The Bank of Ghana will from today July 1, commence the implementation of a new directive which is to compel all exporters, except those with Retention Agreements, to repatriate in full all their export receipts to their foreign exchange accounts (FEA) with local banks in Ghana to be converted into cedis on need basis.
The measure, Citi Business News understands is to deepen the foreign exchange markets and promote greater transparency in the determination of the exchange rate.
The business community has since welcomed the decision as it will among other things shore up the country’s foreign exchange reserves and tame the depreciation of the cedi.
The General Manager of NDK Capital Limited, Hammond Mensah is of the view that the move will allow the cedi to continue to experience some level of stability in the short to medium term.
“That is a good thing as it has been proven all over the world that it is a much more prudent way of establishing price discovery and stability. Also, an increased amount of the dollars coming into the economy will mean our demands will be met as opposed to a few dollars which causes the cedi to depreciate,” he remarked.
For his part, the President of the Association of Ghana Industries (AGI), James Asare Adjei, the directive should get importers and exporters to close their offshore foreign exchange accounts.
Mr. Adjei explained, “We believe that going forward it will give a lot more confidence to the exporters not to hold their foreign exchange revenue in offshore accounts because they will have access to them locally. Once they can get access to their foreign currency at any point in time, definitely, there would not be the need to hide any of such funds.”
BoG to track export revenue
The first Deputy Governor of the bank of Ghana, Millison Narh explained that the move will help accumulate adequate reserves to support the economic development of the country.
“In the absence of a coordinated system in monitoring these export funds, millions of export revenue that are accruing to Ghana are sometimes locked up in Western economies which make them benefit at the expense of the Ghanaian economy,” he stated.
The first Deputy Governor further intimated, “The time has come for all stakeholders in the export sector to ensure that every export commodity is accounted for in the balance of payment account. This is the only way we can curb the perennial shortage of the foreign exchange with its attendant effect on the depreciation of the Ghana cedi.”
As part of the directive, the central bank has in collaboration with GCNet, built an automated platform to monitor and properly document all exports and imports of goods and services from and to Ghana
Offenders of the new regulation may be deemed to have committed an offence under Section 15 (4) of the Foreign Exchange Act, 2006 and liable on conviction to sanctions as prescribed by a court.
By: Norvan Acquah-Hayford/citibusinessnews.com/Ghana