The Booming Illegal Currency Trade in Ghana and It Effect On The Cedi

Takoradi Market Circle

As the Bank of Ghana (BoG) finds solutions to shore up the Ghana Cedi against major foreign currencies especially the US dollar, Business Today takes a look at the illegal forex trade; “Black Market Forex exchange”.

Section 29 of the Foreign Exchange Act (723) 2006, clearly states that, “it is a crime to deal in foreign exchange without license.”

But here in Takoradi in the Western Region of Ghana, with well over 16 commercial banks dotted around the Takoradi market circle alone, an illegality which contravenes BoG’s directives on forex trading is going in the full glare of law enforcers and the general public.

operators of this well known illegal forex business are mostly from neighbouring African countries such as Niger, Mali and Nigeria.

They buy and sell major foreign currencies like the U.S Dollar, Pounds Sterling and CFA. 

Some residents in Takoradi who spoke to Business Today enumerated several reasons why they preferred transacting business at the black market instead of the mandated and regulated Forex Bureaus in the country. And that they believe the BoG must strictly enforce the law on it directive.

The Bank of Ghana early this year issued some directives on how participants in the forex market must conduct their businesses to help stabilize the cedi.

The new directives which took effect from 25 February, 2019 among other things, spells out who is eligible to trade in forex in the country, how records should be kept and reported to the Bank of Ghana, and some general rules on the trading of forex.

Meanwhile a financial analyst Dr. Richmond Akwasi Atuahene has debunked the idea that the new Ghana Interbank Forex Market Conduct outlined by the Bank of Ghana (BoG) will stabilise the cedi against the US dollar.

Dr. Atuahene told the B&FT that the directive is just to regulate conduct and keep accurate data in forex trading, something which has nothing to do with the factors causing rapid depreciation of the cedi against the US dollar.

In the same breath, some industry plays have also stated that the BoG directive on forex bureau must properly be implemented to safeguard the sector.

Nana Oto-Achampong a banking consultant told Business Today the law enforcement agency cannot continue to sit aloof whiles such an illegality continue to strive in our society. 

“So how do you regulate some people and allow others in the same sector to do what they dime fit regardless of the law; then we must forget it if we cannot deal with this black market operations,” he stressed.

Today, the cedi is now trading around GH¢5.56p to a dollar, which represents more than 8 percent depreciation since the beginning of 2019.

This however must put regulators on their toes if indeed we want to stem the tide of the cedi against major foreign currencies.

Sika Warmann | Business Today | | Ghana 

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