The ‘black market’ controls the dollar economy in Ghana

A senior researcher at Kumasi Technical University, Dr. Smart Sarpong, has called on the government to tackle the control of the black market on the dollar in the country.

Contributing to Peace FM’s ‘Kokrokoo’ program on Friday morning, Dr Smart Sarpong applauded the government for its $2 billion financial arrangement aimed at cushioning the financial sector, particularly strengthening currency exchange offices, to strengthen the cedi against foreign currencies such as the US dollar.

The Cedi depreciated sharply against the US dollar, which severely affected prices in the country.

Finance Minister Ken Ofori-Atta, during a press briefing to outline the measures taken by the government to address the economic challenges, said that one of the measures the government is considering is to inject 2 billion dollars in the system.

“The GoG will enter into an external financing agreement of up to US$2 billion over the next 2-6 weeks in line with the approved external financing for 2022 and for liability management; The Ministry of Finance will work with the Central Bank to review the foreign exchange retention policy to ensure that multinational companies in the extractive sectors retain foreign exchange earnings from the sale of our resources in the country,” the minister said.

However, Dr. Smart Sarpong shared a problem he has with this arrangement.

He revealed that he recently went to the bank to exchange dollars, but was asked to show a visa before he could get the dollar.

For him, he does not understand why he should produce a visa before obtaining a dollar when he does not leave Ghana.

This, he said, forced him to go to the black market to buy dollars and it was during his transaction with the black market players that he realized they had a enormous control over the course of the dollar.

“…when you want dollars in the bank, you won’t get any… In fact, I haven’t been trading in dollars for so long. I suffered with my bankers.”

He explained that because the black market determines the price of the dollar, it invariably affects commodity prices because the higher they go, the higher the prices.

“I don’t understand how the black market can bring you the amount of money you need. So they fluctuate it anyway’ but the ‘financial system itself can’t get you the dollar you need,’ he said, therefore calling on the government to remedy the situation by creating the possibility for people to easily buy the bank’s dollar.

James V. Hayes