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The National Assayer – PMMC’s role in providing revenue assurance to government on gold exports

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Nana Awuah,MD (PMMC)

On 26th January, 2022, www.myjoyonline.com published a story captioned “Ghana loses over $2bn in taxes to undervaluation of gold exports”. According to the story, these losses were identified through a research by a consortium including the Institute for Statistical, Social and Economic Research (ISSER). It is observed that the research, which covered 2011 to 2017, does not disclose which sector it focused on – large scale or small scale. This distinction is important because the two have separate tax regimes.

Undervaluation of Gold

Upon reading the news story, the press release by the research team and the presentation of the research findings, it is difficult to ascertain the basis for the claim of undervaluation.

Undervaluation of a commodity such as gold presupposes that there is a true standard value against which the commodity can be measured. The standard value of gold is easily verifiable. Within the international market, bodies such as the London Metal Exchange (LME) are reputed indicators of the global market price for gold. It is important to mention that the prices as set by the LME on a daily basis are for refined gold of 99.99 per cent 24 karats purity. Gold exported from Ghana are unrefined and hence would not attract the same price as set by the LME.

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Within the precious minerals industry, it is trite knowledge that gold values are dependent on weight and purity. Hence, a kilo of unrefined gold would not have the same price as a kilo of refined gold. Similarly, two kilos of 14karats gold could be less expensive than a kilo of 22 karats gold. Given that gold exported from Ghana are in unrefined doré form with a purity range of about 21 carats to 22.5 karats, without an independent valuation exercise, it will be misleading to say that such gold doré has been undervalued using the prevailing world market price as benchmark.

Valuation of Gold

As earlier indicated, two variables go into the determination of the value of gold – weight and purity. Measuring the weight, which is done with a scale, is quite easy and straightforward. Determining the purity of gold is through a scientific process known as assay.

There are various methods of assay – non-destructive methods such as X-ray Fluorescence (XRF), Specific Gravity or Density, and Ultrasonic Testing; and the destructive method which includes the Cupellation (Fire Assay).

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Once the weight and purity are identified, a calculation is done using the world market price to ascertain the true estimated value of the gold doré.

From the foregoing, therefore, it is deductible that to substantiate a claim of undervaluation, it is important to know the weight and purity of what was exported as well as the then prevailing world market price of gold. Undervaluation may arise where there is a false declaration of the weight and purity of the gold doré which is being exported. The report, however, does not indicate whether there were any such findings of false declarations of weight and purity.

As earlier mentioned the research fails to disclose which sector of the gold mining industry it focused on – small scale or large scale. This is important because the two have distinct tax regimes. Whereas the large scale sector has a tax regime which includes royalties and corporate tax, the small scale sector presently attracts a withholding tax of 1.5 per cent on gold exports.

PMMC’s Mandate as National Assayer

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In 2017, President Akufo-Addo directed that government identifies a way to independently verify gold exports in order to ensure that the country is obtaining maximum revenue for this precious mineral resource. Consequently, under the leadership of Hon. Kiston Akomeng Kissi, PMMC Board Chairman and driven by Hon. Kwadjo Opare-Hammond (may his soul rest in peace), then Managing Director of PMMC, stakeholder engagements began towards the implementation of this directive. There were several engagements with the Ghana Chamber of Mines and the Association of Gold Exporters, now Chamber of Bullion Traders, Ghana to agree on modalities for the smooth take-off of the National Assay Programme. Eventually, with the support of the Vice President and the then Sector Minister, in February 2018, PMMC officially commenced operations as the National Assayer with the mandate to assay all gold earmarked for export from Ghana.

The National Assay Laboratory located at the Kotoka International Airport, from where PMMC carries on its operations was set up through the support of the Minerals Commission with funding from the World Bank. The Assay Lab is fitted with three non-destructive assay equipment – an XRF Machine, a Specific Gravity equipment and Ultrasonic Testing device.

PMMC’s mandate as National Assayer covers both the small scale and large scale mining sectors. As National Assayer, PMMC independently verifies the weight and purity of the gold doré being exported in order to ascertain its value. The value as determined by PMMC enables the Ghana Revenue Authority (GRA) to exact the requisite taxes such as the 1.5 per cent withholding tax on the gold doré before export.

For the small scale sector, after the assay analysis by PMMC, the export is managed through the ICUMS systems with close supervision by the Central Bank. Exports are done by duly licensed export companies who are required to repatriate 80 per cent of the proceeds back to Ghana within thirty (30) days. Failure to show proof of repatriation of export proceeds comes with sanctions such as prevention from doing further exports and upon persistent breach, revocation of export licence and possible prosecution.

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For the large scale sector, whose tax regime is entirely different from that of the small scale, PMMC has field officers who observe the smelting of gold in their gold rooms. From the gold room, the weight of the bars are recorded and samples taken. The samples are transported via helicopter to the National Assay Lab where PMMC conducts the assay analysis to determine the purity and by extension the values of the gold doré which are to be exported. This provides an independent verification of the export values thereby providing revenue assurance to government. Periodic reconciliations are carried out between PMMC and the large scale mining companies represented by the Ghana Chamber of Mines.

It is worth mentioning that since the commencement of the Domestic Gold Purchase Programme by the Bank of Ghana in June 2021, PMMC as National Assayer has been providing this essential service to the Central Bank by independently verifying the weight, purity and by extension value of gold supplied for purchase.

Digitalisation of National Assay Laboratory

Since the commencement of the National Assay Programme in 2018, there have been consistent efforts to make improvements so as to ensure maximum efficiency of the programme. In 2021, again under the leadership of Hon. Kissi, with support from the Sector Minister, Hon. Samuel A. Jinapor and driven by the present author, the National Assay Programme was digitalised. Digitalisation now made it possible to generate assay certificates which bore unique security features making it difficult to forge to facilitate the dubious elaborate schemes of gold scammers.

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Digitalisation has also now made it possible to monitor in real time, gold exports passing through the National Assay Laboratory. It has improved collation of timely data on export figures and revenues in order to aid effective national economic planning.

The digitalised National Assay Lab, which will be officially launched this month, will be open and accessible to key stakeholders including the President as the Constitutional Trustee of Ghana’s mineral resources, the Vice President as Head of Economic Management Team, the Minister of Lands and Natural Resources, the Minister of Finance, the Governor of the Bank of Ghana, and the Commissioner General of the Ghana Revenue Authority. 

PMMC continues to find ways to improve upon the execution of this important mandate which is critical for securing the much-needed revenue from the precious minerals industry for national development.

By Nana Akwasi Awuah, Managing Director, Precious Minerals Marketing Company (PMMC)

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Press freedom & the bearded goat

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journalists covering assignment

THE journalist is a hunter. He goes after human rats and grasscutters personified, matters about whom he can salt and spice and present as news. The fatter and juicier the catch, the better, because sensation is essentially our cup of tea.

Sikaman Palava
Sikaman Palava

Our job is to sell news and sell it in grand style.

Because the journalist is a hunter and is created with a special kind of nose for sniffing out news, he is usually not welcome in many places. He is seen as someone who has been born to make people uncomfortable.

The problem is that some people don’t want things written about them even if it is promotional and favourable. When it entails publishing their pictures alongside the story, they are doubly scared.

“Please, don’t use my picture. People will think I’ve got money and come for loan,” someone told me.

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Anyhow, journalists are seen as intruders, undesirables, born with plenty of okro in the mouth; maybe some also in the nose. Some of my friends are no longer too close because they fear I’d give them full coverage in the Sikaman Palava column. Ha ha ha! What a funny world!

Well, people like my Uncle, Sir Kofi Jogolo, my former classmate and born-mathematician, Kwame Korkorti, and ex-football star cum human-salamander Kofi Kokotako don’t mind featuring in the hilarious inches of this column. Kofi Owuo alias Death By Poverty is one personality who has to be mentioned in this palaver.

These are people who are going to live long, primarily because they see the world as one big ball of fun. When Kwame Korkorti was told that his dear mother was dead at home, he smiled and asked the bearer of the message whether his mother had cooked the afternoon meal before claiming she was dead. Until her death, Korkorti ate his lunch at his mother’s end.

When my Uncle Kofi Jogolo was picked and lost 1,500 dollars and a good amount of Sikaman currency, he didn’t lament the loss. Instead he was amused. In fact, he was almost glad about it, because he grinned from ear to ear, stroked his delicate moustache and congratulated the thief, adding that “He is smarter than I am.” Yeah, Jogolo is the man who employs a Swedish barber to trim his moustache.

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And when Kofi Kokotako was unemployed and was nearly hit by an articulated truck, he called the driver a fool. “The idiot should have killed me,” he said to me. “Didn’t he know I was unemployed and suffering?”

Today, Kokotako is employed as a Reverend and is not doing badly at all. Thanks to the regular silver collection.

And what about Kofi Owuo, the celebrated poor man. His wife left him not because he was poor, but because he swore in front of her that he would never prosper.

The following dawn the wife packed bag and baggage and went back to her parents and told them all about her husband’s alliance with poverty. Her parents were bewildered and called the alliance unholy. They had no option than to send back Owuo’s drinks to end the marriage.

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Kofi Owuo alias Death By Poverty did not contest the issue. He was more engrossed thinking about how to become poorer than to contest what he called a frivolous matter. The wife could go to hell, he said. These are people longevity smiles upon. Nothing worries them.

Getting back to talking about journalists. I’d say that anywhere there is journalism, the issue of press freedom is not too far away. Is the press free? That’s one question foreigners want answer to when they are on visit.

Well, journalists celebrate a yearly WORLD PRESS FREEDOM DAY to drum home the idea of press freedom as a very important thing in the practice of journalism.

This year’s was celebrated almost a fortnight ago but people didn’t see much of us because we are normally not good celebrants. We should have mounted a float to roam the entire capital, dancing asaboni to brass band music just like PTC did recently.

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Although journalists are known to be very good dancers because they walk very much, on that day, they were all busy writing. It was the Minister of Information, Mr Kofi Totobi Quakyi who saved the day by addressing a forum organised to mark the day.

He is a man I’ve always admired since his radical university days. He spoke much on press freedom, cautioning the press not to abuse the freedom granted by the Fourth Republican constitution, but to use it for the progress of society.

Well, press freedom has been defined by many journalists as the freedom to ‘write nonsense’. This definition is not quite accurate. I asked one staff reporter to define press freedom. It took him fifteen minutes to put up something.

“Press freedom is the freedom that is enjoyed by the press that enables journalists to publish or broadcast any kind of material so long as it is absolutely true, is not libelous and slanderous, and is not against the national interest.”

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I gave him eight out of 10, a straight A. I guess every journalist is old enough to know that certain things he or she writes is for or against the national interest. We certainly must guard against writing against the national interest; that is very important.

There is also the question of criticising government. The government can be criticized, so long as the criticisms are genuine and the President and his ministers are not insulted and called names. Let us criticize, but let us do it decently so that the journalistic profession can be revered, and its nobility acknowledged. We are not war mongers, are we?

One area in which journalists are not spoken well of is the complaint that they misquote people. Journalists sometimes misquote people, but in four out of five complaints it turns out that nobody is misquoted after all.

When we interview people they say things unreservedly and we publish unreservedly. When the publication is out and their friends or superiors read it and accuse them of having said too much to the press, then they start claiming they were misquoted.

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We have encountered these ‘misquotation palaver’ every now and then and reporters are usually accused of this transgression. However, when they bring out their note-books or recorders, it is realised that they wrote nothing out of the way. “Book no lie”.

My advice to people who deal with the press is that if they do not want anything written, they shouldn’t say it. What they want to say is OFF-RECORD, then of course, there is no reason to say it. When you say it, you’re taking a risk. In that instance, you can’t also claim to have been misquoted or words put into your mouth.

And it isn’t every journalist who would be circumspect in matters that are supposed to be off-record, because journalists often want to be as sensational as possible to make their stories saleable. So say just what you want to see published and you won’t later regret it and claim you were misquoted.

Well, I’m not holding brief for journalists, because a few of us are notorious for colouring our reports sometimes sand-papering the words so much that they look very bright in front of readers.

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As I once said, when the police tells one such notorious pressman that the thief stole a brown goat, the pressman would want to know whether the goat was bearded. Of course, the police would say ‘Yes’.

However, in the press report, it appears, “A gang of notorious goat-thieves were apprehended in the early hours of yesterday. In the car in which they were riding was a brownish-red goat having a long beard. Upon further examination, it was realised that the goat also had a greyish moustache.”

When the story appears, the police are naturally disturbed. A single thief turns out to be a gang of thieves. The goat also becomes a chameleon and changes colour to brownish-red. And a moustacheless goat overnight wears a greyish moustache whether you like it or not. Luckily the journalist does not add that the moustache was trimmed by a Swedish barber.

Yes, we have a few of such mischief-creating, chronically notorious journalists. But they are one in a hundred. In any case, we make the world. And we shall always do our best to make it a happy place to live in.

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 This article was first publish on Saturday, May, 20, 1995

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Mindset change: The Greater Works factor- Part 2

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When I hear of people who are of the opinion that they cannot make it in life unless they travel abroad, l become sad.  

Whenever I see on TV, news of people, that is migrants who have drowned in the Mediterranean Sea, while attempting to cross to Europe, l become filled with sadness and then anger. 

The underlying factor is desperation born out of loss of hope, in life.  When an individual tends to believe that his only hope of making it in life is to travel abroad, the risk of dying at sea, does not deter him or her. 

The role of some pastors on shaping the mindset of people, especially the youth, leaves much to be desired.  You hear them declaring on various media platforms how they can pray for you to get a visa to travel abroad, instead of encouraging them to find something to do to improve their lives as the Bible teaches that God will bless the work of their hands.

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The GREATER WORKS CONFERENCE is geared towards renewing the minds of people with a specific focus on people of African descent to rid themselves of the negative perception of lack of capacity to excel in life.  

Pastor Mensa Otabil believes that every human being, no matter the skin colour, was created in the exact image of God and therefore has the capacity to do exploits. 

The whiteman was not created in the image of God while the Blackman was created in the image of something other than God.  The Black person therefore can achieve whatever the whiteman can achieve.

 The development in terms of industrialisation that is lacking which has generated unemployment for the youth, is due to lack of effective leadership.  The lack of moral integrity in society, is what is causing the lack of job opportunities, which is as a result of corrupt acts which drive away private investment.

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A culture of inferiority complex exists which needs to be dealt with, so the African can develop the self worth necessary for personal development which can then result in capacity deployment to avhieve personal goals. 

Success in life begins with the individual’s recognition that he or she is capable of achieving the dreams he or she has conceived in his or her mind.  The Bible teaches that the fear of the Lord is the beginning of wisdom, and the knowledge of the holy is understanding according to Proverbs 9:10. 

Christianity was the driving force behind the development of Europe because no society can sustain development without high moral values.  GREATER WORKS therefore is a deliberate project to shape the minds of people, especially the youth, who will become the leaders of our future, to prioritise morality in their daily lives.

This is the only way to see a massive transformation in every aspect of our lives as Ghanaians and Africans in Ghana and the rest of the continent.

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Since the inception of the GREATOR WORKS CONFERENCE, it has made a lot of impact in the lives of many people from the youth up to the senior citizens level.  I recall the testimony of a church member who was motivated and pursued higher education and became one of the youngest Chartered Accountants in this country.  Year after year, the impact of the conference has been enormous and lives in Ghana and across the continent, are being transformed. 

Black people have started regaining their self confidence and the youth have started getting into areas that previously were considered out of bounds.  At a personal level, certain ideas that some years ago, l would have not dreamt about suddenly has become realistic dreams. 

The Christian lifestyle has impacted on my children and those close to me.  Mindset change starts with one individual, then another and then gradually it spreads like a viral infection until a critical mass is attained and them a massive impact.  There is hope for the future.

By Laud Kissi-Mensah

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