Business News of 2014-02-07

Hotels flout BoG rules; still quote rates in dollars

A day after the Bank of Ghana (BoG) issued a stern warning against dollarization of Ghana’s economy; some big hotels in Accra have blatantly disregarded the central bank’s directive.

The BoG on Wednesday directed all institutions including those in the hospitality industry to desist from pricing or accepting foreign currencies for their products.

“… it is announced for the information of all authorized dealer banks and the general public that with effect from February 5, 2014, the rules governing the operations of FEA and FCA have been revised… on the pricing, advertising receipts and payments for goods and services in foreign currency in Ghana. The Notice states that all transactions in the country are required to be conducted in Ghana cedis, which is the sole legal tender,” the Central Bank said in a statement on Wednesday.

But JoyNews’ Kwakye Afreh Nuamah’s visits to some popular hotels in Accra Thursday showed that the directive is being disobeyed. At least three Five Star and two Four Star hotels in the capital are still charging in dollars, he reported.

In an incognito interview with some operators, they admitted that they are aware of the directive, but are not abiding by it.

When alerted about the illegality of their action, a female front desk executive at one of the hotels retorted, “illegal? No!” She stated she was ready to accept payment in dollars.

A financial analyst Sydney Casely Hayford told Joy FM’s Top Story he was “not at all surprised [but] disappointed” by the attitude of the hoteliers. He said the Bank of Ghana should have “thought through” the directive if intended the measures to work.

Mr Hayford said the hotels may have found it difficult to start charging in the local currency because the central bank had in a statement issued years back exempted some industries including hotels and restaurants from a similar directive banning pricing of goods in dollars.

In his view, the central bank has a “very big problem” at hand since the “people are aware and still want to break the rule”.

On how the bank would monitor forex bureau operators who may flout its rules, Mr Casely Hayford noted that the banking supervision department needs more staff to carry out that herculean task.

The financial analyst advised the Bank of Bank to “take a step back and rethink” its decision to send plain clothes agents to check compliance with the rules.

This is an “ill thought process”, he said. According to him, the action would rather create an “avenue to corrupt the system”. The agents are likely to turn a blind eye when operators flout the rules, he claimed.