When in November 2018 I got the news that Ghana was to outdoor the first hallmarked gold bar that has been produced and processed in the country, I felt like the happiest bloke on the planet.
Finally, we can at least start adding some value to the gold we have been producing for the past 100 years. This would definitely decrease the rate of unemployment and increase income on the other end, even foreign exchange. This is good news; Right?
Then two days later, the Precious Mineral Marketing Company (PMMC) rebuffed it as bogus gold certification. Why? Because it was to be done by the Ghana Standards Authority (GSA), who according to PMMC, doesn’t have the mandate to certify minerals. It then dawned on me, that the turf war between these two which has indeed caused the nation to lose $25bn between 2010 and 2015, according to a Bank of Ghana report, is unabated.
According to experts in this area of specialisation, PMMC is mandated to certify dore (that is unrefined gold), and what GSA is certifying is bullion, (which is gold refined to 24 karats), so technically, these are different products of gold. I don’t want us to be confused trying to pinpoint the dore-bullion dichotomy, but when I look at it from a nationalist point of view, I hear Rodney King’s voice afresh after he survived the 90’s act of police brutality in Los Angeles.
I hear him saying “Can we all just get along”. But no, in this instance we can’t get along, each entity is established by an act with a mandate. And to me, that is where all the problems are. You see, on paper, Ghana has the best legal framework on natural resources in the sub-Saharan region. In fact, other countries have taken our natural resource laws, modified them to suit their peculiar situations and are now performing with them, even better than we currently do. But we are stack with a lot of semi-autonomous natural resources allied regulators, so much so numerous that, their mandates overlap and sometimes are subtly duplicated.
Just look at this. MenzGold had a licence to purchase gold for export from PMMC. When she realized that the licence from PMMC would not fit in very well with her business model of subsequently introducing derivatives and operate in the prevailing grey area, she got another one from the Ghana Minerals Commission: and that is the genesis of the MenzGold muddle in my opinion. To no avail, PMMC, whose accounting books, by the way, have been awfully red for years, argued that the Ghana Minerals Commission has overstretched her mandate. I can sympathize with PMMC for this concern: why are other agencies always taking over what PMMC believes she is mandated to do? RIP Hon. Opare Hammond.
For example, I don’t think it would make sense if it is possible to get a driver’s licence from DVLA and get another one from a similarly different authority in Ghana if one feels like it. But that’s what MenzGold did. So to me and in this instance, there appears to be some degree of duplication or overlap of mandates by the aforementioned regulatory or licensing agencies. It nonetheless smacks of competition between them, instead of collaboration. But we cannot fault them alone. All these confusions ping on the laws that established the respective agencies. Some of these we are operating within Ghana have out-lived their effectual season and need to be reviewed to reflect the challenges of the twenty-first century.
For example, the Integrated Bauxite Authority Act has a specific mandate within the natural resource spectrum, but I think its mandate may easily overlap with others in the very near future.
That’s why I believe the solution to the MenzGold Muddle lies in the domain of our lawmakers. Lawmakers all around the world, take issues of the day, especially those that are directly affecting the people of their constituencies, and debate them in the house, and couch requisite legislation for promulgation. I recall the Late Hon. J.H. Mensah of blessed memory, making a case with a ball of kenkey in his hand on the floor of the house; that’s how things were. Similarly, as a reaction to a number of major corporate scandals by Enron and WorldCom, the Sarbanes-Oxley Act of 2002 (SOX) came into existence.
Undeniably, Ghana’s Parliamentarians maybe overwhelmed and understaffed, but I think the Menzgold saga is a national financial disaster equally begging for an immediate review of our laws if not a specific bill. I believe every MP knows someone possibly in his or her constituency, who has been adversely affected by the developments at MenzGold and therefore must be seen to show some sincere concern, empathy and action.
Above and beyond, it is the duplication of mandates in our regulatory system that made it difficult for the regulators, SEC, PMMC and even BOG, to act swiftly when the MenzGold story started. As a result, MenzGold’s virtual goodwill and fame snowballed and seduced vulnerable citizens who are now on edge on a daily basis, and not knowing what to do next to get their investments back. However, since the contract between MenzGold and her customers doesn’t involve government, I don’t see how the government would take ownership of MenzGold’s liabilities and pay them back, especially so, when MenzGold operated in a grey area and registered with neither the Bank of Ghana nor SEC. I, however, believe that a class action suit by the affected customers would help salvage a modicum of their investments when the veil of corporation is lifted with an appropriate argument. SEC simply directed MenzGold not to issue out certificates to new customers until further notice, and this should not affect the dividends and respective principals of the old customers: so MenzGold must not hold her faithful clients to ransom.
Now, there is one institution we have neglected in Ghana whose inactivity may be contributing to all this chaos, and that is the Geological Survey. The Geological Survey, if made to operate at even half of its capacity could contribute immensely in resolving all these national issues ranging from galamsey, through flooding and natural disasters to duplication of mandate.
Instead of certain agencies being an office or a department of the Geological Survey to achieve this, we have made them semi-autonomous, with duplicating and overlapping mandates and fomenting competition and confusion in the process. For example, the Minerals Commission, in my opinion, could better remain a department of the Geological Survey for seamless performance and optimum collaboration. This may sound excessively controversial or farfetched, but if you ask me, I would say let’s review all our natural resource laws and thereafter restructure the regulators in this wise: let’s put PMMC, Minerals Commission, Petroleum Commission, GNPC, IBA etc as departments under the Ghana Geological Survey, or Ghana Geoscience for broader connotation. This would organically harmonize our natural resource sector and put Ghana back into the basket of preferred mining investment destination. The ensuing seamless collaboration inherent in this configuration would make it possible for us to be able to organically generate capital and seamlessly explore areas of economic mineralisation, demarcate them and appropriately assign them to either Large Scale Miners and Small-Scale Miners. Licensing would be less bureaucratic without overlapping competition or contest, and it would make it easier to engage in the mining business in the country because natural resource licenses would be emanating from a single source akin to the DVLA allegory above. Had such a structure been in place, it would have been impossible for Menzgold to abandon her license with PMMC and switch to a license from the Minerals Commission, and there would have been no ambiguity in who the substantive licensing authority is. The appropriate regulator would have responded swiftly to forestall this MenzGold national mishap.
To be a preferred mining investment destination can also attract the right investment, which would translate into more mine discoveries, increase employment and increase revenue with significant positive socio-economic multiplier effects. His Excellency Nana Addo-Dankwa Akuffo Addo is slated in March as the keynote speaker at Indaba 2019. This is yet another great opportunity for Ghana to showcase our superior mining prowess and recapture or consolidate our second position on the continent which is collectively being threatened by Mali and Sudan. It is therefore just apt to see that the ban on small scale mining has been lifted, and as we commend ourselves for this achievement, let's sanitize our mineral regulatory frameworks. Our lawmakers must, therefore, get to work even if reviewing all these laws and restructuring all these regulatory bodies look so daunting a task.
They must tackle this issue with the same fervour they exhibit when it comes to car loans and emoluments for MPs. As for the unfortunate victims of MenzGold, I would say I sympathize with you but monitor your MPs, if they are not pulling their weights on this particular case to ameliorate the effect of your Menzgold-pain whether now or for posterity, let your thumbs retaliate in 2020.
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