The Bank of Ghana (BoG) says it will soon conduct an exercise to arrest and prosecute individuals and institutions that fix the prices of their goods and services in foreign currency.
The Secretary of the bank, Mr. James A. Odoi told The Accra Mail in an interview that businesses that quote prices in foreign currency or ask for the cedi equivalent without authorisation by the bank will face the law. The exercise will involve the security agencies.
Mr. Odoi said the BoG is currently embarking on an education programme through the media to create public awareness about the illegality of quoting prices in foreign currency.
Shedding light on the Bank of Ghana Law 1992 PNDC Law 291, and the Exchange Control Act 1961 (Act71), the BoG Secretary said that the law prohibits businesses from transacting business in foreign currency and since they are not legal tender they could therefore not be used as a means of exchange in the country.
Mr. Odoi however explained that the bank has authorised certain institutions under license to deal in foreign currency, which is within the law.
The Secretary has therefore called on Ghanaians to have confidence in the cedi and use it in all their transactions because the local currency has made much gain in the currency market.
Commenting on the performance of the cedi against the major currencies, Mr. Odoi said that statistics have shown that the pound sterling has dropped in value while the exchange rate of the dollar remained fairly stable. That, he said, would make it possible for businesses to make long-term planning since they would not worry about frequent currency fluctuation as it happened in the past.
During the 19 years NDC rule the cedi lost much of its value against the major currencies because the past government mismanaged the economy. Individuals and businesses lost confidence in the local currency and preferred to keep their accounts in foreign currencies.
The last days of the NDC government saw the performance of the local currency at the lowest point as it lost the battle in the currency war. The excessive government borrowing and high interest rates coupled with high inflationary trend almost cost the economy to collapse. This resulted in a currency crunch and the banks run out of cedis.
Analysts say those companies that are infringing upon the Exchange Control Law are mostly commercial entities. They include firms in the computer industry, the precious minerals sector, the hospitality industry and the real estate sector who have been quoting the prices of their goods and services in the dollar with an option of payment of the cedi equivalent.
