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Thread: Dollarization of the Ghana Economy: about time BOG did something

  1. #1
    Godfather Fashion Yaa's Avatar
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    Default Dollarization of the Ghana Economy: about time BOG did something

    The Ghana Association of Bankers (GAB) on Friday called on the Government to enforce the law that discouraged companies from invoicing and receiving payments in dollars, to halt the depreciation of the cedi.

    It also proposed that a gradual medium to long-term measures should be employed to reverse what had been referred to as the “dollarisation of the Ghanaian economy” in order to repose confidence in the local currency, the Cedi.

    Mr. Asare Akuffo, President of GAB, made the call at a press conference organised at the end of the Association’s 32nd Annual General Meeting in Accra.

    The tendency of pricing and receiving payments for goods and services in dollars by some institutions and individuals, had become worrisome such that it had moved the Central Bank to recently announce it would strictly carry out the provisions of the Foreign Exchange Act 2006 (Act 723) and the accompanying regulations, to save the local cedi currency from further depreciation.

    In Ghana, there are widespread examples of the purchase of cars, payment of school fees, mortgage loans, rental payments and airline tickets, among others in the country done in dollars.

    It has been observed that service providers quote exchange rates that are significantly off-market.

    The fringe exchange rates seep down into the market and become benchmark rates, unduly influencing market rates.

    Ghana's laws allow both residents and non-residents to operate foreign exchange accounts with any individual or corporate body operating such an account being allowed to convert cedis into dollars and pay these monies into the foreign account.

    Consequently, some individuals and banks have built huge dollar deposits in their accounts.

    Such banks respond to the trend by importing huge volumes of foreign currency to service the needs of their clients.

    Meanwhile, Mr. Akuffo said beyond the legal limit that allowed an individual to hold $10,000, the government needed to restructure the economy in a way that would reduce the high demand of the foreign exchange.

    “Measures must be put in place to ensure that Ghanaians would be discouraged to hold a dollar,” he said.

    However, he emphasised that a short-term approach to resolving the issue could create liquidity challenges to some banks.

    Mr. Akuffo said; “We wish to add our voice to the demand for fiscal responsibility in this election year.

    “The economy must now move into a trajectory of relatively low levels of inflation and interest rates to achieve a predictable business environment of low cost of doing business and minimal uncertainty.”

    Mr. Akuffo called for effective personal identification and residential address system to reduce credit risk.

    He described the national identification exercise as having halted stressing that the project needed to be resuscitated through the commitment of funding. “Local governments should be encouraged to undertake street naming and house numbering projects,” he said.

    Mr. Akuffo said GAB had worked closely with the Bank of Ghana to provide transparency and uniformity in loan pricing by banks.

    He said though the initiative had experienced some challenges, he was optimistic it would be fully implemented in the course of 2012.

    Mr. Akuffo pledged the continuous co-operation with the Central Bank and the Government to further improve the financial system for the achievement of financial stability and economic growth.

    GAB is expected to maintain leadership in the market by improving and deepening its stakeholder’s relationship through service quality to its customers and the community.

    Source: GNA
    Last edited by Pope Bitterz D'Alomo; 19th August 2012 at 08:47 PM.


    all go to the same place ;all come from dust and to the dust all return. who knows if the human spirit rises upward and if the spirit of the animal goes down into the earth?
    ecclesiastes 3:20-21 :-x

  2. #2
    Super Moderator Pope Bitterz D'Alomo's Avatar
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    tell me about it.... I recently got wind of an incident where a buddy went to purchase a charger for his phone in Ghana and to his amazement all the prices at the store were in dollars. He asked the attendant at the counter why the prices were not in cedis and got the ridiculous answer " Please it's the same in cedis" smh
    Beware lest you lose the substance by grasping at the shadow. ~Aesop

    Ignorance can be educated,drunkenness sobered,craziness medicated but there is no cure for STUPIDITY


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