Gold for Oil, temporary solution for fuel shortage, smuggling and galloping exchange rate

Background
Blessed are the Peacemakers, for they will be called the Children of God is a Bible decree (proclamation) at Mathew 5:9. So, any measure that will help make the people of Ghana to benefit from her resources especially the natural resources must be applauded and supported by godly people, since this will help to bring peaceful atmosphere for national stability (social cohesion at the local level and national cohesion nationwide).

As a former Military Officer, let add that the philosophy of the Military globally is Country First, hence protection of Democracy especially the aspects that promote the interest of the people is the role or hallmark (pledge) of Military Service personnel whether in active service or retired personnel who are the auxiliary forces of the Military for auxiliary operations.

So, the motivation for my fighting spirit (Bogobiri), through contributions on National issues on the front burner as mainly published in the website of the reputable media namely Modern Ghana since 2020 especially on the Opinion Column. So my further take on the godly Gold for Oil Initiative.

Gold for Oil Deal
It need to be stressed that the Mining sector is full of technicalities and legalities. This was the situation, before the introduction of the Gold for Oil Deal for gold produced in the Small Scale Sector, where the export of Gold from the Small Scale Mining Sector was in the hands of Licensed Gold Buyers who doubled as the Exporters of the Gold. But, the activities of some of the Gold Exporter were against the interest of Ghana through failure to bring one dollar or one cent to Ghana after they have exported in order to help improve the economic fundamentals of Ghana. Some of them promoted or are promoting illegal mining, so as to get more gold for export. Thus the activities of the crooks in the gold export business was anti-Ghana by not helping Ghana to reduce the depreciation of the Cedis against the US Dollar by this negative actions the affected Exporters were/are not helping in the building of sound macroeconomics of the Country as well as not helping to preserve and protect Ghana’s environment.

Due to the problem with the economic fundamentals of Ghana as aggravated by the COVID19 pandemic and the Russia Ukraine , the money policy of the Federal Reserve Bank of USA, culminating in high cost of importation/a shortage of foreign Exchange or US Dollars, the Domestic Gold Purchase Program (DGPP), was introduced in June 2021 as swift and immediate measure., It really helped bring some success in the Foreign Exchange Market by boosting the Bank of Ghana International (Foreign) Reserves thus gradually gave some jump start the economic towards the improvement of the macroeconomics/the economic fundamental of Ghana.

The Domestic Gold Purchase Program was/is aimed to double the gold stock reserve over five years effective 17 June 2021 to end in June 2026, thus a temporary scheme meant to achieve an increase in the Bank of Ghana Foreign Exchange reserve, diversify the Bank of Ghana foreign exchange reserve portfolio. So DGPP, was crafted to convert local currency into foreign reserves by using Ghana Cedis to buy gold from the Large Scale Mining Companies under the auspices of the Ghana Chamber of Mines. DGPP excluded the gold from the complex Small Scale Mining Sector.

In December 2022, in response to the escalating ex-pump prices of petroleum products and to avert any possible shortage of these products due to a substantial increase in the world price of petroleum gas gave birth to the Gold for Oil (G4O) Initiative.

The G40 deal was merely by a directive from the Sector Ministry, thus it was not governed by law. The Directive which was against exiting small scale mining law as enacted by Parliament on gold transaction in the Small Scale required small scale miners to sell their gold to Bank of Ghana instead of exporting the gold after assaying and final documentation and sealing with the seal of the Exporter, GRA and that of the PMMC at the PMMC. Bank of Ghana’s transaction in the Gold business is governed by section 4(c) and 50 (d) of Bank of Ghana Act 2002 (Act612).

With the G4O, the PMMC was only required to weigh and conduct laboratory analysis on behalf of Bank of Ghana. Unfortunately this was contrary to an aspect of Minerals and Mining Amendment 2015 (Act 900) enacted in 2015, by this law the sales of Gold in the Small Scale Mining Sector involved five key actors, the Miner, the Licensed Gold Buyers who doubled as a Licensed Gold Export Companies in Ghana, GRA through Custom Division PMMC for assaying and sealing of the boxed bars of gold and the Off Taker of final buyer in Dubai. Not talking of some of the miners who hoard the gold and may smuggle it out of Ghana. The gold sale is governed by Forward Sales Agreement which involved the Small Scale Miners, the Licensed Gold Buyers and Exporting Companies with their associated Off Takers. Google for Gold Export Agreement.

The G4O was introduced based on the realization of the success story with the Domestic Gold Purchase Program (DGPP), which wholly involved the purchase of gold from the Large Scale Mining Companies under the auspices of the Ghana Chamber Mines. The gold from the Large Scale Mining are by Forward Purchase Agreement. Unlike the complex situation in the Small Scale Mining Sector, the Large Scale Mining Companies enter into a Gold Forward Agreement with Bank of G the Mining Companies as forward seller and Bank of Ghana as Forward buyer, but the Large Scale Mining Companies have Sales Agreement with their Off Takers namely Gold Refinery, that is the deal directly with their Off Takers normally an oversea Gold Refinery, say Rand Refinery in South Africa.

So, all the gold from the Large Scale Mining Companies without diverting, no smuggling, no hoarding nor holding the gold against insurance cover is shipped on time to the Oversea Refinery. It is the Off Taker or the Gold Refinery say Rand Refinery in South Africa on behalf of her Client that is a Large Scale Mining Company in Ghana say Golden Star Wassa Mine did or does the transaction of the Domestic Gold Purchase Program with Bank of Ghana under what may be termed as Backward Agreement, since the gold goes from the Large Scale Mining Companies to the Refinery. The gold in the Vault of Bank of Ghana is therefore the Gold with the Refinery so recorded as Monetary Gold held by Bank of Ghana or Gold from the Refinery to Bank of Ghana.

So, one may be right to say that the G40 was a disguise of the Domestic Gold Purchase Program, introduced as a smart move to break access to the Gold from the Small Scale Mining Sector especially in the hands of Gold Exporting Companies governed by an Act of Parliament Act 900 of 2015 and not by mere directive. So G40 was a very clever innovation by the initiator which caused the winding up of the businesses of the some of the Gold Exporting Companies.

DGPP was introduced in June 2021 for the Gold from Large Scale Mining Companies and the G4O was introduced in December 2022 for Gold from Small Scale Mining both for a common aim of improving the economic fundamentals of Ghana, when the Cedis depreciated heavily against the dollar or the dollar galloped very fast away from the Cedis.

In December 2022 to avert fuel shortage, the then Vice President of Ghana introduced G4O, after haven taken cognizance of the fact that the export of Gold from the Small Scale Mining Sector was totally in the hands of Licensed Gold Exporters or the Gold Exporting Companies.

These Gold Export Companies were/are involved in Forward Gold Sales Agreements with Off Takers in Dubai and some of them kept all the foreign exchange so earned in foreign accounts thus not bringing a dollar or a cent to help to ease the then intense pressure on the Cedis in the face of high demand of foreign exchange for imports especially the importation of petroleum products from the International Market for huge domestic consumption.

Note that unlike the easy to understand or cooperate by the Member Mining Companies of the Ghana Chamber of Mines for the DGPP, there was no way to talk of DGPP in the Small Scale Mining without resistant including massive demos with the support of the gullible people. So, the G4O policy is envisaged by me as the reason for some kind of invokement of Force Majeure situation in the Small Scale Mining Sector to get petroleum supply to reduce a potential fuel shortage and not necessary to reduce cost of fuel as some gullible thought.

By this innovative idea, most of the Gold Exporting Companies and their Off Takers within the Small Scale Mining Sector had to support the G40 policy by surrendering their Gold purchases to Bank of Ghana for advance payment of Ghana Cedis by Bank of Ghana (BOG), for BOG to engage in barter trade for petroleum products.

So, the Gold for Oil involved/ involves Advanced Cedis paid by Bank of Ghana for Dore gold. The licensed buyers, buy the gold from Small Scale Miners, the gold is sent to Precious Mineral Marketing Company (PMMC) as the National Assayer for laboratory analysis by PMMC to ensure the gold content of 99.95 percent, the remaining percentage as residual material of silver and copper since gold alloys with silver or copper or both so you cannot get 100 percent gold on earth), Bank of Ghana then pays to the Licensed Buyer.

On receipt of the gold from the Small Scale Sector through the Gold Exporting Companies now reduced to gold buyers and no more exporting gold by or in the G4O Initiative, the next stage is the barter trade of gold for petroleum supply by Bank of Ghana, which involved two options or Channels either through Gold Broker Channel or through a Refinery Channel for the supply of fuel.

The Option by Broker Dealer Channel; The purchased gold is sent or given to a reputable foreign exchange broker as a Gold Broker who sells the gold and receives Foreign Exchange, the cash in dollars is paid to Bank of Ghana through a Nostro Account, that is a special account in the international market with a facilitator foreign Bank or offshore Bank to facilitate International Transactions, herein to pay with the Foreign Exchange from the Gold from the Small Scale Mining Sector to Petroleum Suppliers for the oil.

The second Option is by Bank of Ghana’s nominated Refinery. Alternatively the Barter channel gold goes through Bank of Ghana Vault then through a gold refinery route to a Bank of Ghana’s nominated Refinery which receives the gold and pays for oil from Petroleum Suppliers.

According to Bank of Ghana, all Dore gold produced by licensed small scale miners in Ghana, including community mines shall be bought by Bank of Ghana. , This was a directive from the Ministry of Lands and Natural Resources to promote the realization of the initiative the gold. So, it must be noted that though the G40 program crowded out some of the Gold Export Companies and their Off Takers, no judgment debt hunted Ghana by this tactful initiative.

Google for Responsible Gold Sourcing Policy by Bank of Ghana for details So the Gold for Oil Deal is for gold in the Small Scale Mining Sector and the Domestic Gold Purchase Programme is for the Large Scale Mining Companies and Aggregators.

Gold for Oil was just a temporary measure to deal with a problem of likely fuel shortage as the name implies. So, as recommended by this author (Bogobiri) as published in 2022 in the website of Modern Ghana, there is the urgent need for Ghana to come out with a Medium Scale Mining for the rich, relegate Small Scale Mining to poor rural folks as Community Small Scale Mining (galamasey) and the establishment of Minerals Board and maintain the Precious Minerals Marketing Company (PMMC) akin to COCOBOAD and Cocoa Marketing Company respectively. This idea that was bought by Hon Mr Ofori Attah, but he proclaimed the conversion of PMMC to Minerals Board during his 2022 budget Statement to Parliament. Ghana stands to gain very much with my concept if Ghana takes note on my recommendations for dealing with the problems in the Small Scale Mining Sector.

Ghana’s problem with Small Scale Mining

So, let me say that our problem with Galamasey and illegal mining in the small scale mining sector is due to very bad laws on Small Scale Mining because the laws are not based on the history or the underlying issues including the characteristics of Small Scale Mining, hence ignorance by some of our leaders about what is Small Scale Mining and Illegal mining, regardless of their academic achievements otherwise the disease of corruption and greed has taken the best of them.

I need to acknowledge that Dr Tony Aubynn, a former CEO of the Ghana Chamber of Mines, is one of the few who appreciate that Small Scale Mining is Galamasey and Galamasey is Small Scale Mining (decorated donkey is still a donkey).

So Dr Tony Aubynn has been on the same wavelength or same trench with me, fighting for very good mining laws to include a third nomenclature as Medium Scale Mining for the rich and come out a very good law on Small Scale Mining as Galamasey law as enacted by the PNDC or Community Small Scale Law. Google for ‘Review laws on Small Scale Mining in Ghana by Dr Tony Aubynn.

Another person who understands the characteristics of Small Scale Mining shares the same idea with me is the Western North Regional Minister designate, a former staff of the Minerals Commission, hence, a very good person like Dr Tony Aubyn for the appointment as the CEO of Ghana Chamber of Mines

It is very strange mindboggling (hard to believe) that despite the abundant Reports on the massive rots (loss of revenue in foreign exchange or US Dollars needed to improve the economy fundamental of Ghana and massive destruction of the environment) occasioned in the Small Scale Mining Sector, our leaders are or Ghana is not able to have answers to deal with the rot in the Small Scale Mining Sector as at date. That is why I (Bogobiri) suspect ignorance in line with the Bible verse at Hosea 4;6 ‘’Lack of Knowledge makes people perish’’ otherwise our leaders interest in acts of corruption by the creation of fleecing ( looting) schemes in the Mining Sector. This really speaks volumes of the state of affairs in Ghana notwithstanding the thousands of PHD Holders in Ghana and millions of Christians/ Moslems respectively.

So, the Gold for Oil (G40) Initiative was an unknowingly attempt by the initiator (Dr Bawumia) to help reduce to the barest minimum level the looting or fleecing of Ghana. Hence the G4O, as explained below was an attempt to reverse either acts of corruption by some of Ghana’s Officials against Ghana’s or godly peoples’ interest for the improvement of Ghana’ economy fundamentals.

The permissibility of Private Gold Export Companies as initially occasioned by Minerals and Mining Act 2006 (Act 703) to operate in the Small Scale Mining Sector by buying gold and exporting same was a sin against Ghana. It was against the constitutional intension originators of the Small Scale Mining law when the lifted the ban on Small Scale Mining or Galamasey.

This sin against Ghana was aggravated in 2015 by the Minerals and Mining Amendment Act 2015 (Act 900) especially the permissibility of foreign Companies or foreigners to partner with Ghanaians to export Gold from the Small Scale Mining Sector specifically reserved for Ghanaians for the obvious reason of preserving the environment as decreed by the laws on Small Scale Mining by the PNDC, before lifting the 80 years old law on Small Scale Mining.

It is unbelievable that some of our leaders could not or failed to deduce that as part of a way to reduce the haphazard destruction of the environment by Galamasey Operators and provide a livelihood to rural communities with mineral (Gold and Salt) deposits made the PNDC to lift in 1986, the 80 years ban on galamasey with a law on Galamasey (Small Scale Mining) as PAMSCARD.

The British Colonial masters in 1906 banned Galamasey, in English as Small Scale Mining. So the PNDC in 1986 lifted the 80 years ban, as a recognition for or in honor of the Time Tested Indigenous informal mining activity known as Galamasey termed in English as Small Scale Mining during the Structural Adjustment Program in 1986.

So, the PNDC formalized Galamasey through the initial process of Legalization as at Section 77 of the Minerals and Mining Act 1986 (PNDC L153). Google for this law for confirmation. This was followed by a Formalization process by the Small Scale Gold Mining Act 1989 (PNDCL215). Google for this law and read Section 21 on the Interpretation of Small Scale Mining as a mining method which does not include the use of Sophisticated Technology. Hence, our ignorant leaders by permitting the use of Excavators in the Small Scale Mining is total madness. Period.

The PNDC law made it very clear in English language that no use of substantial amount or expenditure. This is not in Grunshie or French so by this expression, it excludes rich tycoons in Small Scale Mining and as such Rich Ghanaians must be prevented from Small Scale Mining operation by the State Security. Period. So allowing rich people in the Small Scale Mining Sector was a sin against Ghana.

The Small Scale Mining laws in Ghana, made Small Scale Mining strictly reserved for Ghanaians, (hence my English Teacher taught me that this implied no foreigner should be involved in whatever form, be it support services or partnering with Ghanaians. Period. So in 2012 allowing foreigners through Minerals and Mining Regulations (Support Services) 2012 (L12174) to provide support services hence the presence of the Chinese in Ghana with thousands of excavators and Chafang machines. My article in 2017, caused the repeal of this very bad law in 2019, but it was too late because the stable was closed after the horse has bolted away.

The Small Scale Mining law by the PNDC before lifting the 80 years old ban, decreed that it is only permissible if and only if it is in the interest of the affected Community (hence a Small Scale Mining operator must be a member of the community and his operation must be approved by the Community making Small Scale Mining to be galamasey and nothing more. Period.

The PNDC followed the formalization of Galamasey with the enactment of Precious Minerals Marketing Company Law 1989(PNDCL219), with the exclusive right or monopoly to buy the gold from the Small Scale miners (galamasey operators) and export same and bring 100 percent of the export revenue to Ghana to benefit the people of Ghana. By this law, the PNDC promoted Ghana First Agenda, the philosophy or the hallmark of the Military or godly people.

The PNDC, the originator of the Small Scale Mining did consider that man is very greedy and to reduce massive destruction of the lands/environment, made the maximum of 25acres for to be allocated to Cooperative Small Scale Mining and no more addition. So the current Small Scale Mining is a very bad one and must be repealed and replaced with a new law on Small Scale Mining in tweaking the PNDC laws to retain the law as galamasey or Artisanal Mining Law restricted to Ghanaians in the affected Communities so you must be one of them and actually physically living in the Community, hence approval of the Chief is a must, then Introduce Medium Scale Mining Sector for the rich and our Chinese friends.

The originators of Small Scale Mining took cognizance of that Small Scale Mining was a potential national disaster especially a potential existential threat, so the PNDC enacted Small Scale Mining laws in a very Clear English Language before the 80 years ban on Small Scale Mining was lifted, So our current problem is due to the bad laws involving Small Scale Mining and due to total ignorance on Small Scale Mining and greediness/acts of corruptions.

Corruption in the Small Scale Mining Sector

It was reported by CIA and Reuter or Reputable International Media that Ghana exported 7 Billion Dollars of Gold from the Small Scale Mining Sector to the United Arab Emirates but only 5 Billion US Dollars of Gold was accounted for by Bank of Ghana in 2016 thus 2 Billion US Dollars of Gold was not accounted for from gold sales from the Small Scale Mining Sector in 2016. Google for 2 Billion US Dollars of Gold sold in the United Arab Emirates not accounted for by Ghana. This was confirmed by the Government of the United Arab Emirates, including the arrest of an Aero plane with 50Million US Dollars’ worth of Gold at an Airport in Dubai in 2016. Missing Gold; how Ghana lost over 6 US Billion in gold export revenue to major trading partners. Google for Missing Gold; how Ghana lost over 6 US Billion gold export revenue to major trading partners. Also Google for 2 Bodies fight over gold export as state loses billions of dollars in revenue

The Small Scale Mining Sector is therefore full of hoarding of gold, smuggling of gold, less repatriation of gold sales etc hence it is highly characterized with a partial if not a total fleecing or looting scheme. Unfortunately and incidentally created by our Leaders and ignorantly endorsed by Members of Parliament in 2015 with the enactment of the Minerals and Mining Amendment 2015 (Act 900) the aspect that allowed Foreigners to operate in the Small Scale Mining Sector as Gold Exporters for gold from the Small Scale Mining Sector was a sin against Ghana.

For our President, His Excellency buying my Idea made in 2021 as published in Modern Ghana for a Medium Scale Mining Sector for rich Ghanaians to operate solely or in partnership with foreigners the and the conversion of the Precious Minerals Marketing Company to Minerals Board, he opted for Gold Board, I can confidentially say that in 2015, the then President of Ghana namely his Excellency JD Mahama was truly ignorant about this bad action by some of his Officials, that is the abrogation of the monopoly of the Precious Minerals Marketing Company for exporting of gold from the Small Scale Mining Sector.

So let me use this chance to thank our dear President His Excellency JD Mahama for buying my excellent ideas to deal with the menace in the Small Scale Mining Sector and for the improvement of the economic fundamental and Inclusive Growth, thus help in generating more employment for the youth through the vehicle of Medium Scale Mining and establishment of Minerals Board otherwise Gold Board as coined by President Mahama

Current classification in Mining Sector

Large Scale Mining Sector mostly by the Multinational or foreign owned Mining Companies mostly under the auspices of the Ghana Chamber of Mines and Small Scale Mining are the two nomenclatures in the books of the World Bank Group and the Mining Industry.

Thus in the books of the World Bank or globally Galamasey falls within what is most often termed as Artisanal and Small Scale Mining. The ignorant Leaders may say Galamasey is illegal mining and fail to find solutions thus find it very difficult to reduce its repercussion to the barest minimum. But Clever Leaders like the late His Excellency John Magefuli, a late President of Tanzania saw Galamasey as Small Scale Mining and worked hard to settle the operators gradually in gainful employment through linking them with the Large Scale Mining Companies and gradually settling them on alternative Livelihood projects.

Gold Transaction by the Large Scale Mining Companies

Gold from Large Scale Mining Companies are by forward sales program through Off Taker Agreement reached by an External Refinery example Rand Refinery in South Africa and strictly guided by a very clear Probity, Transparency and Accountability Policy through the implantation of Metallurgical Security Code with deployment of a Senior Custom Officer from GRA to physically monitor and document the Gold production, Gold assaying, labelling gold bar or bullion labelling, weighing, boxing, sealing of boxed gold bars with each boxed bullion not exceeding 35 kilograms, the securing of the boxed gold bars in a very strong safe with three locking system with keys kept by three Key Staff from different Department of the Mining Company for shipment the following day.

The details of the total weight of the gold in kilograms so produced are validated with the signature of three key persons as the Customer Officer, the Head of Security or his Rep not below a Senior Supervisor and the Process or Metallurgy Manager or his Rep not below Senior Plant Metallurgy Supervisor, after which the Custom Officer sends the details so singed against to the Finance and Commercial Manager.

Gold is sold in the International Market per troy ounce and the price is precarious thus depends on so some factors especially the demand for gold especially by India women and the supply. One ounce of gold in the International Market is 2,000 US Dollars.

So the Commercial Manager must convert the Kilograms of gold so produced to troy ounces (note 30 grams is equivalent to one troy ounce) and then compute the gold sales using the price of one ounce of gold as given by London Metal Business Association (LBMA) for the day.

The Commercial Manager, submits the details of the gold sales to the Custom Officer for verification and the correct details are validated with signatures of both the Custom Officer and the Commercial Manager. The details so signed by the Custom Officer and the Commercial Manager are sent to the Refinery by email by the Finance Manager, one hard copy is fixed very strongly to one of the Bullion Box for shipment to the Refinery to compare or confirm with the electronic copy.

Two hard copies are given to the Custom Officer on the day of shipment to be given to Bank of Ghana at Kotoka International Airport and GRA Office on arrival Kotoka International Airport.

The sealed boxed bullion with both the Seals of GRA and the Company are inspected on the day of shipment and loaded into a helicopter with escort provided by the Ghana Police, Custom Officer and a reputable Contract Security Company with International connection like Intercon Security or G4S.

The Gold Refinery, on receipt of the gold direct from a Large Scale Mining Company in Ghana, the Refinery conducts laboratory analysis or assay on the bullion to confirm or otherwise of the analysis made in Ghana by the Gold Supplier. The results and Gold Sales are submitted to Bank of Ghana and the affected Mining Company, the Account of the Company with Bank of Ghana or nominated Bank or Nostro Accont is credited with the sales. Not less than 70 percent of the Gold sales is normally repatriated to Ghana to meet the required statutory payments to Bank of Ghana, GRA, SSNIT etc and the general operations of the Company.