Accra: Governor of the Bank of Ghana, Dr Johnson Pandit Asiama, has raised concerns over the ongoing dollarisation of the economy despite the recent stability of the Ghanaian Cedi. Speaking at the Graphic Business/Stanbic breakfast meeting on the theme 'Sustaining forex gains: Business and economic impact,' he urged local businesses to conduct transactions in Cedis within Ghana's borders, highlighting the challenges posed by the continued preference for dollar pricing in various sectors.
According to Ghana News Agency, Dr Asiama expressed that the deep-rooted culture of dollarisation persists, particularly in real estate, education, and luxury retail sectors, which continue to price in dollars despite conducting transactions entirely within Ghana. This practice, he noted, violates legal tender laws and undermines confidence in the Cedi. He also pointed out the limited reinvestment of foreign exchange earnings, emphasizing a disparity between foreign exchange inflows and domestic reinvestment.
Dr Asiama identified commodity dependence and behavioural practices as significant obstacles to sustained economic transformation. He explained that Ghana's current account and reserve trends remain heavily reliant on exports of gold, cocoa, and oil, making the economy vulnerable to price fluctuations beyond the country's control. He noted that while current high gold prices have bolstered export earnings due to geopolitical uncertainty, any future correction could narrow the trade surplus.
The Governor acknowledged the policy trade-offs in currency management, cautioning that excessive appreciation could reduce export competitiveness and slow industrial recovery. He emphasized the importance of stabilizing the Cedi while translating forex stability into broad economic transformation to empower businesses, create jobs, and enhance productive capacity.
In response to these challenges, the Bank of Ghana is introducing hedging programmes and rolling out the e-Cedi to integrate retail payments. A regulatory framework is also underway to bring cryptocurrency exchanges and digital asset platforms under formal oversight. Additionally, weekly economic policy coordinating meetings and enhanced exchange rate monitoring are being implemented to guide responsive economic decisions.
Dr Asiama called on Small and Medium-sized Enterprises (SMEs) and the informal sector to improve savings rates and invest earnings locally. Supporting this stance, Dr Adu Anane-Antwi, Board Chairman of the Securities and Exchange Commission (SEC), called for policies to encourage foreign currency conversion into Cedi to promote a more stable foreign exchange market, citing examples from South Africa, Kenya, Ethiopia, and South Korea.
