BoG rolls out measures to stop dollar pricing
The Bank of Ghana (BoG) is to enforce legal tender laws rigorously, particularly in sectors where foreign currency pricing has become the norm, as part of measures to stop dollar pricing in the country.
“The ongoing rollout of the e-Cedi, our digital currency, will be seamlessly integrated with retail payment systems to guarantee that even as we transition to a digital economy, the cedi remains at the forefront of financial transactions,” the Governor of the BoG, Dr Johnson Pandit Asiama, said.
He also said that the central bank would soon complete a comprehensive regulatory framework for virtual asset service providers (VASPs) to bring the much-needed oversight to the rapidly evolving digital asset landscape.
That, he said, would bring cryptocurrency exchanges and digital asset platforms under formal oversight, align them with anti-money laundering and counter the financing of terrorism rules by ensuring that digital innovation supports, rather than undermines forex control and monetary stability.
Event
The Governor, who was speaking at a Thought Leadership programme at the Graphic Business/Stanbic Bank Breakfast Meeting in Accra on Monday, said in spite of transacting locally, many businesses continued to price goods and services in US dollars, especially in areas such as real estate, education and luxury retail.
The programme was a joint initiative of the Graphic Communications Group Ltd (GCGL) and Stanbic Bank Ghana.
It is a series of dialogues held quarterly that features selected topics aimed at influencing government policies in favour of businesses.
Breach of law
Dr Asiama said the persistent and deep-rooted culture of dollarisation in the economy did not only breach legal tender laws but also undermined public trust and confidence in the cedi, compromising the country's economic stability and financial sovereignty.
Dr Asiama said that although export earnings had shown an upward trend, a considerable proportion of the funds were either being retained in foreign accounts or not being productively reinvested in the local economy, thereby depriving the country of potential economic benefits and hindering sustainable growth.
He said the country’s formal savings rate remained low, and that export value retention, particularly among SMEs and in the informal sector, was far below potential.
Enforcing measures
The Chairman of the Securities and Exchange Commission (SEC) Governing Board, Dr Adu Anane-Antwi, also said that steps must be put in place to ensure foreign currencies chased the cedi to promote a more stable foreign exchange market.
“Most of us have travelled outside where you cannot use the dollar to pay your hotel bills. I have experienced that in South Africa, Kenya, Ethiopia and South Korea,” he said.
The Managing Director of the Ghana Stock Exchange (GSE), Abena Amoah, also proposed the promotion of Ghanaian ownership in a larger number of companies as part of measures to retain more foreign currencies.
“A few years ago, MTN came to the market and was required to sell 30 per cent of its shares to Ghanaians using the Ghana Stock Exchange, which means that of all the dividends MTN has now paid, at least 30 per cent is retained with the larger Ghanaian community,” she said.