BoG Is Cunningly Endorsing Dollarization

An economist, John Gakyi is accusing the Bank of Ghana (BoG) of “cunningly” endorsing dollarization and gradually bringing it back into the economy.

The BoG on Friday announced it is scrapping some of the Forex rules it enforced in February to save the depreciating cedi, reduce dollarization and ultimately save the country’s economy.

It banned the quotation of goods and services in foreign currency including dollars. But the central bank is now allowing businesses which provide services to non-resident Ghanaians to use dollars.

This new measure according to Mr. Gakyi is indicative that the BoG “does not have the strength to contain the protection of the economy against dollarization.”

He indicated that international organizations operating in foreign countries engage in transactions and operate their businesses in the currency of the countries in which they reside.

Therefore, it is not a good enough reason to relax the measures on dollarization.

Mr. Gakyi challenged the central bank to be very clear “if they do not have the strength to protect the economy against dollarization. Then they should open the window; they should not pass through that way of opening the window.”

Dollarization is said to be one of the major problems facing the country’s economy and various financial and economic experts have urged government and the central bank to focus on de-dollarization to save the economy and the cedi.