Economist lauds BOG’s directives on forex importation and exportation

A financial economist Dr. Lord Mensah has welcomed the Bank of Ghana’s(BoG) directives on the importation and exportation of foreign currency in and out of Ghana.

The Central Bank in a notice to the general public has warned of serious repercussions for any person arriving in or departing from Ghana with undeclared amounts in excess of $10,000.

According to the Central Bank, if the amount is in excess of $10,000.00, the whole amount shall be declared using the Currency Declaration Form (CDF) indicating the source and purpose for carrying such an amount.

Failure to declare or a false declaration shall according to the Central Bank lead to the seizure and/ or forfeiture of all the currency or monetary instruments, and the defaulters may be subjected to penalties and/ or criminal prosecution.

Commenting on the new guidelines to Citi Business News, Financial Economist Dr. Lord Mensah highlighted some key benefits.

“If you look at the drivers of the Cedi, we have different drivers, the long-term, short-term and the medium term. But this measure is likely to curb the short-term demand of the Dollars as we know. Now we know this Dollar has been a store of value for which people can keep their investments in that form. And then also if you open up your borders, people take advantage of buying it low here and selling it in a certain environment. So if you are a country and you open up your borders, obviously people will take advantage of that situation. So I believe that yes it’s a good measure and for me looking forward it should be able to tame down the short-term fluctuations in our currency while we work towards the long-term.”

Dr. Lord Mensah further called on the government to consider introducing innovative tax regimes targeted at multinational companies to get them to keep their earnings in the country for longer periods of time instead of finding legal and illegal ways to repatriate their earnings out of the country.

“If someone has an investment here, for instance MTN has its shareholders outside and they want to repatriate maybe in the first quarter of the year, you can as a country provide them with some tax incentives for that period. For which you can say that if you hold up your money here for the next 3 months or 4 months we can give you a tax rebate of 5 %. So it behooves on the company to decide whether the 5% tax exemption that they will get within that period will be beneficial to its shareholders. But I presume that if you provide those incentives it will propel them to retain here in Ghana for that period.”

Bank of Ghana’s announcement

In an announcement to the public under the powers conferred on the Bank of Ghana by the Foreign Exchange Act, 2006 (ACT 723) to make rules governing the importation of foreign exchange and given the provisions of the Anti-Money Laundering Act, 2008 (Act 749) as amended, the Central Bank warned that;

1. Any person arriving in or departing from Ghana is permitted to carry up to

$10,000.00 or its equivalent in any other monetary instruments without declaration. However where the amount is in excess of $10,000.00, the whole amount shall be declared using the Currency Declaration Form (CDF) indicating the source and purpose for carrying such an amount. If you have someone else carrying the currency or monetary instrument for you, you must also declare at the point of entry or exit.

1. Failure to declare or a false declaration shall lead to the seizure and/ or forfeiture of all the currency or monetary instruments, and may be subjected to penalties and/ or criminal prosecution.

The notice went on to clarify that monetary instruments include coins, currency, traveller’s cheques and bearer instruments such as personal or cashier cheques, bearer shares and bonds. According to the Bank of Ghana transportation of currency through mails or cargo is strictly prohibited, and that such amounts shall be confiscated to the State upon seizure.