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Withdrawal of FX support: BoG needs strong measures to fight black market activities – Dominic Anarigide

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The Bank of Ghana has withdrawn foreign exchange support to customers for the importation of certain non-critical or essential goods. The goods affected include rice, poultry, vegetable oils, toothpicks, pasta, fruit juice, bottled water and ceramic tiles.

An electronic message from the Bank of Ghana to the banks read “in accordance with the President [Akufo-Addo] directive issued at his recent address to the nation on the Ghanaian economy, on Sunday 30th October, 2022, the Bank of Ghana will no longer provide FX support for the imports of rice, poultry, vegetable oils, toothpicks, pasta, fruit juice, bottled water, ceramic tiles and other non-critical goods”.

“Please be advised and act accordingly”, it pointed out.

Dominic Anarigide, an Economist described the action as one that’s too little too late. He explained that such currency stabilisation measures ought to be taken early and not when the currency depreciated to the level it has now. The measure, while could help stabilise Ghana’s currency for a while, it would do very little or nothing to help the cedi appreciate against the dollar; as is the BoG’s hope. 

While admitting that black market systems could be furthered because of this new directive, the Bank of Ghana would have to make strenuous efforts to deal with same. 

Mr. Anarigide, who is the Deputy Constituency Secretary for the NDC in the Navrongo Constituency made these comments when he spoke on A1 Radio’s Day Break Upper East Show with Mark Smith. 

“They [BoG] cannot allow such markets to exist. If they do, what that means is that they do not have control over economic activities in the country. In calculating your GDP, you cannot factor these in because they are hidden and cannot be accounted for but they take place within your domestic economy. Once  they are illegal, then you would have to find a way to clamp them down,” he said. 

Mr. Anarigide called for more attention to be turned to fine-tuning the existing legal framework to ensure that black markets do not thrive. 

“It is about the legal framework and getting the right people to do the right job. That is what is not being done,” he said. 

A primary way of dealing with the black market is blocking their sources of getting dollars. Once that is done and they are starved of funds, they would no longer exist. 

Source: A1radioonline.com|101.1MHz|Mark Kwasi Ahumah Smith|Ghana

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