Monday, 30 October 2017

Corruption and IFFs: Ghanaians throw hands up in the air (part 2)

Corruption and IFFs: Ghanaians throw hands up in the air (part 2)

Adnan Adams Mohammed

In an interview with the Economy Times reporter, Adnan Adams Mohammed on the happenings within the natural resource sector, some stakeholders expressed worry that, the natural resources sector is the major area where illicit financial flows and corruption issues are high. He was surprised it has taken us six months for us as a country to get serious with the story of Swiss export gold worth of US$2 billion in 2016, but which was not accounted for by the PMMC.

The Bank of Ghana, last week, revoked the license of PMMC after the proceeds of over US$2.3 billion of gold exported in 2016 were not repatriated as required by law.

The non-repatriation of the US$2.3 billion gold exported is different from the US$2 billion worth of gold exported to Switzerland which could not be accounted for in the books of PMMC.

These two acts have huge negative consequences on the well-being of the economy.

Earlier this year, The Charge de Affairs of the Swiss Embassy in Ghana, Mr Ronald Fischer, at the annual Swiss-Ghanaian Chamber of Commerce (SGCC) cocktail and business executives meeting in Accra announced that, Switzerland imported over US$2 billion worth of gold from Ghana in 2016 alone for conversion into finished products for the world market.

He added that, the 2016 figure showed an overwhelming increase of about US$90 million over the 2015 figure of US$1 billion.

This announcement attracted the attention of Mr Ali Nakyea to do a follow up at the PMMC and Bank of Ghana but, his follow up uncovered that the two institutions had no record of the Swiss gold export.

This tells how the country is bleeding at the negligence and inefficiency of the public servants who are paid huge monthly salaries at the expense of the poor struggling ‘pure water seller’, head-porter (kayayi) girl and the numerous other hardworking tax payers.

Ali Nakyea is only left with the hope that, the media men and women are our last hope in this country to bring to the fore this canker to help the ‘Stop the Bleeding Campaign’.

Last week, Economy Times reported that, Ghana has lost a whooping sum of money from non-repatriation of proceeds made on the export of about $2.3 billion worth of gold.

The proceeds from the gold exports were not repatriated, thus, “enriching unscrupulous foreign gold dealers, mainly Indians and Chinese, and their Ghanaian collaborators” in the process.
· Abdallah Ali-Nakyea (Managing Partner)  

The Chief Executive Officer of the Precious Minerals Marketing Company (PMMC), Kojo Opare Hammond confirmed the report last week stating that, “US$2.3billion worth of gold was shipped through PMMC and none of the money that was earned was returned into the country as required by law.”

In the wake of this news, the Bank of Ghana (BoG) has revoked the export license of the PMMC, a company that exports gold and other minerals.

This has been confirmed by Mr Hammond last week.

“As at now, we are not doing shipping of gold. Even with our diamonds which we do not have any problems with, most of the time I have to really go and plead with them (BoG) to allow us to move. In fact, Bank of Ghana is really upset with this situation that we came to find ourselves in. But as we speak now, PMMC cannot export goods because of what happened previously” Mr. Hammond said.

He noted that, investigations are being conducted by the CID.

“This issue actually came up at one of the meetings we held with the Minister of Finance and he immediately asked the CID to take over and begin investigations into this and that is what is ongoing now”.

The Bank of Ghana in 2016 announced PMMC as the sole exporter of gold.

PMMC is a limited liability company operating under the Companies’ code, with the Government of Ghana as the sole shareholder.

Meanwhile, a tax expert, Ali Nakyea, has called for those responsible for the loss of revenue to the country to be named and punished.

According to Ali Nakyea, anyone found to have been involved in the scam, should be sanctioned, and that efforts should be made to recover the lost funds.

“Illicit financial flow is not only from trade mis-pricing - bribery and corruption is also a source. If you bring in items valued at one million dolars and falsify the documents to read 300,000, we are losing a tax element there. This is why the paperless system is welcome because you can’t falsify a document as there aren’t documents,” he said.

“We have to make sure that any person found culpable does not stay in there. I believe in finding where the loss is, recovering the money and punishing the person. We need to recover first before we punish. We should just name and shame. We need to name, recover and punish; and these three make it shameful.”

“The various causes of illicit financial flow, trade mis-pricing, bribery and corruption and transfer pricing, are areas we should pay attention to so that we get enough to ensure that our tax system works…If the report is now out, I will be interested in how they can follow up and make sure we receive these monies. If indeed the gold moved out then we should get the compensation and the payment. ”

Ali Nakyea expressed his frustration with the apparent lack of records detailing the country’s gold exports.

Anthony T. K. Nelson, a staff with the National Trust Holding Company (NTHC) shared the frustration of the tax expert and anti-corruption and illicit financial flow crusader. “The reason is our people don't value detailed records for economic usage and for informed decisions .... And who watches the regulator and the other regulator and the next regulator that they are supposed to be doing the right thing”, he shared.

“The educated ones are taking undue advantage of the disorganized system and misusing the trust of the chunk of ignorant masses....

“The human attitude factor is our problem as Africans... The systems and laws would be put in place however, if a man determines to beat the system, especially those managing the system to favour their course...

Ali Nakyea believes we can still do a lot to effect the bad systems in place by voicing the bad and evil doings of the civil and public servants, politicians, private businesses and the social workers.

Philip Doe, an ardent supporter of ‘Stop the Bleeding Now’ campaign, has said, “Until our selfish interests are set aside, we can't fight this epidemic of corruption in this dear country of ours.
We become quiet over serious scandals of corruption when our "preferred" party is in power but complain in silence. It's about time we put our party colors aside and fight for the betterment of our next generation.

Ali Nakyea, who supported his assertion added that, “It is high time our technocrats and professionals get serious about not being partisan and saying it as it is so we can move the nation forward.

“One of the biggest challenges I see is that most of our technocrats and professionals have become so fully engrossed in politics that now even when they speak, people read their political coloration rather than listening to what they are saying which will be of benefit to the nation. Sad indeed.

“My call is this on "Going back to basics", that is technocrats and professionals should remember their allegiance to their professional codes and ethics and deliver to Mother Ghana, nothing but the best advice.”

Philip Doe added that, “Society became very corrupted when politics was introduced in our tertiary institutions, making students think the only way to make it after school, is through politics. They end up throwing their professional ethics to the dogs all in the name of survival through politics

“The pastors’ professors’ teachers and people of good standings have thrown away their integrity and are embracing politics, diving deeper into partisan politics.

“You see pastors using the pulpits to campaign for their preferred political party, lecturers, and teachers doing same. How can they fight corruption when their party wins power and are engaged in the act of corruption, he quizzed.

 Ace investigative journalist, Manasseh Azure also shared his frustrations after the news broke out that the Metropolitan, Municipal and District Assemblies in the Northern Region are to pay each GHC5,000 to support the expenses of the President’s three day tour of the region last week, a directive later reversed by the Minister of Local Government and Rural Development, stressing ‘this nonsense ought to stop.’

“Some of these assemblies cannot fuel their vehicles. Toilet roll is a luxury in their toilets. After forcing contracts on them and deducting the money at source, you still want them to pay these unreasonable charges.”

He questioned the generality of the said contribution, “It is obvious the president will go to only a handful of districts so why should every district pay?

“What will this money be used for? And who will account for it? And how will the accounting be done? It's too early to start messing up this way. Why charge the already impoverished districts when the Office of the President has a budget for its activities”, he queried further.

Admittedly, Ali Nakyea who is also a lecturer said, he has complained about these kind of groups way back in Legon (University of Ghana). “Even now I still caution my students that it is high time they developed minds of their own rather than belonging to all manner of groups

“We need more think-tanks in the nature of IMANI, ACEP, Stop The Bleeding Campaign, Occupy Ghana, ISODEC, GII, Tax Justice Network, just to mention a few to call government to order and be providing alternative solutions to the challenges we identify.”

 Vitus Azeem, the former boss of Ghana Integrity Initiative also revealed that, there are tax havens in Ghana. He mentioned that, it is surprising that all the tax collected in the Ashanti Region is just equal to the total collection of the Spintex (Accra) Medium Tax Office.

But, politicians will say, don't touch the region. He called that a ‘political expediency’.

Vitus Azeem added that, there are also partisan changes at the GRA and called on all anti-corruption bodies and journalist to investigate the situation since it is pathetic and dangerous to our economy.

Ali Nakyea confirmed the revelation and noted further that he has information which shows that even three more tax administration districts - Legon, Osu and Kaneshie,(all in Accra) individually collect more than the whole Ashanti Region in taxes.

He is worried that, what is the difference between Abossey Okai and Suame Magazine such that the collections should vary that significantly? What is the difference between Osu and Adum such that the variation should be that wide?

The tax expert emphasized that, these abnormal records of revenue collection have been talked at various seminars and lectures but no effective and responsive measures have been put in place to correct the abnormality and unfairness.