BoG moves to check ‘street dollar’: Standing task force to ensure sanity

A STANDING task force comprising staff of the Bank of Ghana (BoG), police officers and other law enforcement agencies has been constituted and resourced to bring lasting sanity into the forex trading market.

Consequently, persons who buy foreign currencies (FX) from unlicensed forex operators or sell same risk being jailed up to 18 months.

Patrons of the illegal services could also be fined about GH¢8,400 or made to suffer up to 18 months imprisonment when found guilty.

The warning from the Bank of Ghana (BoG) and the Ghana Police Service last week followed a renewed crackdown on illegal forex traders by the two agencies nationwide.

The exercise took off on September 20, in Accra when a combined team of BoG staff and police officers swooped on alleged illegal FX dealers in the Central Business District (CBD) of the national capital, leading to the arrest of 76 people.

The alleged illegal traders have been put into police custody to aid investigations which will eventually lead to their prosecution.

The exercise and the subsequent arrests followed a recent publication by the Graphic Business that drew attention to the continuous perpetration of the illegality in parts of the CBDs of Accra, Kumasi and other major cities in the country.

Meanwhile, despite the crackdown, there are pockets of recalcitrant illegal FX dealers who are still engaged in the business around the Airport roundabout, Cowlane in the heart of the CBD of Accra and Madina.

Task force

The Head of the Other Financial Institution Supervision Department (OFISD) of BoG, Yaw Sarpong, told the Graphic Business on September 23 that the exercise would not be a nine-day wonder as measures were in place to sustain it across the country.

Act 723

Sarpong said the exercise was meant to ensure full compliance with the Foreign Exchange Act, 2006 (Act 723), which empowers BoG to issue licences to interested institutions and individuals to operate forex bureaux.

According to the act, “any person engaged in the business of dealing in foreign exchange without a licence commits an offence and is liable on summary conviction to a fine of not more than 700 penalty units or a term of imprisonment of not more than 18 months or both”.

Currently, a penalty unit translates to about GH¢12.

Full compliance

Sarpong said the ongoing crackdown was aimed at ensuring full compliance with the country’s FX laws.

Although an illegality, street hawking of FX is pronounced across the country and better known to be taking place at the Rawlings Park, Tudu, Cowlane, the Kwame Nkrumah Circle, Kimbu, Timber Market and Lava, all in Accra, and Alabar and Adum in Kumasi.

Beyond the illegality, the activity weakens monetary policy implementation by BoG as their operations are outside the purview of the central bank.

As a result, it impacts negatively on the cedi, with rates on the ‘black market’ always higher than those from the formalised forex bureaux and banks.

Consequently, BoG had, in the past, used various measures to sanitise the FX market of the illegal operators but to no avail.

Hot spots

Sarpong said the current exercise would be sustained.

We have identified hot spots nationwide and we will continue to swoop on them until the practice reduces to the barest minimum. There is a concrete plan in place,” he said.

While admitting that the practice had been going on for some time now, he said: “In recent time, they have taken it to another level.

They do it openly and without fear and regard to our rules. We may not be able to completely stop it but we can reduce it.

“What we are saying is that it is illegal to deal with the unlicensed operators.

Anyone who deals with them breaks the law and those who engage in that practice also break the law and the law will deal with them,” he explained.