‘Illicit financial flows in gold sector must be checked’

 The government has been called upon to take im­mediate action to address the issue of illegal gold mining and smuggling, which is resulting in Illicit Financial Flows (IFFs).

Speaking at the launch of a report on Illicit Financial Flows in the gold sector, a representative from the Ministry of Lands and Natural Resources, Mr Benjamin Aryee, emphasised the need for urgent action to address the issue.

“Illicit Financial Flows are not acceptable, and given the research indication that it appears to be growing, it’s a matter of concern for us,” Mr Aryee said.

He bemoaned the informal nature of the gold sector, saying that it posed a major challenge in addressing Illicit Financial Flows in the country.

The informal nature of the sector, he stated, if not addressed properly, could hinder the fight against IFFs.

“Unfortunately, we have a very large informal sector as far as the gold sector is concerned. And until we can address that, it will be very difficult to manage the Illicit Flows associated with it,” he noted.

“Financial flows play a vital role in driving economic activity, but their impact can be a double-edged sword. If misdirected, financial flows can have detrimental conse­quences, whereas proper direction can yield significant benefits, “he added.

To address this, Mr Aryee called for increased transparency and for­malisation of the gold sector as well as strengthened customs and border control.

Emphasising the need for collec­tive responsibility to address illegal mining, Mr Aryee also stressed the need for collaboration between gov­ernment agencies and civil society organisations to tackle the menace.

Mr Samson Danse, Executive Director of ISODEC, in a remark said, “This report comes at a critical time when bold action and part­nerships are necessary to tackle systemic issues, ensuring that the wealth generated from our natural resources benefits all Ghanaians.”

He, therefore, urged the stake­holders to take the report’s launch as an opportunity to engage in constructive dialogue in bringing out measures to address the challenges facing the industry.

Mr Danse indicated that the report was prepared by Integrated Social Development Cooperation (ISODEC) at the request of Global Financial Integrity (GFI) and funded by Norwegian Agency for Develop­ment Cooperation (NORAD).

Additionally, he outlined that it identified significant risks of Illicit Financial Flows at various stages of the gold supply chain, including ex­traction, processing, transportation, and marketing.

According to him, the extractive stage was plagued by false reporting of gold quantities, corruption, and trade misinvoicing. The processing stage is also vulnerable to smug­gling, gold laundering, and trade misinvoicing.

“The report noted that the transportation stage is characterised by theft, trade misinvoicing, and falsification of transportation doc­uments. The marketing and sales stage is also marked by bribery, tax evasion, profit shifting, and smug­gling,” Mr Danse.

To bridge these gaps, ISODEC recommended that the government strengthened customs and border control, collaborate with regional bodies to track and prevent gold smuggling, and introduce automat­ed transaction monitoring systems to track gold sales and marketing transactions.

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