NPP Govt’s ‘Gold-For-Oil’ Policy smells of money/gold laundering – Energy Expert

myxyzonline.comMar 17, 2023 3:28 PM

An Energy Expert, Dr. Kwame Ampofo, says the NPP government’s ‘Gold-For-Oil’ (GFO) policy is no different from a money laundering scheme except that in this case, it is a gold laundering one.

In a write up in today’s edition of the ‘Daily Post’, he said the policy appears to have been designed to conceal the origins of the gold purchased for the scheme.

“In that regard, there is no mechanism to identify and reject gold produced from illegal sources (galamsey). So, in effect, the scheme appears to be mimicking the methods used by drug traffickers to make funds obtained from illegal activities appear legitimate in the end.

The Energy expert, who is a former MP of South Dayi and a Former Chief Executive of the Tema Oil Refinery said the scheme perfectly inures to the benefit of the illegal “galamsey” industry as the arrangement could be used to provide a safe and secured passage through government institutions such as the Central Bank (Bank of Ghana), the PMMC and others of illegally mined Ghanaian gold to be offloaded onto the international market and monies accruing from them laundered by using them to purchase petroleum products for distribution and sale to consumers in Ghana.

“This way, the unsuspecting Ghanaian consumer of petroleum products has actually been turned into a market for patronizing the proceeds of his own gold, stolen from him by unscrupulous cartel of galamseyers most of whom are NPP operatives and people in government (including the Jubilee House), as recently declared by no less a person than Prof. Kwabena Frimpong-Boateng, the former Minister for Environment, Science & Technology and Innovation, in an exclusive interview granted on March 10, 2023, to GBC News on the missing 500 excavators”, he says.

According to the Energy expert, there are so many unknowns and questions about the scheme that it is difficult to fathom the real motive behind the scheme and who the real beneficiaries are.

“Indeed, many critical issues remain unexplained. For example, the following questions remain unclear: What quantities of gold are purchased on the local market for each consignment of fuels? What are the sources of the gold purchased in Ghana? At what price is the gold purchased in Ghana? Who is the offshore buyer of the gold? What are the actual quantities of gold sold offshore and what is the revenue obtained from that sale? What is the offshore sales price of the gold? What is the barter rate of exchange of gold for fuel? Specifically, for example, how much gold was given up in exchange for the 40,000 metric tons of products procured in the first consignment that was delivered in February? What is the purchase price of the product? Why is government unwilling to put this Gold-for-oil “agreement” before parliament? What are the sources of supply of the products?” Dr. Kwame Ampofo asked.

He recalled that while the Vice-President, Dr. Bawumia, claimed that the first consignment of products was bought from the United Arab Emirates (UAE), it turned out that it actually came from the Russian Oil Trading Company (OTC) called Lethasco. According to him, such serious contradictions give room for suspicion.

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Dr. Ampofo said the government’s claim that the GFO policy is a barter arrangement cannot be true because while barter trade is an act of trading goods or services between two or more parties without the use of money the scheme presented by the government as a barter trade involves a number of stages where money (cash) transfers are involved and also involves a multiplicity of intermediary actors or agents.

“Clearly, gold is never exchanged, directly, for petroleum products held by a petroleum dealer, but rather, the products are bought with dollars (obtained from the revenue generated from the sale of the gold to a gold dealer) ” he wrote

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He further asserted that the claim by government that the GFO policy would stem the increasing depreciation of the cedi against the major currencies, tackle the dwindling foreign currency reserves, reduce the balance of payment in the economy as well as reduce the ex-pump price of petroleum products in Ghana by removing the exchange rate factor from the petroleum pricing buildup formula is an illusion.

“It is not clear how the arrangement would avoid the exchange rate factor from the pricing formula since, as indicated , the products are still bought with dollars (cash), just as in the normal oil trading practices hitherto undertaken by the Oil Trading Companies (OTCs) and the Bulk Distribution Companies (BDCs)”

He said this point is supported by the admission of Hon. Egyapa Mercer, Deputy Minister for Energy, during debates and questions that ensued at the time of the arrival in Ghana of the first consignment of 40,000 metric tons of products in February. The Deputy Minister argued that that consignment was paid for with cash and not gold when he was confronted with the question of how much gold was exchanged for the fuel.

According to Dr. Ampofo, if government’s main objective for this lengthy initiative is to reduce the rising prices of petroleum products on the Ghanaian market, then the conventional wisdom that has been successfully deployed over the years by all preceding governments, is to simply adjust the values of the components of the formula that constitute the price build-up to achieve desirable price levels at the pump. In that regard, he said two simple things are done;

“As a first step and a short term measure, government can reduce its taxes and levies (such as customs and excise duties, ad valorem taxes and levies) in the price build-up. In addition, what the NPP economic thinkers themselves call government’s nuisance taxes, can, and need to be removed, altogether, from the price build-up. These include the Road Fund Levy, the Sanitation and Pollution Levy, the Special Petroleum Tax and others. The above measures will reduce overall government revenue but, as the saying goes, “you cannot eat your cake and still have it”! Something must give way, in a balancing act.

“The other approach, albeit, longer term, is by getting government’s Economic Management Team to put on their thinking caps and pursue prudent economic policies that would normalize and strengthen the fundamentals of the macro-economy to shore up the value of the ailing cedi and achieve a more favorable exchange rate from the current abysmal rate of GhC12 – GhC15 to the dollar. After all, it is well known in Ghana that, “if your economic fundamentals are weak, the exchange rate will expose you”.

Source : Daily Post