A recent study has revealed that Ghana is losing millions of cedis through illicit financial flows (IFFs) in the gold mining sector.
The study, dubbed “increasing domestic revenue mobilisation by promoting corporate, natural resource and professional integrity”, was conducted with support from the Integrated Social Development Centre (ISODEC) in collaboration with the Global Financial Integrity.
Among others, the report — which looked at three years of gold export from Ghana covering a number of host mining communities, including Telensi, Kenyasi, Obuasi and Tarkwa — found that the lack of transparency and accountability in the sector had led to significant revenue losses.
It found that there was the potential for illicit financial flows to happen in any part of the value and supply chains of mining. The research team, after over two months of gathering data on the sector in its preliminary findings, also identified the movement of politicians and other influential individuals as a major challenge affecting the sector.
Findings
These were made known during a validation workshop organised by ISODEC and Global Financial Integrity in Accra. The validation meeting of gold mining supply chain and illicit financial flow mappings in Ghana, and its effects on domestic resource mobilisation was aimed at providing a platform for further dialogue, debate and validation of the research outcomes, with a focus on shaping practical and actionable recommendations to maximise revenue mobilisation in the extractive sector, especially gold.
Presenting the draft report, an illicit financial flows consultant, Bishop Akolgo, said “Ghana has been mining gold for decades, but we have not gained much from it. The sector is plagued by illicit financial flows which are depriving the country of the much-needed revenue”.
The study identified several loopholes in the sector, including the lack of disclosure of beneficial ownership, transfer pricing and trade misinvoicing. The report recommended that the government took immediate action to address the issues, including the establishment of a beneficial ownership registry, strengthening tax laws and improving transparency in the sector.
“The impact of illicit financial flows is not abstract; it affects all Ghanaians,” Bishop Akolglo said.
Growing concerns
The Executive Director of ISODEC, Sam Salifu Danse, emphasised the importance of the gold mining sector to Ghana’s economy, saying it contributed significantly to government revenues, merchandise exports and employment.
He, however, stressed that there were ongoing concerns about whether the country was maximising the potential benefits from the natural resource. Mr Danse explained that the research study aimed to shed light on the dynamics of domestic resource mobilisation in the gold mining sector, and to identify opportunities for improving revenue generation and allocation.
Impact of IFFs
A policy analyst at Global Financial Integrity, West Africa, Maxwell Kpebesaan Kuu-ire, acknowledged ISODEC’s extensive network and commitment to promoting social justice, and emphasised the importance of collaboration in addressing the issue of illicit financial flows.
He emphasised that addressing illicit financial flows in the gold mining sector was crucial for Ghana’s development and prosperity. He urged stakeholders to work together to fight illicit financial flows and ensure that Ghana’s resources were used for the benefit of all citizens.
Following the presentation of the preliminary findings and recommendations, the participants who validated it in the sector called for urgent action to address the issue of illicit financial flows in the sector.
Source: graphic.com.gh
