Ghanaian Chronicle

Wednesday, 25th August 1999

Dollar Charges Cripple Economy
By Kwesi Koomson

CONTRARY TO official pronouncements and the law, prices of most goods and
services are still priced in dollars, a situation which is adversely
impacting on the very fragile cedi-dollar relationship.

The Bank of Ghana Law 1992, PNDC Law 291 and the Exchange Control Act 1961,
(ACT 91) make it illegal for Ghana residents to receive any foreign
currency in payment for services or goods, with a few exceptions.

The exemptions cover authorised dealer banks, licensed forex bureaux,
authorised dealer hotels and duty-free shops which are under the auspices
of the Ghana Tourist Board (GTB).

SECTION 1A of the Exchange Control (Amendment) Law 1986, (PNDC L149),
states that "for the avoidance of doubts, it is hereby declared that unless
otherwise authorised by the Secretary responsible for Finance, no Ghana
resident shall receive in Ghana any external currency as payment for
services rendered or for the sale of goods or property by him or as rent of
any property owned by him."

Section 5(2) of the same law also prohibits Ghana residents from making
payments in foreign currency except in circumstances as may be prescribed.

Notwithstanding these well-defined regulations, many business operators,
including state-owned business continue to pay their prices in foreign
currency, especially, dollars.

The national airline, Ghana Airways, always quote fares in dollars. Even
though payments are allowed in cedis, the fares vary almost on a daily
basis due to the fluctuations in the exchange rates.

A survey carried out by this reporter revealed that all the real estate
developers have dollar priced properties with the explanation that most of
these homes are bought on credit.

"Some clients take as long as a year to finish paying for properties they
buy; so, we will be losing money if we price in cedis, because of
depreciation," a real estate developer explained to this reporter.

When I countered that it was because of such acts which caused the cedi to
depreciate he only quipped, "it s a system we came to meet, maybe the
government has to correct it."

But government ministries, agencies and department are themselves guilty
making foreign currency payments to contractors, consultants and even, at
times, to settle hotel bills.

On individual basis, government operatives and appointees who have acquired
property openly demand dollar rents in direct contravention of the law.

An economic analyst, Dr. Robert Quansah, explained that any attempt to
stabilise the cedi would be futile unless the economy is de-dollarised.
"Our economy is an import, based one with a lot of selling activity. If we
would want to use another country s currency to trade here in monetary
imported products, we can imagine the harm we are doing to our economy and
the help we are giving to others."

He advocated a ruthless approach to tackle the issue saying "all those who
infringed the law should be severely punished."

There is no record of any prosecutions having been pressed under PNDC Law
291, thus giving the impression the law is toothless.

A three-man "dollar committee" exist at the Bank of Ghana. But their work
is effectively hampered by seeming official sanction of defaulting.

"How can they work when the Attorney-General himself rents out his house
for dollars," a market analyst said