GRA Head Office by the Custom Officer for the payment of the required revenue or tax and to Bank of Ghana by CEP Officer and emailed to the Gold Buyer say Rand Refinery in South Africa by the exporting Company with Mining Lease as advancing warring of cargo in transit. The gold is exported in the following day under escort by Ghana Police and Custom Officer to Kotoka International Airport Accra.

Folks the above details are just to inform you that the Large Scale Mining Companies with Mining Lease have been accounting properly for both the quantity and weight of gold bars plus the content of copper, silver in the gold bar and most important the revenue accrued from 100% sale of the gold, the copper, and silver outside Ghana. No hoardings allowed nor a hold up of the gold produced by the Large Scale Mining Companies under the auspices of the Ghana Chamber of Mines for more than one week. But through a retention agreement, the Large Scale Mining Companies are permitted to retain a greater percentage of the revenue in foreign currency in dollars outside Ghana. Hence a loss to the Nation.

Folks, Section 6 of Article 257 of the 1992 Constitution vested every mineral within Ghana in the President on behalf, and in trust for the people of Ghana. It is therefore logical that both the Ghana Chamber of Mines and the Government of Ghana come out with a mutual measure to help alleviate the hardship being endured by the citizens of Ghana who are the owners of the Minerals and who are going through difficulties because of no adequate dollars to buy petroleum products from outside Ghana.

So any friendly or mutual way outside using the Law by the State through the Presidency to get the support of the Ghana Chamber of Mines and her member Companies, for Ghana to gain an additional 20% of the Gold produced by the Large Scale Mining Companies for us to get extra dollars to buy oil must be welcomed by all patriotic Ghanaians, hence this submission is to inform you about this pertinent issue and related matters for you to give your full support for this novel idea at this time of the economy crisis, which depreciation of the Cedis is a contributing factor and gold export by the State can help generate more dollars to strengthen the Cedis. Since the Gold for Oil is meant to reduce the high demand by Oil importing Countries for dollars from Bank of Ghana to meet the nation’s demand for 350million dollars of imported oil per month so, your Support for the Gold for Oil deal cannot over emphasized.

Folks, in the case of the Small Scale Mining Sector, I still stand for banning it and navigate the licensed Small Scale Miners to a proposed Medium Scale Mining Sector so as to permit our nationals in mining to collaborate with foreigners because mining is capital intensive and our brand is to front for foreigners. But herein, I only wish to bring to your information the state of affairs on Small Scale Mining.

Artisanal Mining in gold then coined as Galamasey by the locals but regarded as Small Scale Mining by the Colonial Masters was banned by the Colonial Administration in 1907 and only restricted the mining of gold to Underground Mine Workings, which was and is capital intensive, so could only be done by Foreign Companies since it was beyond the scope of the locals. There was also fear of likely encounter of human spirits in the Underground Mine by the Southerners, so Northerners especially Dagartes employed to work in the Underground Mines. So, the Southerners concentrated in farming whilst doing Small Scale Mining under secret cover. Small Scale Mining accordingly remained banned until 1986 when it became entrenched and widespread.

So as part of win-win solution, the PNDC as part of the Structural Adjustment Program in the 1980s, legalized Galamasey, an informal activity as part of a poverty Alleviation programs or PASCAD in order to bring it to the formal sector by the inclusion of Small Scale Mining Law as section 77 of Minerals and Mining Law 1986 (PNDCL153) and thus allowed the indigenes of the gold deposits areas to conduct artisanal mining, contingent on if and only if it was in the interest of the affected communities to do so.

Fellow Citizens, the legalization of Galamasey (Artisanal mining) was the first step to bring it into the formal sector through the process of Formalization and Regulation of Galamasey (Artisanal mining) into the formal sector for effective control to reduce the associated risks and for earning of revenue to the State through tax. So, as part of the Legalization and Formalization processes in order to ensure effective Economy Recovery Program, the PNDC on 19 April 1989, enacted the Small Scale Gold Mining law 1989 (PNDCL 218).

This made it possible for an immediate establishment of the Precious Minerals Marketing Company in 1989 by the passage of the Precious Minerals Marketing Company Law 1989 (PNDCL219) to help the Minerals Commission among others to develop and support all streams (Down Stream and Upstream and to some extent the middle or side steam) in the Small Scale Mining sector, especially the Downstream as well as a mandate to grade, assay, value, process minerals from the Small Scale Mining sector and be solely responsible for 100% purchase of the Gold from the Small Scale Mining Sector for export to earn more dollars for Bank of Ghana to support the economy recovery program. The PMMC law therefore permitted the establishment, registering and granting of gold buying license to Gold Buying Agencies which activity was restricted to only Ghanaians in line with the Small Scale Mining Law, so that all aspects were or are restricted to only Ghanaians.

Folks, as narrated above, Small Scale Mining was restricted by a law to only Ghanaians and the Precious Minerals Marketing Company which was established in 1989, was the only Institution in Ghana to buy 100% gold from the Small Scale Miners through her licensed Gold Buying Agents, wholly Ghanaians were established in 2015 by the Mineral and Mining Act 2015 (Act 900) to deny the Monopoly enjoyed by the State through the Precious Minerals Marketing Company for the 100% purchase of the gold from the Small Scale Miners and exporting same as put in place by the PNDC.

So the Focus or concept and operation of PMMC, especially the monopoly of PMMC as the sole purchaser and exporter of gold from the Small Scale Miners was changed or abrogated in 2015 and made the PMMC without change of name (a very serious issue) to be the Assayer of the Government thus responsible for Assaying (laboratory analysis) of Gold from the licensed Gold Exporting Companies who are to buy the gold from the Small Scale Mining Sector. The regulation required the licenses of the old licensed Ghanaian Gold Buying Agents which were initially licensed by the Precious Minerals Marketing Company as directed by the Regime of the PNDC so as to buy the gold from the Small Scale Miners on her behalf, not to be renewed when such licenses expired. As stated, the regulation rather established Licensed Gold Exporting Companies who will be licensed by the PMMC for buying the gold from the Small Scale Miners normally quoted in dollars using the World Price but pay for the Gold at the prevailing exchange rate in Ghana Cedis.

Fellow Ghanaians, the use of Licensed Gold Exporting Companies (Bullion Companies) effective 2015 was against the very good intention of the PNDC to reduce smuggling of gold and ensure maximum returns to the State of Ghana from the gold sales from the Small Scale Mining Sector, by getting the PMMC which is akin to COCBOD to be the only Agent to buy 100% of the gold produced from the Small Scale Mining Sector and the exporting of same Gold from the Small Scale Mining Sector.

Folks, though the total earnings in dollars by the Large Scale Mining Companies was higher than that of the Small Scale Mining Sector but the Small Scale Mining Sector through the PMMC was noted to repatriate almost 100% of the earned dollars back to Ghana than the Large Scale Mining Companies. But with the change of the focus and operations of the PMMC in 2016, gold worth more than US$2.5Billion Dollars was smuggled from Ghana in 2016 to the United Arab Emirates as reported by Reuters as well as the Authorities of United Arab Emirates and the CIA checking on money laundering . You may wish to confirm this report, so please Google for illegal miners smuggled US$7billions of Gold in 2016 by Graphic or and Google for Joy News uncovered smuggling syndicate shipping gold from Ghana and also search for 15 Billons dollars’ worth of gold smuggled to the Emirate as reported by Reuters. This smuggled gold was so because it was not captured by Bank of Ghana and PMMC as required by law, hence illegal sales of gold from the Small Scale Mining Sector and not from member Companies of the Ghana Chamber of Mines with Mining Lease because as stated above the gold produced and exported by the Large Scale Mining Companies are strictly covered by Reps of GRA, who together with the Company submit their signed reports to Bank of Ghana.

Furthermore in the same 2016, a plane loaded with US$50Miillion Dollars’ worth of Gold from Ghana presumably smuggled gold out of Ghana, was detained at the International Airport in Dubai, you may check in the net for this story. There were also stories of people keeping the gold in their homes without immediate sale and thus not accounting to GRA and Bank of Ghana as required from the Large Scale Mining Companies. Stories of some Ghanaians buying properties in Emirates, sponsoring Slay Queens etc to Dubai may be linked to some of the persons who made illegal sales of smuggled gold to Dubai. These reports speaks volume of a great loss of Billions of dollars from the extractive sector especially the Small Scale Mining Sector by the State, hence huge capital flight feared, this calls for a way for reversing the situation otherwise we would continue to suffer fast depreciation of the Cedis.

So fellow Ghanaians, any logical measure to ensure Ghana gains or enjoys 100% from the bedeviled Small Scale Mining Sector by reversing the bad regulation passed in 2015 and make the State through Bank of Ghana supporting the Precious Minerals Marketing Company to perform her original role within her jurisdiction as mandated by the PNDC by buying 100% of the Gold from the Small Scale Mining Sector and export same to generate more dollars to support the State must be hailed by all patriotic Ghanaians.

Folks, our economy and political history will require the Government of Ghana to adopt a good tactics (thinking outside the box) to help the Precious Minerals Marketing Company to wrestle for or gain her original role made in 1989 by the PNDC to deal with smuggling of gold as well as isolate the possible penetrations of foreigners into the Small Scale Mining Sector and prevent individual exporters of the gold to use the revenue made in dollars from gold sales to invest or put into accounts outside Ghana. So, you need to give you ardent support to such a good idea.

Folks before January 2023, I was with the Islamic faith, but I made a triumphant entry to the House of Abraham in Santasi Zongo area on the Kumasi to Obuasi main road in January 2023, and with my Fixing Ghana Agenda, whilst at the Church the preaching from the Head Pastor, made me to develop the spirit (feeling) that the Gold for Oil Programme was God Sent or wisdom given by God, to help in the gradual propelling of the economy recovery Programme after we have gone through a hardship to let us change our attitude. So that we can work collectively to put this nation on a firm foundation through being truthful, hardworking, supportive to each other and see to the transformation and modernization of the Agric Sector with value addition to the products, to be driven by agro-industries hence the idea of One District One Factory must be seen as a good one.. This can be deduced from the declaration in the Holy Bible at 1 Peter 5:10 which states ‘So after you have suffered a little while, He will Restore, Support and Strengthen you and He will put you on a Firm Foundation’. My interpretation is God will restore our good senses to see to the right things for the attainment of Ghana Beyond Aid as a measure to arrest the cyclical for support from the IMF for macroeconomics stability, debt sustainability and as a foundation for higher and inclusive economy growth.

So my advocate for your support for the Gold for Oil Programme is for us to see it as a tool to kill two birds with one stone. That is to gain more dollars to help arrest the depreciation of the Cedis and a measure for reversing the bad regulation made in 2016 which has the tendency to deny the State massive revenue through the taken away the original operations of PMMC which is akin to COCOBOD, as the sole authority for the purchase of gold from the Small Scale Mining Sector and export same for 100% repatriation (return) of the gold sales to Ghana through Bank of Ghana and given to Exporting Companies with foreigners involvement.

Flaks, it is envisaged that if the Gold for Oil Deal is effectively managed, Ghana may gain not less than US$2.5Billion Dollars from only the Small Scale Mining Sector at the end of the year being the amount as the allegedly loss through every year by smuggling and hoarding since 2016. This US$2.5Billion Dollars is expected from only the Small Scale Mining Sector plus an expected about 0.4 Billion dollars sales from the expected 20,000 ounces of gold from the Ghana Chamber of Mines may give about 3 billion dollars from the Gold for Oil Deal per year. Thus this will give a great impact to the National Economy, since about US$3.5Billion Dollars per year is reported as needed for the importation of Petroleum Oil and we are seeking for 3.0Billion Dollars which will come in bits over three years but if the Gold for Oil Deal is properly managed, Ghana may get about 7.5 Billion US Dollars (2 .5 billion dollars per year times 3years) within the same three years we may be under ‘prison custody’ of the IMF.

Folks Lessons were learnt from the Iraq’s Oil for food program which the UN in 1996 allowed Iraq to export Oil for the purchase of food and necessities (essential medicines, vaccines etc.) for her population and pay for the Saddam Hussein’s Gulf War reparation to Kuwait which was bedeviled with corruption and bribery.

This UN ’s Oil for food program which started in 1996 which was mooted by the US through the then Ex-President Clinton’s Admin and executed by Iraq under the control by the UN was full of scandals of mismanagement, corruption and bribery. Saddam Hussein made 1.7 billion dollars through surcharges and kickbacks, 10.9billion Dollars through illegal oil smuggling. According to the CIA investigation report participating Oil lifting companies including African Middle East Petroleum Company, Elf-Total of France paid bribes to win some of the contract. Although the late Kofi Annan, the then Secretary General of the UN was not found guilty on any scandal including issue of conflict of interest, the Investigators found Kofi Annan’s son by name kojo Annan, inappropriately concealed his business link with a major food for oil contractor and received an initial payment of US$400,000,00 from one of the inspectors from Switzerland called Cotecna which won 10 million US dollars contract from Saddam.

Also, Saddam Hussein used secret vouchers worth millions of dollars to reward individuals and companies for helping Iraq to subvert the sanction instituted against Iraq for the Gulf War or invasion of Kuwait. It found some of the accomplices of Saddam Hussein who received rewards included the UN appointed Chief Administrator of the program, Mr Sevan. Corrective measures by the Investigators include, the UN should be clear with the operation, appoint a new coordinating officer, and assign an independent auditor and put, proper procurements procedures which must be followed by the operators.

Folks the Gold for oil should not give us too much headache as the Iraq’ or UN’s Oil for food program for Iraq, because; the Gold for Oil has four clear legs which we can put measures to reduce corruption risks to barest minimum. The First leg is the 100% purchase of gold by the PMMC from the Small Scale Mining Sector with Cedis funds from Bank of Ghana plus a purchase of 20,000 ounces of gold from the large Scale Mining Companies both purchases made at the prevailing exchange rate and paid in Cedis based on Bloomberg reported rate for one ounce of gold for the day of the purchase and exporting same for dollars through an account with Bank of Ghana.

It must be noted that the PMMC gained extensive experience for doing same operation of the purchase and exporting of gold since 1989 until it was denied of this role in 2016. Leg number two is, Bank of Ghana to perform an Open Market Policy as a required of it by supporting the economy of Ghana for PMMC to re-establish herself with adequate funds in Ghana Cedis to purchase gold on her behalf from the Small Scale Mining and that from the Ghana Chamber of Mines and be reimbursed same amount at the end of the operation through an escrow account with Bank of Ghana. The third leg is the purchase of the oil from OPEC through, Oil lifting Companies like Total of France or any major Oil supplier with the dollars obtained from the Gold for oil Programme in an escrow account with Bank of Ghana to be executed say jointly by PMMC/BOST for delivery of same to BOST which is a State institution which is already performing the role of bulk distributing of oil since it was established. The Fourth leg is the usual lifting of the oil from BOST by the Oil Marketing Companies like GOIL, Total, Shell, Crown Petroleum Ghana Ltd, etc.

So fellow Ghanaians our relevant experts and relevant CSOs, academia to study the supply chain/the four legs and come out with ideas to help reduce any associated corruption risk with this novel idea and stop throwing bombs to kill a very laudable idea which needs to be test run as a pilot project for some time before submitting to Parliament for scrutiny. So, we should not make the issues of corruption risks which can be checked to be a very big problem to deprive the nation of a very good respite (fast recovery time)

Best regards.

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