THE CRUCIAL ECONOMIC FACTOR – FOREIGN EXCHANGE RESERVES
We open with a Note: We submit a Commission “Wake Up – Judicial Notice” regarding the Kairaba Hotel ‘Buy/Sell’ arrangement.
MILLENIUM INDUSTRIAL & GENERAL TRADING COMPANY LIMITED shows as being Incorporated “Offshore” 25 March 2004
Primary Organizing Parties to the transaction reflect:
MILLENIUM INDUSTRIAL & GENERAL TRADING COMPANY LIMITED – Standard Chartered House
Robert Aschwanden? As Managing Director On behalf of Millennium………..
Momodou Lamin Sonko (BOTO Industrial Company Ltd. As Managing Director Providing Deed for Millennium………
Sale Contract dated 8-June 2004
It should be clear that the transaction was arranged to “Flip” the property using an Offshore Cover.
WHO is Robert Aschwanden and why the $2,632,573.82 paid to Offset the Liability of the Vendor at Standard Chartered Bank Ltd., to release original Lease K141/1989
WITH the $7,367,426.18 to be Telegraphic Transferred as per instruction by the Vendor to the Purchaser.
THERE IS THE CRUX OF THE MATTER – BUYER SHOULD SURRENDER THE INSTRUCTIONS TO THE COMMISSION. IT IS A SAFE BET THAT THE MILLENIUM ENITY (CLOSED 04-DECEMBER 2006) RECEIVED THOSE FUNDS AND DISTRIBUTED THEM. (((FOLLOW THE MONEY)))
A PROPOSED CONTROL SYSTEM
Well-balanced trade in the international or cross-border form requires certain well-known controls. These controls are generated through the banking sector involving both commercial and central banks.
The main controlling factor is in the form of Documentary Credits, such as Letters of Credit, Bankers Sight Drafts or Funds Transfer via wire. When funds move in and out of a given country using these systems, the account reporting by the banks is conveyed to the Central Bank and thereby assists with the trade balance accounting. In practice, new funds go on the Asset side of the balance sheet, with outgoing payments reflecting as debits. The balance of trade of a nation is either Trade Surplus or Trade Deficit.
In the case of an exporting country, the Strength of its currency increases; there is a dispute between the United States, Europe and China about the strength of China Yuan and why it should be adjusted to compensate for its real value. The floating value or free market exchange rate is almost solely based on the strength of the countries Foreign Currency Reserves and its ability to promptly pay its foreign obligations. Under the Free Market Agreements, government is at a disadvantage in attempting to set the exchange value of the Dalasi, however with good controls, which strengthen the reserves they are able indirectly to do so to their economic advantage.
In order to increase foreign exchange reserves proper accounting must be in place. Banks in receiving funds are the main influencing factor. However in the case of Cash purchasing of exportable products from the country whereby the foreign buyer brings in foreign exchange and deposits it with a local bank, then the resulting Reported trade actually improves the reserves. But in the event that the foreign buyers are allowed to utilize local funds (the currency of the country), then there is no record of funds moving internationally into the country and the system is thereby circumvented.
Such is the current case within The Gambia whereby well-known local businessmen make available to arriving foreign buyers, the Dalasi in order to locally purchase the exportable products. The foreign buyer then purchases from local producers or their middlemen, prepares the product for shipment and makes invoices to the outside buying firm in Foreign Exchange with instructions to pay into such and such account at Offshore (Foreign) Banks. The foreign buyers or their agents have a gain but the country, as a whole, has lost, I.e. a container of cashew nuts is about D950,000 in buyer / agent cost at the ports, representing about USD20,000 of foreign exchange that did not go into the banks and therefore was not added to the CBG ledger. However, the local producers sold the goods and that is a plus on the domestic side.
The major involved products are Cashew Nuts, Groundnuts, Seafood, Sesame Seeds and Timber (in log or semi-cut form). The vast majority of these products are being secured and exported by way of this deceptive and economically disruptive system.
It is imperative for the country to impose financial controls over these export items in order to improve the foreign exchange reserves. The process and procedures to do so are already in place through the Central Bank Rules and Regulations governing banks and their foreign exchange reporting procedures, but they require immediate assistance in order to comply. Checks and Balance.
This assistance should take the form of requiring foreign buyers to make their purchases through banks within the Gambia, either by Letter of Credit, Sight Draft, Wire Transfer or Direct Cash Deposit. These payment methods set the stage for the banks to properly report foreign funds and decrease the domestic and international upward pressure on the Dalasi. It is relative; the more reserves the stronger the currency.
There are means in place to assure or enforce such a control system to include the GCCI Gambia Chamber of Commerce and Industry (Certificate of Origin only issued against cross reference of payment item from users local bank) Shipping line “SI” (Shipping Order) reference to destination buyer and payment method, Inspection at ports by Customs/GRA as is current for export tax – to access valuation and origin of funding, and any other method/s deemed appropriate to bring the system into compliance, i.e. Cashew Nuts are invoiced in US Dollars to the foreign buying firm by these agents at an astronomical amount compared to the local purchasing price.
The Secondary difficulty is the compliance of Foreign Exchange Bureaus receiving foreign exchange cash deposits, which are unreported to the Central Bank despite the requirement to do so. In many cases, these bureaus are right next to or across from a local bank and operate under the same working hours. It is not unusual for a relative of a bank to be operating a bureau and receive funds that were first deposited in the nearby bank and then Put To Work On The Street. This kind of system led to both the Sierra Leone, Brazil and other depreciations until proper control measures were undertaken.
We made a past report on this situation and the bureaus were closed with new guidelines and higher Deposit Accounts in the CBG. What failed was to a significant fee for their branches. The abundance of these, in competition with the nearby banks is a clear circumvention of the reporting rules and a loss to the country. We are not against completion, but many of these branches do little significant business to justify, rent, salaries and costs. But can purportedly show large volume to allow other funds to be wired out.
By employing these methods, the effect will immediately improve with an ongoing appreciation versus the depreciation of the Dalasi. The current system, which has been enshrined as a common practice, assisted by these local businessmen securing a Secondary Profit by making funds available from their local sales and thereby charging a fee of 10 (Ten) or more percent for the use of the funds generated from local product sales. Tracking down the misuse of the banking system will also defer the Hording of foreign exchange and potential Black Market undertakings.
COG – CIVILAN OVERSIGHT GROUP