Strengthen BoG to fight against use of foreign currency – Economist

Dr. Samuel Worlanyo Mensah, an Economist, with the Center for Greater Impact Africa, has called for a strategic policy to strengthen the Bank of Ghana to fight against the use of foreign currencies in the country.

He explained that BoG needed to be resilient in stabilising the Ghana Cedi to compete with other currencies in the global market and also control the use of other currencies as the dominant medium for economic transactions.

Rev. Dr Mensah was speaking at the Ghana News Agency Tema Industrial News Hub Boardroom Dialogue, which was on the topic: “Global economy, Russia and Ukraine war, prospects and challenges for Ghana.”

Dr Mensah said the use of foreign currencies in transacting businesses in Ghana was hugely affecting the value of the Ghana cedi.

He mentioned that any perpetrator when caught must be sternly dealt with to deter others from still transacting business with foreign currency saying that, because there had not been any serious action against defaulters, the situation had been the same.

The Economist said the banning of businesses from using foreign currencies was a step in the right direction as when care was not taken, the Ghanaian currency would be made more vulnerable.

“Most of the volatilities that we experience in terms of currency fluctuations and the cedi losing value against international trading currencies are all because we encourage the use of foreign currencies in our domestic market,” he added.

Rev. Dr. Mensah explained that the use of foreign currencies in local markets increased their demand and that also led to a negative value in the exchange rate that needed to be discouraged with immediate effect.

He said although foreign business communities contributed to the development of the country, their main aim was to make profits and not necessarily seek to promote the welfare of the locals.

“At the end of the day they only look at their interest and not how their actions or inactions were affecting the local currency,” he said.

He added that transactions between Ghana and another country must not necessarily be in dollars but rather the currency of the particular country Ghana was dealing with.

“If we are buying from China, we should be able to buy from the Chinese Yuan rather than the dollar, if it’s from Nigeria, we use the Nigeria Naira and that will make the cedi very stable and good,” he added.