Precious Minerals Marketing Company Limited (PMMC) has requested government assistance in dealing with a legacy debt of GH65.5 million.
January 2017 to December 2021, the debt increased from GH¢30 million to GH¢65.5 million. This is ignoring the fact that between 2017 and 2021, the firm was able to pay down GH¢15.5 million in historical debt.
The development, according to PMMC’s Managing Director, Nana Akwasi Awuah, had a severe influence on the company’s finances, making it impossible to balance the books.
Mr George Mireku Duker, a Deputy Minister of Lands and Natural Resources, paid a working visit to the PMMC on Wednesday to learn firsthand about the company’s operations.
Mr Mohammed Abubakar, the PMMC’s Acting Finance Director, briefed the minister on the company’s financial status during a meeting with the PMMC’s management. The influence of legacy loans on the company’s finances was highlighted in the presentation.
Despite the company’s frantic efforts to pay off the debts, Nana Awuah claimed they were becoming more of a millstone as they grew.
According to Nana Awuah, “As of January 2017, it was GH¢30 million, but we have been able to pay GH¢15.5 million, which is about half of the amount. However, it is a debt which continues to attract interest, so although we pay every month, the interest keeps building on it. It is like fetching water into a basket.”
He also stated that legacy debt accounted for 66.2%and 69.4% of total revenue in 2019 and 2020, respectively, before rising to nearly 100% in 2021.
The government’s 3% withholding tax on unprocessed gold has been reduced to 1.5 percent. He stated that the move has begun to bear fruit for the business.
According to him, “If you look at 2021 when the tax was in full effect, we recorded diminishing figures to the point that by December 2021, we did only GH¢59,890. Since the reduction of the tax from three per cent to 1.5 per cent, we realised GH¢312,000 as revenue from assaying fees in January this year.”
Recommendations by Tarkwa-Nsuaem Member of Parliament
The Tarkwa-Nsuaem Member of Parliament (MP) encouraged the PMMC to take the lead in the country’s efforts to keep a certain amount of gold for local processing.
He stated that local gold refining was crucial since it would provide job opportunities and enhance the local economy.
The deputy minister requested that the PMMC work with other stakeholders, especially small-scale miners, on the policy of keeping gold and the need to strengthen local capability.
To combat black marketing and guarantee that all gold produced in the country is routed via the PMMC, he stressed the importance of establishing local gold buying offices in mining towns.
“The government has rolled out community mining scheme concept in mining communities. After production, what do we do with the gold? We must think about collaborating with entrepreneurs to establish offices in the communities to buy the gold so that assaying services of PMMC can be enhanced,” he stated.