Ghana’s Fight Against Money Laundering and Terror Financing: Challenges and Progress

Introduction

A recent review of Ghana’s National Risk Assessment (NRA) has highlighted significant challenges in the country’s efforts to combat money laundering (ML) and terrorist financing (TF). The Mutual Evaluation Report (MER) conducted by the World Bank identified several areas of concern, including the lack of sector-specific guidelines for certain industries.

Sector-Specific Challenges

• The report found that some sectors, such as extractive and petroleum, cocoa, and hotel, were not adequately covered in previous assessments.
• The sector-specific AML/CFT guidelines had not been revised to align with the latest FATF 40 Recommendations.
• This lack of guidance has made it difficult for these sectors to implement effective measures to prevent ML/TF.

Industry Resistance

• Many institutions within these sectors have expressed concerns about providing information related to their businesses, citing fears of tax audits and disclosure of business secrets.
• This resistance has hindered efforts to gather data and assess the risk of ML/TF in these industries.

Insufficient Data

• The review found that many institutions lacked adequate Management Information Systems (MIS) to generate the required data.
• This lack of data has made it challenging to conduct a thorough assessment of ML/TF risks and vulnerabilities.

Threat Analysis

• Crimes such as fraud, stealing, robbery, drug trafficking, corruption, and tax evasion are the most prevalent in Ghana.
• The extractive, petroleum, and hotel sectors have been identified as areas of particular concern due to their exposure to these threats.
• Cybercrime is also a significant issue in Ghana.

Vulnerability Assessment

• The assessment focused on 24 areas with varying levels of capacity to detect and prevent ML/TF.
• The report noted that while some institutions had made progress in implementing AML/CFT measures, others required significant improvement.

Progress and Next Steps

• Ghana has agreed to review its NRA process to address the identified deficiencies.
• The reviewed NRA aims to develop a National AML/CFT Policy document and Action Plan to guide the allocation of resources and ensure compliance with international standards.
• The World Bank provided technical assistance and guidance throughout the review process.

Conclusion

As Ghana continues to combat ML/TF, it is essential that institutions within all sectors work together to address these challenges. The country must prioritize the development of sector-specific guidelines, improve data collection and analysis, and enhance its MIS capabilities to effectively detect and prevent ML/TF.