US$540m lost in 6yrs through undervaluation of cocoa
As government struggles to generate enough money for national development, a new report by the Institute of Statistical, Social and Economic Research (ISSER) of the University of Ghana has disclosed that the country lost US$540million in the export of cocoa paste and cocoa beans between 2011 and 2017.
The findings show that Ghana lost US$234.6million of cocoa beans exported and US$306 million of cocoa paste exported within the same period through undervaluation of the products before they were exported to Ghana’s trading partners.
“If you look at the figures, the question that comes to mind is: where did our money go? In other words, you can ask what kind of development we could have achieved with all this money that is unaccounted for,” Senior Economics Researcher at the University of Ghana, Dr. Ama A. Ahene-Codjoe, said at the report’s launch.
Dr. Ahene-Codjoe stated that key state institutions such as the Bank of Ghana (BoG), Ghana Statistical Service (GSS) and the Ghana Revenue Authority (GRA) among others, were all engaged to understand the tax computations module used in the export of cocoa and gold.
Explaining how the undervaluation occurred, Dr. Ahene-Codjoe said that while the Customs Division of the GRA recorded low figures in export of the products, the receiving countries recorded higher figures on their books.
“These studies are verifiable. Most of these countries publish their data, and so you simply get the estimates and see the contrary figures,” she said.
She added that in some cases the records kept by state agencies mandated to police Ghana’s exports showed traces of contradictions.
This, she said, makes it difficult to reconcile figures from Ghana and its trading partners.
Solutions
Proffering some solutions to help solve the challenges, Dr. Ahene-Codjoe called for a more robust and reliable data-gathering system to help state institutions monitor the export of Ghana’s mineral resources.
“We recommend an improvement in the data collection capacity of institutions engaged in the export of these commodities, such as the Customs Division of the Ghana Revenue Authority,” she said.
In addition, she advocated for greater cooperation among the various institutions in the revenue mobilisation sectors to reconcile all data gathered in the sector to help improve the skills of their staff, as well as tracking payments by national institutions.
“We must as a nation also provide these institutions with information and communication technology tools – especially computers, relevant software and access to critical databases – matching those of the private sector actors,” she stressed.
She also appealed for regulators to consider using research work published by ISSER as a means for risk-based selection of cases for Customs, tax and transfer pricing audits.
Legal recommendations
Suggesting more solutions, Legal Researcher Ms. Adubea Jennifer Hall said there is a need for contextual data to better interpret the concept of mispricing gold in Ghana.
“Streamlining and simplification of processes for receiving and accounting for gold export revenue would include consolidation of the legal principles and procedures for tracking gold export revenue in Ghana,” she said.
She maintained that a compilation of the various provisions on gold export revenue and the development of a comprehensive manual that outlines all sources of must be pursued.
She further called for the education and training of primary officials in the minerals and mining sector on illicit financial flows threats in the gold and cocoa sector, and methods of vigilance to help curb the menace.