Bright Simons, vice president of IMANI Africa, claims that the Bank of Ghana’s forex import ban will be absolutely ineffective in halting the devaluation of the Cedi.
Bright Simons claimed in a tweet that the action will be ineffective since “most importers don’t utilize official forex.”
The Bank of Ghana (BoG) has indicated that it will stop offering foreign exchange support for imports of more than eight products.
These products include non-essentials like rice, chicken, vegetable oil, toothpicks, pasta, fruit juice, bottled water, ceramic tiles, and others.
According to a statement from BoG, “on October 30, 2022, BoG 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. This is in accordance with the President’s directive issued at his recent address to the nation on the Ghanaian economy.”
In an effort to maximize the nation’s reserves while promoting domestic manufacturing and the use of locally produced alternatives, the central bank discontinued the support this month.
However, Simons notes that Nigeria tried to adopt a similar decision around 7 years ago and failed, and he worries that this will largely happen in the case of Ghana.
“Generally speaking, Ghana develops 7 years more slowly than Nigeria. Ghana will now turn to forex limits for select imports after months of blaming speculators failed to stop the decline in the Cedi.
A. Most importers don’t use official forex.
B. It failed in Nigeria”
The importation of rice, furniture, soap, toothpicks, cosmetics, cement, private jets, steel products, plastics and rubber, margarine, palm kernel/palm oil products/vegetable oils, meat and processed meat products, vegetables and processed vegetable products, poultry chicken, eggs, turkey, and other items was banned in 2015 by the central bank of Nigeria in an effort to save the Naira and support local manufacturers.
The action was taken in order to preserve the nation’s rising foreign reserve.
The Central Bank of Nigeria (CBN) had previously prohibited the importation of 41 products, but this restriction was eventually lifted.
Source: newsthemegh.com