President Nana Akufo-Addo on Wednesday expressed worry about the activities of the black currency market which has significantly contributed to the depreciation of the Cedi against major trading currencies.
He said the situation where the parallel market was driving the supply and rate of foreign exchange transaction was unacceptable, and no effort must be spared to rein in that situation to curb the currency crisis around the Cedi.
The President voiced the concern when he met the leadership of the Forex Bureau Association of Ghana at the Jubilee House in Accra.
The meeting, called at the insistence of the President, forms part of the government’s wider consultation with key economic players to find solutions to the current economic challenges.
President Akufo-Addo told the association that it must lend support to every action that the government would be adopting to tame currency speculators who have contributed to driving down the value of the Cedi.
He was emphatic that the black market must be eliminated from the financial space to arrest the pace at which the cedi loses its value against major foreign currencies.
“The initial impulse for the creation of Forex Bureaus in Ghana was that at the time when our economy was opening and liberalizing there was the need to find a mechanism for putting an end to black market operations on the country’s currency.
“That was the initial impulse, so we will have these forex bureaus regulated by the Bank of Ghana to make access to foreign exchange in a regulated and controlled manner easier.
“Unfortunately, somehow, this initial motivation for the creation of the forex bureaus has still not materialized…
“As you hear public commentators and commentators of the Bank of Ghana itself say, it is still the black market that is driving both the supply as well as the rate of our foreign exchange transactions.
“That for me is completely unacceptable and we have to find a way to work together to drive the black market out of business,” President Akufo-Addo stated.
The Cedi has since the beginning of the year witnessed a steep fall in value, depreciating against major currencies due to several factors including the rebound of the strength of the US Dollar, investor reaction to credits ratings downgrade of Ghana’s economy, the non-rollover of maturing bonds by non-resident investors, high crude oil prices, loss of access to the external market for borrowing, as well as speculation.
Mr K. T. Dadzie, President of the Forex Bureau Association of Ghana, told President Akufo-Addo that the past three months had not been easy for operators of Forex bureaus, as well as their customers.
He said the association did not have the control on the forex market beyond what the regulator, the bank of Ghana, determined.
“We have been in this business since 1988. We have had turbulences, but this is a bit tough for all of us. We have gone through all that happened, but we tried, and we survived, and I know this too shall pass.
“With the announcement that we were even meeting yesterday, the rate started coming down. It means it is not natural, this has all been done by people’s speculation and trying to make windfall out of the situation that we are in,” he said.
The meeting went into a closed-door session.