Immediate Legislation Against Dollarization Won’t Rescue Cedi – BOG

The Bank of Ghana (BOG) has ruled out any move to soon push for a legislation that will stop the use of dollars as legal tender for conducting transactions in the country as it moves to curb the cedi’s free fall. Dollarization is one of the main factors that have been blamed for the cedi’s continuous free fall against the dollar. There have been calls for the central bank to push for a law that will stop the quotation of prices of goods and services in dollars as is being done in Zambia to help rescue the cedi from free fall. But speaking at the commissioning ceremony of the Ecobank–TTB merger, Governor of the Bank of Ghana, Paa Kwesi Ammisah Arthur said the bank does not believe immediate legislation on the matter will rescue the cedi. “The dollarization has been filled by the instability in the exchange market. In the last couple of days, I received many e-mails with attachments. The attachment is the Zambian Legislative Instrument that de-dollarizes the Zambian economy.”, he said. He further noted: “I was with the governor of the Zambian Central Bank last two weeks and he gave me a copy of those legislative instrument so I found out people were well meaning in sending me a copy of the Zambian Legislation Instrument; saying that the way to solve this problem is by legislative action. Unfortunately or fortunately, the central bank does not believe that immediate legislative action is required to end the development that has taken a number of years to reach this point. So we are hoping that the market mechanisms, incentives and so on will be able to guide people to areas that we want them to go.” Meanwhile the group Chief Executive Officer of Ecobank, Arnold Ekpe speaking at the commissioning ceremony hinted the bank will begin investing in other sectors of the economy following its merger with TTB. Ecobank early this year fully completed its merger with TTB through a share swap. The new entity created from the merger is now reputed to be the biggest bank in the country in terms of assets.