It is illegal to benchmark prices of goods and services to foreign currencies - Governor of BoG

It is illegal to benchmark prices of goods and services to foreign currencies - Governor of BoG

The Governor of the Bank of Ghana, BoG, Dr. Ernest Addison, has repeated that buying and selling goods and services in foreign currencies in Ghana is illegal.

Dr Addisson was responding to a question by the MP for Ningo Prampram, Sam George, at Parliament’s Public Accounts Committee on 25th June, 2020.

Although, a law has been instituted to curb this practice, it continues to fester in many sectors of Ghana’s economy. Reports suggests some businesses are using new methods such as

“pricing against the exchange rate without accepting the physical foreign currency to outwit the law.”

The Governor of BoG insisted that businesses and institutions operating in the country must desist from such acts.

“Dollarisation is illegal. It is illegal to index to the US dollar. You are not allowed to invoice in US dollars. Any complaints of invoicing in US dollars will be investigated as such violations are punishable by law,” he said.

The term, “Dollarisation,” has been coined for the practice of pricing, advertising and receiving payments in US dollars. This activity is known to be pervasive among automobile companies, hotels and multinationals.

These companies or industries have blamed the fluctuation of the cedi as the reason they resort to dollarisation, which is a technique designed to reduce or eliminate financial risk.

BOG admonishes public of export and import of foreign currencies

Last year, the Bank of Ghana cautioned the public to use only the Ghana cedi (GH¢) and pesewas (GHp) to pay for goods and services in the country or face punishment.

The bank warned the general public of grave consequences if anyone was caught flouting its rules concerning the importation and exportation of foreign currencies.

In a press statement, the central bank said although the Foreign Exchange Act, 2006 (Act 723) prohibited the pricing and the payment in currencies other than the local currency, it had noticed that some institutions, companies and individuals were dealing in the “business of foreign exchange trade without authorisation from the bank.”

According to the central bank, the violation of the law may result in summary conviction, a fine of up to 700 penalty units or a prison term of not more than 18 months, or both.