Bank of Ghana encourages repatriation of export funds to strengthen national reserve
Mr Eric Kwaku Hammond, the Assistant Director of the Banking Department, BoG, who was speaking at an Exporter’s forum in Accra on Thursday, said despite the existence of the Foreign Exchange Act, 2006 (Act 725) and other legislation, Ghana was still losing billions of dollars because some exporters failed to repatriate their export proceeds as required by the law.
“Unfortunately, the law does not grant the BoG the power to prosecute defaulters (those who fail to repatriate these funds), so the Bank only refer them to the appropriate authorities for redress,” he stated.
Mr Hammond said repatriating export proceeds into the country was very crucial for building a strong national currency reserve and stabilising the Ghana Cedi to become resilient to other foreign currencies, thereby ensuring macro-economic stability.
“We need to build our export currency reserves to get enough money to pay for our exports. We need surplus resources,” he said.
The Forum, which was organised by the Ghana Shippers’ Authority, brought together exporters, transport companies and regulatory agencies, including the Bank of Ghana, Ghana Standards Authority and the National Insurance Commission.
It was to discuss issues about their operations and also dialogue on how best to address the challenges faced in successfully transporting products to destination countries.
Mr Hammond explained that due to the important role that such export funding played in enhancing the Gross Domestic Product (GDP) of the country, the Letters of Commitment (LOC), which was a simple word-based Information Technology (IT) infrastructure, was introduced in 2016 by the BoG, to guide exporters in the processes of repatriating their proceeds.
He explained that although exporters had at least 60 days after the sale of their products to repatriate funding after which the system would block the account of an exporter, the BoG often allowed some flexibility in enforcing the regulation.
Mr Hammond encouraged all exporters to contact Ghana Link Limited, which hosted the platform, to apply for enlistment.
Dr Charles Kuranchie, the Chief Scientific Officer of the Standard Directorate, Ghana Standard Authority (GSA), educated exporters on the need to ensure the standard and quality packaging for their export products.
He cautioned that there could be negative consequences to the quality of products if they compromised on quality packaging leading to losses of investments.
Dr Kuranchie advised exporters to select packages based on considerations, including the weight and type of product, shelf life, as well as temperature, and also ensure proper labeling to guide handlers in taking caution.
Mr Teye Kitcher, AfCFTA, spoke about the pursuant of the Single Africa Transport Market (SATM), aimed at connecting the continent to other markets globally, through an unhindered transporting system, eliminating what pertained currently, where airline operations were limited to some countries.
He gave some of the benefits of the SATM as opened connectivity of airlines from and to countries globally, reduction in taxes, reduced airline fares and enhanced services due to competition, creation of free-market trading, enhanced tourism, employment opportunities and economic development.
Mr Charlse Ansong Dankyi, the Senior Manager, Supervision Department at the National Insurance Commission (NIC), underscored the importance of insuring goods in transit to safeguard investment against accidents.
The exporters during a panel discussion complained about the LOC impeding their swift operations and cited other challenges such as getting cargo transport for their products and the high cost of transportation, which must be reduced.
The panelists encouraged the tightening of partnership and collaboration with the various institutions to help address all concerns of exporters and other systemic challenges for effective operations.