President Nana Addo Dankwa Akufo-Addo has implored the Forex Bureau Association of Ghana (FBAG) to partner with the government to develop mechanisms that would drive out the black-market operations in the foreign exchange business.
President Akufo-Addo said the initial impulse for the creation of the Forex Bureaus, as a regulated intermediary in the foreign exchange market, has still not materialised as the black market was still driving both the supply and the rate of foreign exchange transactions in the country.
Ghana is facing an enormous economic crisis which has seen the country’s Cedi currency recording an unprecedented depreciation, “falling nearly 100 % against the dollar beginning this year.
According to the Bank of Ghana, available data indicate that the country “started the year 6 cedis to the dollar. It got to 7 and we stayed at 7 in June, 7.6 on July, 8 in August, 9.6 in September and now it is 12. 5. But we are here again with people sending messages that the dollar cedi rate is 15 cedis to a dollar.”
According to the Governor of the Bank of Ghana, “It is clear that the market is not functioning properly. We are seeing speculations taking over under very disorderly market conditions and it appears now the black market is rather driving exchange rates. This, we cannot allow to continue.”
In a meeting with the leadership of the Forex Bureau Association of Ghana at the Presidency on Wednesday, President Akufo-Addo said the black-market operations of forex exchange were completely unacceptable and needed to be dealt with decisively.
“We have to find a way to work together to drive the black market out of the market so that the formal sector—banks, forex bureaus — can operate efficiently on the market,” the President stated.
The initial reason for the creation of the Forex, according to President Akufo-Addo, was when Ghana’s economy began to open up and liberalise and to find a mechanism to put an end to black market operations in the forex transactions.
“… so that you have these forex bureaus regulated by the Bank of Ghana which would make access to foreign exchange in a regulated and controlled manner easier.”
But unfortunately, “somehow, this initial motivation for the creation of the forex bureaus has still not materialised, it is the black market…that is still driving both the supply, as well as the rate of our foreign exchange transactions. That is completely unacceptable,” the President stated.
On his part, the president of FBAG, K. T. Dadzie said the association was a regulated body and did not have much control over the pricing of forex, apart from what their regulator would ask them to do.
He said for the past three months, foreign exchange business in the country had suffered enormous problems — “our customers and the whole nation had suffered greatly.”
Mr Dadzie told the President that even though members of the association had experienced turbulences in time past “this time had been a bit tough for all of us.”
The FBAG president said with the announcement that the association was meeting the Bank of Ghana on Tuesday, “the rate started coming down. It means it is not natural but people are speculating and trying to make windfall out of the situation.”
He hoped that the association’s meeting with the President would further stabilise the depreciation of the Cedi, adding, I can tell you from what happened from yesterday to today that, it’s already stabilising.
Mr Dadzie assured President Akufo-Addo that the association would do the needful, especially from decisions that had been taken at their meetings with him and the Bank of Ghana.
Rex Mainoo Yeboah, ISD