Dr. Johnson Pandit Asiama, BoG Governor
Africa PolicyLens (APL), a research and policy think tank, has called on the Bank of Ghana (BoG) to immediately withdraw what it describes as a “draconian directive” restricting foreign currency cash payments by large corporates.
In a statement, Dr Frank Bannor, a Fellow of APL, said the think tank had taken note of the BoG’s directive to banks and the public regarding foreign currency cash payments to large corporations. “We firmly state that such measures are regressive and could have serious consequences for the Ghanaian economy,” portions of the statement read.
According to APL, the central bank appears more interested in maintaining a certain exchange rate, rather than implementing prudent and sustainable measures to stabilize the economy.
The statement explained that instructing banks to discontinue the payment of foreign currency to critical corporations such as Bulk Oil Distribution Companies (BDCs) and mining companies, unless these firms lodge foreign cash deposits with their respective banks, demonstrated “a lack of thought and disregard for the operationalization of firms and the welfare of the Ghanaian people at large.”
Questions
APL questioned the practicality of the directive, pointing out that not all corporations sell their products or services in foreign currency. It argued that oil distribution companies, in particular, do not generate revenue in foreign exchange, yet they are required to import petroleum products from the global market.
“How does the BoG expect oil distribution companies to make foreign deposits before requesting forex for such imports? In any case, where does the BoG expect these corporations to get such forex and lodge it with their banks?” the statement queried.
The think tank further noted that the directive suggested the central bank had lost touch with its core mandate. It asked whether the BoG, through this policy, was indirectly encouraging BDCs and mining firms to resort to the black market for foreign exchange. “If so, then where lies the sustainability of the local currency that the directive seeks to echo?” the statement questioned.
APL also challenged the central bank’s position on exchange rate management, stressing that if the rate is truly determined by market forces, as Governor Dr. Johnson Pandit Asiama has consistently stated, then there is no need for excessive intervention or restrictive directives.
“If indeed the current exchange rate is solely determined by market forces, as stated by the Governor and not the excessive intervention of the BoG, then the central bank has no cause to worry,” the statement added.
The think tank has therefore urged the Bank of Ghana to reconsider its approach, and withdraw the directive. It cautioned that failure to do so could worsen the challenges faced by key sectors, undermine economic stability, and create further distortions in the foreign exchange market.
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