Forex 'black market' is thriving in Ghana because of lack of trust in official rates – Prof Bokpin

Finance and economics lecturer at the University of Ghana, Professor Godfred Bokpin has said the thriving foreign exchange black market in Ghana was the result of lost confidence in official exchange rate management, and has called for urgent reforms to restore market trust.

In a radio interview with Joy FM on Wednesday [July 9, 2025] Prof Bokpin said current government policies have created pricing distortions that push individuals and businesses towards the parallel market.

“The central problem is a loss of credibility in how the Ghana cedi is being priced,” Prof Bokpin said.

“When economic agents believe that the official rate is artificial or manipulated, they will bypass it entirely, and that’s exactly what is fueling the black market.”

He explained that inconsistent forex policies and perceived political interference have created what he called “a dual-track FX market”, where black market operators are now more trusted than official banking channels.

“What we call forex bureau today were black market in the 70s and 80s,” he noted. “Through the IMF and World Bank-led reforms, we decided to formally absorb the black market into the formal financial system.”

The Bank of Ghana has recently tightened monetary policy and stepped up foreign exchange interventions to stabilise the cedi. However, Prof. Bokpin argued that such measures would not be effective without structural reforms and transparency.

“Restoring market confidence requires more than pumping dollars into the system. We need sound fiscal management, transparency in FX supply mechanisms, and predictable policy signals,” he said.