Dr. Johnson Asiama, governor of the Bank of Ghana, has warned of the ongoing dollarization of Ghana’s economy, calling it a danger to the local currency’s long-term stability.
Speaking at the Graphic Business/Stanbic Bank Breakfast Meeting on Tuesday, July 15, in Accra, Dr. Asiama cautioned that the trend is still undermining the Cedi despite recent indications of stability.
“We are still grappling with a deep-rooted culture of dollarisation. Too many businesses continue to price in dollars in real estate, education, and luxury retail, despite transacting entirely within Ghana. This practice not only violates legal tender laws but also undermines confidence in the Cedi,” he stated.
Dr. Asiama expressed concern about the ineffective recycling of foreign exchange revenues into the local economy in addition to pricing practices.
He claims that although Ghana’s export earnings have increased recently, the full benefits are still not being felt.
“Even more concerning is the mismatch between forex inflows and domestic reinvestment. While export receipts have risen, a significant portion is either held offshore or not channelled back into productive activity at home, Ghana’s formal savings rate remains low, and our export value retention, particularly among SMEs and in the informal sector, is far below potential,” Dr. Asiama reiterated.
He underlined that Ghana’s formal savings rate is still too low and cautioned that export value retention is still below its potential, particularly among SMEs and the unorganized sector.
Source: newsthemegh.com