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Promote The Use Of The Cedi   
 
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24-May-2014  
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Dr. Ben Amoah, Head of Financial Stability at the Bank of Ghana, has called on the public to respect Bank of Ghana’s (BoG) directives on the operation of foreign exchange and foreign currency accounts, to promote the use of the cedi as the sole legal currency in the country.

He said quotation of prices, invoicing, advertising and making or receiving payments in foreign currency in Ghana, must be avoided to help curb the unnecessary and excessive demand for foreign currency, and the consequent increase in the price of the dollar.

He said this during a business forum organized by the Ghanaian-German Economic Association in Accra, on the theme: “Understanding the BoG Directives on Forex and Impact of the Value-Added Tax on Banking Services.”

The forum offered the BoG the chance to take another look at its foreign exchange controls, replacing them with those that will work in the interest of businesses.

Dr. Amoah, in his presentation, said offshore foreign exchange deals by resident and non-resident companies, including exporters and non-resident banks, were strictly prohibited, while export proceeds were to be repatriated to local banks within 60 days of shipment.

He noted that, banks may open margin accounts on their behalf into which forex could be lodged, to meet their needs to ensure that both exporter and importers could mobilize forex to meet their import needs.

The Head of Financial Stability, Bank of Ghana said, when the measures are fully adhered to, operations will be streamlined in the foreign exchange market, where clarity and transparency will be introduced in the market, to reduce unnecessary demand for forex, with a moderating effect on the developments in the exchange rate market.

“To deliver a sustainable stability in the forex, market will require the restructuring of the economy towards changing the economy from its current over-reliance on imports by embarking on massive industrialization and also revamping the manufacturing sector to be able to produce a significant proportion of our imports, particularly consumables”, he said

He said in fostering the stability in the Cedi, it will require strict adherence to budgetary targets to minimize budget deficits, improving revenue mobilization by widening the tax base, Diversification of exports and intensive efforts to block foreign exchange leakages.

He added that, there is also the need for greater coordination and synchronization of fiscal and monetary policies, explaining that high fiscal and current account deficits are usually associated with significant exchange rate depreciation.

He said, “As we work towards changing the structure of the economy, there is also the need to bring our fiscal and current account deficits to sustainable levels to ensure sustainable stability of the Cedi.”

Mr. Kennedy Okosun, Chairman of Krif Ghana Limited said business persons, in order to adjust to BoG’s directives, were being driven into a season of business re-engineering to evaluate the suitability of existing business models.

He said, Existing strategies are being reappraised to find the right fit in Consonance with the BoG directives therefore It is expected that appropriate business strategies ought to evolve in the efforts at compliance.

Mr. Okosun said Agreements and Memoranda of Understanding would need to be fine-tuned in relation to these new directives and existing contracts, for supply of goods and services might become unworkable if not re-negotiated in the light of BoG directives.
 
 
Source: GNA
 
 

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