Business News of 2014-06-26

Gov’t broke BoG’s forex rules – Financial analyst

Some financial analysts are accusing government of breaching the forex rules by the Bank of Ghana by sanctioning the airlifting of 3 million dollars to Brazil as payment for the Black stars.

Government is pre-financing the payment of the Black Stars appearance fees which will be reimbursed when FIFA’s prize money for Ghana’s participation in the world cup is paid after the tournament in Brazil.

The Black Stars players have been agitating over the continuous delay in the payment of their appearance fees. But according to currency analyst Sammi Ampah, the move flouts the forex rules of the Central Bank which says ‘’the threshold for transfer abroad without initially submitting documentation is 50,000 dollars.’’

He said the other rules are that, “without prejudice to the limit of $10,000 withdrawal per travel, and the $10,000 annual transfer without documentation, over-the-counter cash withdrawals from FCA and FEA would be permitted up to a limit of $1,000 or its equivalent per transaction in foreign currency.’’

Mr. Ampah said this negatively affects efforts to encourage the use of non-cash instruments (plastic cards) by the Bank of Ghana. Speaking to Citi Business News he further noted that, ‘’if you could take a general understanding of the rules guiding the transfer of money then I guess there seems to be a breach.’’

A senior lecturer at the University of Ghana Business School Dr. Godfred Bokpin, has also criticized the decision by government. “This is a test case for all of us, it looks quite interesting because one will expect that government will show clear leadership in this case that we are willing to go by the directives that we are willing to ensure that transactions are Cedi denominated,’’ he said.

Dr. Bokpin is demanding for clarifications about the documentation sanction the move and said,” In this case I’m not too sure whether this three million dollars will be spent under a different dispensation that they will have obtained from the bank of Ghana or the revised rules were for Ghanaians living here and a different one will apply for Ghanaians living elsewhere.”

Speaking on Eyewitness News on June 25, the Deputy Sports Minister, Joseph Yamin said the Ministry wanted to use an e-banking transaction but the players insisted they wanted physical cash payments.