Vice President of IMANI Africa, Bright Simons, has offered a sharp critique of Ghana’s foreign exchange regime, warning that current central bank policies are fueling market distortions and dollar scarcity for importers.
Simons’ remarks come as traders face growing difficulty accessing US dollars at the official interbank rate, forcing many into the parallel market.
“Unfortunately, the interbank rate is overly dominated by the Bank of Ghana. Because the BoG keeps an eagle eye on this rate, the commercial banks are cautious about straying from the policy signals they are getting, even if market trends don’t align”
Bright Simons, Vice President of IMANI Africa
He explained that while the BoG publishes an official exchange rate of around 10.4 GHS/USD, that figure does not reflect the real pressures in the economy. Importers want access to dollars at that official rate, but due to limited availability at commercial banks, they are often shut out.
This distortion, Simons said, causes artificial shortages at the bank window and drives demand into parallel markets.
“Because the other prices in the economy have not moved in sync, the cedi has become overpriced. And the dollar underpriced. Naturally, the banks would be undersupplied so long as they quote the official rate”
Bright Simons, Vice President of IMANI Africa
He noted that in response to these constraints, off-market channels like the informal “aboki” market and corporate shadow markets have absorbed the unmet demand, where dollars now sell for between 11.5 and 12.5 cedis.
Currency Arbitrage and Human Ingenuity
Simons revealed that some Ghanaians have turned to creative arbitrage strategies to profit from the discrepancy between the official and parallel rates.
“My sources at a few banks have told me a fascinating story. Soon after the parallel rate started to diverge from the official rate, Ghanaian traders started to play games with ATMs and debit cards”
Bright Simons, Vice President of IMANI Africa
According to him, some would withdraw foreign currency in neighbouring countries using cedi-based cards, only to sell it on the black market. Others top up overseas virtual wallets and channel funds back into Ghana through informal routes.
“Simply, folks will do everything they can to get dollars at the official ~10 GHS/USD rate and sell in the parallel market. All this is standard economic behaviour. Nothing profound about it”
Bright Simons, Vice President of IMANI Africa
Simons was unequivocal about what must change to ease the pressure. He argued that the current forex regime must return to a more orthodox model that reflects real market dynamics.
“There is no clever way to solve it other than to return to a managed float model that seeks to approximate the real effective exchange rate,” he stated.
He added that efforts to reduce gold forex inflows through banks and reroute them through the central bank only worsen the dollar crunch in the medium term. If the government won’t revert to “orthodox managed float policy, then it must find sound commercial ways to pass some reserves,” through the commercial banks.
Concerned Importers
Simons’ analysis mirrors frustrations recently voiced by the Concerned Importers of Ghana, who warned that the scarcity of dollars in banks is pushing traders into the black market and endangering their businesses.
In a statement by Convenor Robert Tetteh Nortey and Secretary Francis Oti Boateng, the group expressed, “Our members have had to resort to the black forex market to buy dollars as high as over 13 cedis.”
They called on the government and Bank of Ghana to “let what they announce on paper be the reality,” urging that commercial banks be made to transact in forex at the published rate of 10.3 GHS/USD.
The group noted that the disparity between the BoG’s rate and the reality in the forex market is too wide and concerning.
For Simons, the current situation offers no shortcuts. Until Ghana aligns fiscal and monetary realities with published policy, the parallel market will continue to thrive and importers will remain stranded.
“All policies must be geared towards increasing commercial bank supply,” he insisted.
Unless such adjustments are made, analysts like Simons warn, Ghana’s foreign exchange dysfunction will persist, widening the gap between official projections and the economic pain on the ground.
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