A Washington DC-based non-governmental organisation (NGO) reports from its research findings that hard currency strapped Ghana lost a colossal US$3.86 billion to import and export duty fraud at our ports and borders in the 10-year period, 2002 to 2011. According to Global Financial Integrity, a research and advocacy NGO, imports under-invoicing is used to smuggle money into the country, while exports under-invoicing is used to illegally transfer funds out.
The GFI said that the trade frauds at our ports and borders averaged US$368 million a year, and amounted to a loss of about11 percent of total government revenue over the 10 years under reference. Funded by the Danish Ministry of Foreign Affairs, the study covered four other African countries, of which, Uganda, Mozambique, scored high losses than Ghana, while the other two - Kenya and Tanzania - suffered lower losses.
Lamented the Danish Trade and Development Co-operation Minister Mogens Lensen: "It is deeply disconcerting that illicit financial flows are taking such a serious toll on the economies of Ghana, Uganda, Mzambique, Kenya and Tanzania. Denmark has, for several years, supported Ghana, Kenya, Mozambique, Tanzania and Uganda in fighting poverty and promoting economic growth and job-creation.
"These efforts are clearly at risk of being undermined by fraudulent trade transactions, which rob the people ... of funds that could otherwise have been used for investments in infrastructure, schools, hospitals, and other much-needed public services. I hope the study can help the governments in their efforts to curb illicit financial flows."
At least, US$368 million lost in a year for 10 consecutive years? In a country where the government recently borrowed US$25 million from a bank to order furniture for Job 600, so that MPs could have decent offices to work in? The Chronicle hopes that after it broke the story yesterday morning, the relevant ministries and agencies have begun consultations on how to stem such an avoidable hemorrhage on the Consolidated Fund.
We hope they broached the need to get in touch with the GFI and Danish Ministry of Trade and Development Cooperation for hints on how to tackle the problem. Once they have put a figure on the loss, they know the loopholes that ought to be plugged to forestall this daylight robbery of our tax money. The Chronicle will urge the government to bring down such people on contract for about a year to sanitise our ports especially; for, in all probability, up to 80 percent of the losses occur at the two ports.
In rationalising the just-ended Akosombo National Economic Forum, Finance Minister Seth Terkper said it was necessary to chart a way forward on how to fill gaps in our finances, following Ghana's classification as a lower income country, which classification bars us from concessionary loans and grants. Ending such continuing theft of public funds through our ports and borders could be one such way forward.
In our search for financial stability, let us not bar any holds.