16 June 2014

Ghana: Local Retention Accounts Urgent

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Following a review of its recent anti-dollarisation measures post the Senchi Declaration, the Bank of Ghana has recommended to the John Dramani Mahama administration to get the mining and oil & gas companies operating in the country to open retention accounts here.

This suggests a review of existing agreements with the mining and oil & gas companies which permits them to, in some cases, retain up 100 percent of the foreign currency from the sale of their output outside the country.

BoG's Head of Financial Stability, Dr. Benjamin Amoah, who revealed the recommendation at a news conference, said the move would help reduce the annual capital flight from the country which often leads to depreciation of the Cedi and inflation, assuring that all requests for hard currency by the companies would be met within 24 hours.

"All new retention agreements should require retention accounts to be opened and operated with domestic banks. The BoG will engage the Ghana Investment Promotion Centre, the Ghana Free Zones Board, the Minerals Commission and other stakeholders in this regard", Dr. Amoah said.

The mining and oil/gas retention accounts could either be with the BoG itself or commercial banks in the country. The BoG, Dr. Amoah added, was also recommending that all foreign exchange proceeds of government agencies be lodged with the BoG, instead of keeping them with off-shore banks.

With such irresponsibility in our financial management set up, as exemplified by these two leakages above, The Chronicle is no longer surprised that the Cedi is wobbling on crutches.

For how long have the mining sector retention accounts outside the country operated? Ten, 20 years? And in the oil & gas sector? At least three years? If these durations are true, then the Cedi should be praised as the strongest in Africa, if not the world, and not vilified as the most depreciated this year.

However, The Chronicle's greatest worry for now is how we came to this sorry pass, where with our eyes open we gleefully agreed that such huge chunks of hard currency generated out of our natural endowment be kept out of our control.

Who negotiated these agreements with the mining and oil companies? No doubt our politicians and the civil/public servants under their squeezing thumbs. Their only major area of interest must have been their individual pockets and not the national interest.

The continuing bane of Ghana, if the truth be told, is the combined Spanish Armanda of her thieving politicians and their cowed government officials, who for fear of loss of job condone all manner of atrocities against the state.

How can any sane and patriotic Ghanaian sign an agreement that allows mining and oil/gas companiesto keep most of their earnings outside Ghana? Our negotiators must have been bribed to accept pittance for the state. On top of that foreign currencies generated by government agencies are also lodged outside the country.

Though the BoG has categorised its suggestions as mere recommendation, The Chronicle hereby re-designates them as imperative calls for assertion of national sovereignty that must be obeyed willy-nilly.

We call on President Mahama to ensure that by the ensuing weekend, the re-negotiation would have commenced without fail. If we do not have the capacity, we should hire renowned negotiators, local or foreign, to face off with their counterparts from the mining and oil sectors, who you can bet your last pesewa will be among the best of the best.

Ghana should not succumb to any threats. Our resources had better remained untapped than be stolen in broad daylight under our noses. The threat of retrenchment for which we shelved the windfall tax in the mining sector has happened anyway without any reference to us. What shame!

The politicians across all divides who have connived to make the law of "causing financial loss against the state" a toothless bulldog would do well to remember that there are Divine Policemen who neither slumber nor sleep.

They will definitely be held to account one of these days!

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