The Bank of Ghana has tightened operations of forex bureaux, as it takes measures to stabilise the Ghanaian currency, the Ghana Cedi, that has been in a free fall in recent weeks.
In an advertisement placed in the newspapers on Thursday, as part of new measures announced in the operation of foreign currency accounts and repatriation of export proceeds, the central bank said the new directives were part of “measures to modernise, enhance and address anti-money laundering issues”.
It said all forex bureaux shall computerise their operations by adopting the certified software approved by the Bank of Ghana by 30 April, 2014, and issue electronic receipts for all transactions in the format prescribed by the Bank of Ghana. The issuing of manual receipts shall cease after 30 April 2014.
All forex bureaux have been directed to keep electronic records of all purchases and sales with the records including name of customer, date of transaction, amount purchased or sold and the proof of identity such as passports, voter’s identity card, national identity card or driver’s licence.
“All forex bureaux shall submit the required monthly returns electronically to the Bank of Ghana within 5 working days after the end of the month (and) no manual returns shall be accepted after 30 April,” the apex bank said, adding that forex bureau shall not sell or buy more than US$10,000 or its equivalent per transaction.
“Failure to comply with this notice shall attract penalties, including pecuniary sanctions, sanctions, suspension and revocation of licence,” the Bank of Ghana warned.
The central bank on Wednesday announced stringent measures to arrest the sharp decline of the Ghanaian currency by revising the mode of operation of foreign exchange accounts and repatriation of foreign earnings by exporters.
A statement signed by Mrs Caroline Otoo, the Secretary of the Bank of Ghana, dated 4 Feb. said the measures took immediate effect.
Under the new terms, no cheques or cheque books shall be issued for foreign currency while cash withdrawals over the counter from foreign currency accounts shall only be permitted for travel purposes outside Ghana and shall not exceed US$10,000.00 or its equivalent in convertible foreign currency, per person, per travel.
The Bank of Ghana said authorised dealers shall not sell foreign exchange for the credit of foreign currency of their customers while transfers from one foreign currency denominated account to another were not permitted.
“All transfers outside Ghana from foreign accounts shall be supported by relevant documentation,” it said.
The Bank of Ghana said foreign exchange purchased for the settlement of import bills shall be credited to a margin account which shall be operated and managed by the bank on behalf of the importer for a period not exceeding 30 days.
“No bank shall grant a foreign currency denominated loan or foreign currency linked facility to a customer who is not a foreign exchange earner,” it said.
The central bank said as part of measures to streamline the collection and repatriation of export proceeds to Ghana, the law required all exporters “to collect and repatriate in full the proceeds of their exports to their local banks within 60 days of shipment”.
The central bank said upon receipt of export proceeds, the bank shall, within 5 working days, convert the proceeds into Ghana cedis based on the average Interbank Foreign Exchange Rate prevailing on the day of conversion.
It advised exporters with retention accounts to continue to operate these accounts in accordance with their retention agreements, adding that retention proceeds which were sold to the banks shall be converted into Ghana cedis based on the average Interbank Foreign Exchange Rate prevailing on the day of conversion.
The Bank of Ghana said offshore foreign exchange deals by resident companies, including exporters, were strictly prohibited.
Many exporters are said to refuse to repatriate their earnings back to the country, preferring to keep the money outside.
The currency slumped by about 18 per cent last year and the slide continues this year, with the Ghana cedi now pegged at about 2.4 to the US dollar, despite heavy interventions by the central bank.
Demand for foreign currency has continued to rise sharply, thus undermining the value of the local currency.
This has seen prices climb steeply and triggered loud protests from the public.
Ghana introduced the opening of foreign exchange accounts and operation of foreign exchange bureaux in the 1980s under the watch of the World Bank and International Monetary Fund (IMF) as it liberalised the economy.
The Ghanaian economy has over many years been plagued by goods and services being priced in foreign currency, popularly referred to as “dollarization of the economy”, thus making many people openly buy foreign currency in huge amounts despite laws against such actions.
Traders also buy huge sums of foreign currency from forex bureaux that they use to import a wide range of items, thus putting pressure on the Ghana cedi.
While the new measures unveiled by the central bank has been hailed, some economists caution that they would lead to a boom in the black market, especially in the short term.
They said the measures should be strictly implemented while investors had to be assured of security of their investment.