BOG bolsters cedi defences with export tracking

The central bank is seeking to strengthen the cedi’s defences by deploying a new export monitoring platform to ensure the repatriation of all export receipts into the country.

Exporters are expected to connect to the new electronic export monitoring platform by July 1, 2016, a notice served by the Central Bank on May 30, 2016 said.

The cedi depreciated by close to 18 percent in the first quarter of 2014, forcing the Bank of Ghana to introduce a raft of forex measures which were later rescinded after severe criticism from the public.

The local currency has however stood its ground, nearly eroding all gains the dollar has made since turn of this year. At the beginning of the year, a dollar cost GH¢3.7823. The local currency closed the first quarter trading at GH¢3.8365 to a dollar, indicating a depreciation of a little above 1 percent.

Millison Narh, First Deputy-Governor of the Bank of Ghana, at a stakeholders meeting to discuss the export monitoring software sponsored by the BoG and implemented by the Ghana Community Network Systems Limited (GcNet) said: “The rather sharp depreciation of the Ghana cedi last year was a wake-up call that appeared to confirm the suspicion of many industry players a big chunk of export proceeds, particularly gold, is not being repatriated into Ghana”.

According to figures from the Bank of Ghana, in 2015 a total of US$3.2billion worth of gold was exported from Ghana by both large and small-scale miners.

However, a number of state officials strongly believe that a larger quantity of the commodity leaves the country illegally on a daily basis.

Security agencies continue to uncover gold bars meant for exports without proper documentation. This is ostensibly to avoid paying the right taxes and repatriating the proceeds from gold sales into the country, contrary to the Bank of Ghana Act (Act 612, 2002).

In February, the Customs Division of the Ghana Revenue Authority (GRA), acting on a tip-off, impounded 12 boxes at the Kotoka International Airport which contained gold bullion weighing about 480kg and valued at US$18million. The seized bullion was bound for Asia and the Middle East

The new export monitoring software is expected to enhance the BoG’s supervisory role and ensure foreign exchange earned is repatriated.

“Currently, monitoring activities by the state agencies are being are being done in ‘silos’, thus making it very difficult to plug all leakages of export proceeds. Due to absence of coordinated efforts in monitoring by these government agencies, millions of export revenues that accrue to Ghana are locked up in Western economies.

“In the wake of a foreign exchange dearth from export revenues -- resulting in perennial depreciation of the Ghanaian cedi against major trading currencies such as the US dollar, the euro and the pound Sterling -- the time has come for all stakeholders in the export sector to ensure that every export commodity that leaves the shores of Ghana is accounted for in the Balance of Payments Account.

“This is the only way we can curb the perennial shortage of foreign exchange with its attendant depreciation of the Ghana cedi, and accumulate adequate reserves to support the socio-economic transformation agenda of Ghana,” Mr. Narh said.