Business News of 2013-12-10

Gov’t must lead the way against dollarization - Economist

An Economist, John Gatsi has urged government to lead the way in the fight against the quotation of prices in dollars in the country.

Several months after the Bank of Ghana (BoG) placed a ban on the quotation of prices of goods and services in dollars, the situation has become even more rampant as more businesses continue to use the dollar as the main medium for transactions.

Dollarization is one of the main factors that have been blamed for the Cedi’s continuous free fall against the dollar.

There have been calls for the central bank to push for a law that will stop the quotation of prices of goods and services in dollars as is being done in Zambia to help rescue the cedi from a free fall, but the BoG has ruled out that suggestion.

Speaking on the Citi Breakfast Show, Mr. Gatsi stated that the situation is persistent because government continues to transact business with local businesses in dollars.

“There are loans that are contracted in the country in dollars, there are contracts that are signed in dollars even though they are related to domestic entities. If that is happening, then it becomes very difficult to stop it, so it has become a problem in the country.”

He opined that the only way the problem can be resolved is to “stop it from the highest level of governance where government comes very clear, dedicated to the cause of ensuring that no domestic contracts are signed in the foreign currency.”