Ghana cedi at the cross roads as black market stifles forex activities
The Ghana cedi continues to struggle to deal with its depreciation and has been described by some as a currency at the crossroads of becoming a worthless paper. Its continuous depreciation against major currencies like the US Dollar and the Pounds has been partly blamed on Black market activities, which continue to stifle the forex market in Ghana.
The Cedi is now trading between GHS10.00 and GHS11.00 for a US Dollar making on the Black Market, which is being controlled mostly by foreigners who trade in currencies along busy streets and corners in the Ghanaian capital.
Reacting to the negative implications of the black market activities which are stifling the forex market, Dr. Alex Akpabli, the Vice President of the Forex Bureau Association of Ghana complained about how the black market is making the work of official Forex Bureaus in the country and by extension, the challenges the Ghanaian cedi is facing today.
He noted that due to the parallel nature of the forex market in Ghana, those who want to sell or buy currency prefer to trade with the black market stakeholders. The activities of the black market player according to him is affecting their operations.
Dr. Alex Akpabli furthered that, the services offered by the black market which includes the rate they pay for say a dollar makes forex buyers and sellers troupe to such places.
While speaking to Myjoyonline on the issues, he said, “The challenge we are facing is that we have a parallel market. When someone comes to you with all these requirements, some Ghanaians are not ready to work with us, and due to the competition with the ‘black market’ people they leave and go there which is bad”.
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To help put the right systems in place to deal with the challenges caused by the black market, Dr. Akpabli called on stakeholders including the Bank of Ghana to deal with any forex bureau that is breaking the ruleset that should govern their operations. He added that if this is done, it will help reduce the unauthorized business operations that such forex bureaus engage in.
“We have a bigger challenge, so we want to seek an audience with the authority for a conversation to have these issues dealt with once and for all.
“We have met our members and have had a fruitful discussion with them. They are now aware that it’s a regulated association, hence they need to comply with the rules and regulations,” he added.
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As a result of the depreciation of the cedi over the last 8 months by some 33%, the general prices of goods and services have skyrocketed, making businesses and individuals spend even more on nearly all commodities including food and fuel. This year, the Cedi has grossed the GHS11.00/$ mark already and is expected to inch up from the current rate as we enter the festive season.
Source: Ghana Business Directory
