FLASHBACK: 'Black market' controls dollar economy in Ghana - Dr. Smart Sarpong

A Senior Research Fellow at Kumasi Technical University, Dr. Smart Sarpong, stated that the black market has enormous control of the forex market. According to him, the market controls how the cedi performs.

''I don't understand how black market can get you whatever amount of dollars you need. So, they fluctuate it anyhow'' but the ''financial system itself cannot get you the dollar you need'', he said, hence calling on the government to remedy the situation by creating the avenue for people to easily purchase the dollar from the bank.

Read the full story originally published on March 26, 2022, by peacefmonline.com

A Senior Research Fellow at Kumasi Technical University, Dr. Smart Sarpong, has called on government to tackle the black market control over the dollar currency in the country.

Contributing to Peace FM's "Kokrokoo" Friday morning, Dr. Smart Sarpong applauded government for its $2 billion financial arrangement to cushion the financial sector, particularly strengthen the forex bureaus, so as to beef up the cedi as against foreign currencies like the US Dollar.

The Cedi has sharply depreciated against the US Dollar and this has gravely affected prices in the country.

Finance Minister, Ken Ofori-Atta, in a press briefing to outline the measures taken by government to address the economic challenges, stated that one of the measures the government is looking at is to pump 2 billion dollars into the system.

''GoG to conclude external financing arrangement of up to US$2 billion in the next 2-6 weeks in line with approved external financing for 2022 and for liability management; MoF will work with the Central Bank to review the foreign exchange retention policy to ensure multinational companies in the extractive sectors retain foreign exchange earnings, from the sale of our resources, in the country," the Minister said.

However, Dr. Smart Sarpong shared a problem he has with this arrangement.

He disclosed that he recently went to the bank to trade in dollars but was asked to present a Visa before he could have the dollar.

To him, he doesn't understand why he should produce a Visa before he gets a Dollar when he isn't traveling out of Ghana.

This, he said, compelled him to go to the black market to buy dollars and it was during his transaction with the black market players that he realized they have enormous control over the rate of the dollar.

" . . when you want dollar from the bank, you won't get . . . In fact, it's not been so long since I traded in Dollar. I suffered with my bankers."

He expounded that, because the black market determines the dollar rate, it invariably affects commodity prices because the higher they go, the higher the prices.

''I don't understand how black market can get you whatever amount of dollars you need. So, they fluctuate it anyhow'' but the ''financial system itself cannot get you the dollar you need'', he said, hence calling on the government to remedy the situation by creating the avenue for people to easily purchase the dollar from the bank.