Black market cash in … As US dollars lacks in the system

Charles Benoni Okine reports on how some people in the black market are cashing in on the unavailability of forex in the country.

The virtual lack of foreign currencies, particularly the USdollar from the formal system (the banking system and licensed forex bureau) in the country has opened up a lucrative business opportunity for the players in the black market to cash in on the situation.

Customers who are unable to access dollars from the formal system are being forced to use the black market as their last resort and the high demand for the scarce currency has revived the basic principle in economics which states that “the higher the demand of a scarce commodity, the higher the price”.

Instead of using GhC1.9 in exchange for the US$1, people in dire need of the currency are now being compelled against their wish to by the US dollar for at an average rate of between GhC2.3 and GhC2.5, depending on the quantity in demand, for a US$1.

In corners such as the famous Zongo Lane in the Central Business District of Accra and the Nima market area, there are scores people, both young and old in the black market business who were prepared to supply whatever amount in dollars one wanted.

Infestations by the Graphic Business revealed that in a situation where one wanted to buy the US dollars in bulk, the customer is asked to wait while a group of people go round to syndicate the amount required to sell.

According to them, the dollar is not there in the system and it was so difficult to come by, hence the more Ghana cedis one required to be able to buy.

Some of the players in the black market who spoke on grounds of anonymity said they are able to access the currency from trusted sources they described as “somewhere”.

To them, no amount required in US dollars is too big to find and were courageous to invite people in need of any amount to get in touch for assistance adding that “once they can pay us what we offer, they will get what they want”.

In its quest to stabilize the fast depreciation of the cedi against the major foreign currencies, particularly the US dollar, the Bank of Ghana has drastically reduced the supplies of the currency to the commercial banks in the country.

The situation has become so dire that people who operate dollars accounts with some of the banks are unable to access their money.

For now, it is not clear where the problem seem to be coming from, leaving those in need of the US dollars frustrated.

According to the commercial banks which spoke to the Graphic Business on grounds of anonymity, the central bank only releases less than 10 per cent of what they demand to serve their customers.

They also indicated that even when the bank spends all the money given it, the Bank of Ghana demands an explanatory report as why and how the entire money was disbursed.

The banks described the situation as frustrating and asked the public to direct their grievances and frustrations at the central bank.

Meanwhile the then Governor of the Bank of Ghana now Vice President of the Republic, Mr Kwesi Bekoe Amissah-Attah debunked the rumours that the bank has not releasing dollars to the commercial banks to serve their customers.

“What we asked them to do is to avoid giving more than US$10,000 to a customer at a go because this is not done anywhere”, he said when he faced the Parliamentary Select Committee that vetted him before he was approved as the Vice President of the country.

He also denied that the central bank had asked the commercial banks to charge fees on the dollar accounts that their customers operate saying “we have not asked any bank in the country to charge customers who operate foreign accounts with them”.

Mr Amissah-Attah said the central bank had taken measures that are expected to stabilize the cedi against the dollar and added that, the move is showing some results in spite of the inconvenience to some people.

The President of the Ghana Union of Traders Association (GUTA), Mr George Ofori, has described the lack of dollars in the system as unfortunate and a worrying development which is frustrating traders and importers.

He said central bank needed to be clear on its directives to enable the public to know what the real policies are regarding the maintenance of forex accounts in the banks.

“It is not clear which of the banks is saying the truth about the shortage of the dollars at the banks and that is frustrating”, he said.

He attributed the reason for the weak cedi to the presence of the Chinese engaged in direct trading in the country saying “they are able to convert millions of Ghana Cedis into dollars, send it to their home country to import goods to retail to Ghanaians”.

He said after selling, they repatriate the profit to their home country and those are some of the reasons the cedi has, and continue to lose its strength.

Mr Ofori said unless the situation in brought under control, the situation can only get worse.