The Ghana Union of Traders Associations (GUTA) has threatened to close all shops belonging to its members in Accra today, August 29, 2022. According to the Association, this is to register its displeasure at the country’s current economic challenges.
Speaking at a press conference in Accra on Monday, August 22, 2022, the President of GUTA, Dr. Joseph Obeng, said:
“There should be a clear distinction between the forex bureaux and what we call the black market. Since the forex bureaux are legitimate, we should do everything to streamline their activities to benefit the country.”
In general, we tend to agree with the position of GUTA on this subject in the interest of an economic rebound.
As a country, we cannot sit aloof and watch the illegal trade in forex erode the capital of ordinary local importers.
At the time GUTA held the news conference last week, the dollar was trading at GH¢10, inflation was almost at 32%, and the policy rate was at 22%, according to the Central Bank figures.
However, as of yesterday, the interbank daily rate, as published on the Bank of Ghana website, dated Friday, August 26, 2022, put the dollar to cedi at GH¢8.20p, whiles on the black market yesterday, the dollar was selling at GH¢9.60p.
Considering the two scenarios mentioned above, the choice is left with the individual to be patriotic and deal with authorised forex bureau or not.
But human behaviour being what it is, the individual would do what inures to his or her benefit.
Section 3.13.1 of the Ghana Interbank Forex Market Conduct Act stipulates that “local and international FX brokers who want to operate in Ghana’s forex market are required to obtain prior approval from the Bank of Ghana at the beginning of every calendar year.”
Reading the revised forex bureau regulations by the Central Bank, there is no ambiguity as to where trading should take place.
It beggars belief how these illegal forex traders stand openly along some principal streets of Accra and Kumasi, for example, and openly engage in such illegal activities with sheer bravado.
Of all the embarrassing spectacles, one of the black-market trading spots is located adjacent to the Airport Police Station in Accra.
We are worried, just like GUTA is, that black-market forex trading and its unfortunate effect is not a new phenomenon. As a result, the approach to curtailing it, if any, must see the BoG devising new solutions.
The Central Bank must be proactive in tackling this menace because it is an open secret that the black market business is not done in offices, like the legal forex bureau regulations prescribe.
We will recommend collaborative effort between the Ghana Police Service and the Central Bank to tackle the issue head on.
This, we believe, can go a long way to discourage black-market forex traders in the country, especially if it is well sustained.
News of efforts by the Central Bank to improve Ghana’s foreign reserves is welcome, but we might go back to square if we don’t put firm measures on the ground.
Reports indicate that the $750 million African Export-Import Bank (Afreximbank) loan approved by Parliament has hit the account of the BoG.
Intended to fund some infrastructural projects, we understand the BoG has resolved to hold on to the dollar and pay contractors the cedi equivalent.
This, according to the Central Bank, adds to efforts to arrest the free fall of the cedi against the American greenback.
As encouraging as it may sound, the root cause has not been dealt with. The economic system continues to allow for illegalities, a development for which does not need a soothsayer to predict that no amount of dollar injections may salvage the situation for a sustained period.
