September 19, 2020

Benchmarking prices of goods and services against the exchange rate illegal – BoG Governor

The Governor of the Bank of Ghana, BoG, Dr. Ernest Addison, has reiterated that it is illegal to price goods and services in foreign currencies such as the U.S dollar.

Despite the existence of the law, the practice exists in many facets of the Ghanaian economy as some businesses have even adopted new ways by pricing against the exchange rate without accepting the physical foreign currency to outwit the law.

Responding to a question raised by the MP for Ningo Prampram, Sam George, when he appeared before Parliament’s Public Accounts Committee, the BoG Governor called on businesses and institutions operating in the country to 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.

“Dollarisation,” a term for the practice of pricing, advertising and receiving payments in US dollars, is normally used by the automobile companies, hotels and multinationals.

These culprits mostly cite the instability of the cedi as the basis for resorting to dollarisation, which is seen as a hedge against depreciation.

BOG warns public of export and import of foreign currencies

It would be recalled that the Bank of Ghana last year warned the general public to use only the Ghana cedi (GH¢) and pesewas (GHp) to pay for goods and services in the country or face punishment.

It also warned of severe consequences for persons who flout 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.

Source: Business