News Guide Africa

Tag: foreign exchange

Dr Razak Opoku’s Objective Assessment of Gold Trading Losses in Ghana

a). Specific Objectives of GoldBod:

1. To increase national foreign exchange reserves.

2. To stabilize the cedi.

3. To curb illegal gold smuggling.

b). Purported Losses at GoldBod:

$1.7 billion losses, reported by IMF.

c). Reasons for the $1.7 billion losses cited by IMF:

Losses caused by policy-related accounting cost or “quasi-fiscal” cost or trading shortfalls or transaction cost, and NOT as a result of direct cash loss or financial loss to the State.

Per page 10 of the report, “Losses accrued on gold trades are a combination of service and assay fees paid to GoldBod, discounts on gold sold to off-takers(exporters) and most importantly, exchange rate losses from the spread between the forex bureau rate paid to purchase gold and the cedi reference rate used for BoG(Bank of Ghana) accounting.”

Therefore, it is UNFAIR to soley blamed GoldBod for the $1.7 billion losses when Bank of Ghana is clearly in the picture.

d). Best Examples to Practically Explain the meaning of Policy-related Accounting Cost (“Quasi-Fiscal Cost”)

1. Government decision to spend about GH¢ 207 million on Fertilizer Subsidy, an amount which represents 50% price cut to benefit farmers.

2. Government decision to spend about GH¢ 25 billion on banking and financial sector clean-up exercise to protect the funds of depositors.

3. Government decision to offer a GH¢ 2 per litre cut (reduction) at the pumps to cushion consumers of petroleum products.

e). Is GoldBod Achieving its Specific Objective 1 (To Increase National Foreign Exchange Reserves):

Yes, but there is still room for improvements.

GoldBod has significantly contribute to the increase of the national foreign exchange reserves of Ghana, with estimated figure of about $10 billion.

Is it prudent strategy to lose $ 1.7 billion to attract a revenue of $10 billion? Yes or No answer.

Is there a better alternative gold trading policy for Ghana to raise $10 billion for the national foreign exchange reserves without the Country losing $1.7 billion as a result of policy-related accounting cost(quasi-fiscal cost)?

f). Is GoldBod Achieving its Specific Objective 2(To stabilize the Cedi):

Yes, so far there is relative stability of the cedi against the US Dollar and other major trading currencies since the introduction of the GoldBod initiatives.

However, there is still room for improvements.

We want to experience Ghana whereby $1 is equivalent to GH¢ 5, and also with the Cedi performing extremely better against other trading currencies.

g). Is GoldBod Achieving its Specific Objective 3 (To curb illegal gold smuggling):

Yes, but a lot more has to be done by GoldBod to completely eradicate gold smuggling.

According to the IMF, Ghana is estimated to have lost about $11.4 billion to gold smuggling between 2019 and 2024.

The discrepancy between gold exports reported by Ghana and imports recorded by the United Arab Emirates(UAE) exceeded $4 billion, according to the IMF Report.

$1.7 billion loss at Bank of Ghana caused by policy-related accounting cost versus $11.4 billion loss from 2019 to 2024 caused by gold smuggling, which of them should we be worried about the most as a citizens of Ghana?

h). Impact of GoldBod on the Activities of Galamsey

My major concerns are that:

1. what measures have GoldBod put in place to address galamsey activities in the country?, and also ensure that the GoldBod do not purchase gold from companies and individuals engaging in galamsey activities?

2. Is the operations of GoldBod significantly contributing to rising activities of galamsey in the Country?

3. How GoldBod has managed to reduce gold smuggling and by what estimate in terms of US Dollars?

i). Gold for Oil Programme and its losses from 2022-March 2025

The purposes of the Gold- for-Oil Programme(G4O) were:

1. To ease pressure on foreign exchange reserves.

2. Stabilize domestic fuel prices.

However, according to Bank of Ghana, the Gold-for-Oil(G4O) programme incurred financial losses of about GHS 2.43 billion, with the termination of the G4O programme in March 2025.

The net loss on gold trading for Gold-for-Reserves(G4R) and Gold-for-Oil(G4O) for 2024 was estimated to be around GHS 5.66 billion(approximately GHS 5.7 billion).

Conclusion

Bank of Ghana in trading partnership with Ghana Gold Board(GoldBod) has incurred a policy-related accounting costs of $1.7 billion according to the IMF, and this cost is not as result of directly losing cash(financial losses). However, this $1.7 billion loss is better compared to losing $11.4 billion between 2019-2024 to gold smuggling.

Both for Gold-for-Oil(G4O) and Gold-for-Reserves(G4R) incurred financial loss of GHS 5.7 billion but the question is that, were the policies of G4O and G4R able to achieved its intended purposes of currency stability, fuel prices stabilization, and prevention or reduction of gold smuggling?

As a Country, should we reverse to Gold-for-Oil(G4O) or Gold-for-Reserves(G4R) or maintain the Ghana Gold Board(GoldBod)?

…signed…

Razak Kojo Opoku(PhD)

August 20, 2026
BoG targets UK corridor in major drive to channel diaspora remittances into national investment

By Adnan Adams Mohammed

The Bank of Ghana (BoG) is launching a comprehensive National Remittance Strategy and accompanying roadshow, aiming not just to boost crucial foreign exchange inflows but to fundamentally transform diaspora transfers from household consumption support into long-term national investment capital.

The initiatives come as data reveals a significant drop in the UK’s share of remittances to Ghana, prompting authorities to rethink how best to harness the full economic potential of the Ghanaian diaspora.

The Declining UK Share

New data presented by BoG Governor Dr. Johnson Asiama at the London–Accra Economic Growth Summit highlights an urgent need for targeted intervention.

Remittances from the United Kingdom historically a critical source of foreign exchange accounted for only about 17.5% of total inflows between January and September 2025. This marks a notable decline from the same period in 2024, when the UK corridor contributed a robust 28%.

While still a significant source of funds that support household consumption and national balance of payments, the data underscores a loss of momentum that authorities say must be addressed through deliberate policy.

From Consumption to Investment: A New Strategy

Governor Asiama stressed that while diaspora inflows provide essential stability, their full economic potential remains largely untapped. The new initiatives, developed in collaboration with the Ministry of Finance, seek to create structured mechanisms for channelling these funds into productive sectors of the economy.

“Diaspora inflows must be harnessed beyond consumption and deliberately channelled into sustainable investment investment that drives long-term growth,” Dr. Asiama said at the London–Accra Economic Growth Summit on Tuesday, January 6, 2026.

When strategically channelled, these funds can finance small and medium-sized enterprises, expand housing supply, modernise agriculture, and create sustainable employment opportunities through skills and knowledge transfer programmes.

Rolling Out the National Remittance Strategy

To address this challenge and leverage the diaspora as a “stabilising and catalytic force,” the BoG is rolling out two key interventions over the course of the year:

A National Remittance Strategy: Developed with the Ministry of Finance, this framework aims to create incentive-based systems and strengthen regulatory frameworks to ensure remittance flows are efficient, transparent, and supportive of foreign exchange market stability.

A Remittance Roadshow: This initiative is designed to advance inclusive, continent-wide engagement with Ghanaians living abroad, fostering a stronger economic link between host nations and the homeland.

The central bank is focused specifically on strengthening the London–Accra corridor, enabling the British Ghanaian diaspora to convert ideas, innovation, and capital into shared prosperity.

As global capital flows remain volatile, positioning diaspora capital as a long-term engine for growth has become a national economic priority.

January 12, 2026
Cedi appreciation slowed remittances, we had to step in, says BoG Governor

Governor of the Bank of Ghana (BoG), Dr Johnson Asiama, says the central bank was compelled to support the foreign exchange market after the sharp appreciation of the cedi slowed remittance inflows.

Speaking in Washington DC on the sidelines of the IMF/World Bank Spring Meetings, Dr Asiama said the appreciation, which was initially seen as a positive signal, unexpectedly reduced the volume of foreign transfers coming into the country.

“Remittance inflows is another huge source of FX injection. You are looking at over US$6 billion per year in remittance inflows. However, immediately after the currency appreciated, we saw a decline,” he explained.

He said this development came at a time when the central bank was making large external payments, creating pressure on the local market.

“Between the second and the third quarter, we had to do a number of lumpy payments. There were all these large arrears in payments to some of the IPPs — billions of US dollars.

“We also had domestic debt affected bondholders that wanted to exit because the currency had appreciated. We had to allow them to go,” Dr Asiama said.

He noted that these “lumpy payments” between July and August coincided with a dry spell in the interbank foreign exchange market.

“Because all these inflows accrue to the central bank, and it was happening at the time when we saw a decline in remittance inflows, the central bank needed to step in,” he said.

“The interbank FX market had dried up during that time, and so the central bank needed to provide that support.”

Dr Asiama rejected suggestions that the Bank of Ghana had intervened excessively in the foreign exchange market, insisting the move was necessary to maintain stability.

“Yes, there were allegations about whether we were intervening in the market, but that was not exactly the case,” he said.

“All we seek to do is to limit the volatilities in the markets, to ensure that we have that smooth dynamics in the market, and that’s the framework we’ll maintain going forward.”

He disclosed that the situation has since improved, with increased activity in the interbank market.

“We have written to the mining firms, for example, to take all their inflows through the commercial banks. We are beginning to see some pickup in activity in the interbank FX market,” he said.

He explained that gold proceeds are an exception, as those go directly to the central bank’s reserves.

Dr Pandit stressed that the Bank of Ghana does not “over support” the market but acts to smooth volatility and maintain balance.

“With activity picking up in the interbank FX market, the central bank wouldn’t have to be that present,” he added.

October 18, 2025
IMF backs BoG’s forex enforcement measures

As part of measures to control foreign currency exchange market, commercial banks have started enforcing a new directive from the Bank of Ghana on foreign currency withdrawals.

The directive is coming from the Revised Charges and Reporting Requirements on Foreign Currency Cash Transactions directive from the Bank of Ghana.

A text message sent from some of the commercial banks on 11 September 2025 informed their clients that “in line with BoG guidelines, there is a 5% withdrawal fee effective immediately”.

It added that this is on foreign accounts funded by transfer or cheque deposits while foreign accounts funded with cash deposits are exempted.

A letter from the Bank of Ghana to the commercial banks dated August 27, 2025, however, stated the following updates regarding foreign currency accounts effective 25 August 2025:

A charge of 5% shall be applied to all foreign currency cash withdrawals made from account balances not funded with physical deposits.

The letter further reminded the commercial banks that they are now required to submit a utilisation report to the Bank of Ghana for each withdrawal of foreign currency cash not funded with physical cash deposits.

It added that “the report must clearly indicate the purchase and usage of withdrawn funds”.

The letter to the Banks stated that following the importation, banks are also requested to submit a utilisation report to the Bank of Ghana, detailing how the imported funds were used.

It is unclear for now what might have influenced this directive from the Bank of Ghana and whether this is part of several actions the regulator has taken to ensure that all the players abide by foreign exchange guidelines and regulations.

This follows the International Monetary Fund’s (IMF) endorsement of the Bank of Ghana’s strict enforcement of foreign exchange regulations and guidelines.

According to the IMF, these actions and measures are needed to “broaden financial integrity compliance with anti-money laundering rules and broader transparency in the FX [forex] market”.

The Director of Communications at the IMF, Julie Kozack, was responding to a question posed by some journalists during a press conference in Washington DC, USA, on 11 September 2025.

Mrs Kozack argued that these directives “are intended to reinforce the role of the cedi as the sole legal tender in the country”.

“They’re meant to tighten controls on foreign currency transactions and to promote formal channels for the provision of remittances and trade,” the Director of Communications at the IMF stated.

September 17, 2025
Blooming economy; boosted investor confidence: Mahama extolled amidst call to sustain gains

“President John Mahama praised for steering early economic recovery in his first 120 days in office.”

Adnan Adams Mohammed

Several economists, analysts and the business community have appreciated the President John Mahama administration for the remarkable and unprecedented turnaround of the economy in the first 120 days of his government.

The key stakeholders of the Ghanaian economy including the ordinary citizens have all been amazed and jubilant as the local currency (Cedi) has in the past weeks appreciated against the US dollar and other foreign currencies amidst tax cuts and notable governance reforms.

A Managing Partner of Konfidants (an advisory firm), Michael Kottoh, noted a steady recovery in business confidence following a prolonged period of economic turbulence. He pointed out that past economic challenges such as; inflation, the domestic debt exchange programme, currency instability, and turmoil in the banking sector, had severely weakened investor sentiment beginning in 2022. However, he observed that the current macroeconomic environment has shown signs of stability, which have begun to restore optimism among business owners and investors.

“In the past 120 days, we have seen some macroeconomic stabilization, which is restoring a degree of business confidence. This is essential because without confidence, businesses are unlikely to invest, expand, or create jobs, even if broader economic indicators show signs of recovery,” Kottoh remarked during a radio discussion last week.

“We can talk about all the macros, [but] if the macro-economy situation is bad, and there’s no business confidence, industry is not going to invest. They are not going to employ, they are not going to create jobs. They’re not going to be able to pay taxes.”

He concluded by emphasizing that sustained macroeconomic stability is essential to creating a business environment conducive to investment, job creation, and long-term private sector growth.

In related development, the Ghana Union of Traders’ Associations (GUTA) has commended the Bank of Ghana for its effective management of the foreign exchange market, which has contributed to the strengthening of the Ghanaian cedi against major foreign currencies since the beginning of the year.

In a press statement signed by GUTA President Dr. Joseph Obeng and Head of Business and Economic Bureau Charles Kusi Appiah Kubi, the association noted that the recent gains in the cedi’s value have brought relief and renewed confidence to the business community.

“We wish to highly commend the Governor and his team for efficiently managing the forex market to this extent,” the statement said, highlighting the role of the central bank’s prudent policies and the government’s fiscal discipline in achieving this stability.

GUTA acknowledged that the strengthening of the local currency has helped businesses recover some of the capital lost during the recent years of economic volatility. More importantly, the group said, it has helped shift perceptions that foreign currencies are a more reliable store of value, fostering renewed trust in the local economy and currency.

“This has brought hope to the business community in recouping some of the lost capital during the last couple of years,” GUTA noted, adding that the current stability has also improved predictability in forex transactions, a key concern for importers and exporters alike.

The traders’ union encouraged the government and the central bank to maintain these economic measures, expressing optimism that sustained efforts would accelerate full economic recovery, enhance productivity, and help reduce the high cost of living.

“These prudent measures, if sustained, would lead to full economic recovery and make businesses competitive,” the statement concluded.

Additionally, some economic, trade, and agribusiness analysts are also calling for deliberate policy reforms and targeted investments to sustain the early gains achieved in the first 120 days. They point to the removal of certain taxes, consistent easing of inflation, and a stronger cedi as bold measures that have boosted business confidence and improved the overall investment climate.

Associate Professor Agyapomaa Gyekye-Dako of the University of Ghana Business School has highlighted the current administration’s efforts to streamline revenue sources and control public expenditure, while, praising the improvements in inflation and foreign exchange rates but cautioned against complacency, raising concerns over the recent decline in treasury bill rates.

“To send a signal that he’s committed to fiscal reforms is important for boosting confidence in the economy, which would impact many more macroeconomic variables,” she explained.

“However, the sharp drop in treasury bill rates suggests the government is reducing domestic borrowing. While this is positive, I believe the process should have been more gradual.”

Professor Gyekye-Dako also noted that with Ghana effectively locked out of the international capital markets, reliance on domestic borrowing strategies must be carefully managed to avoid unintended consequences.

Out of the 28 promises made under the 120-day social contract, 19 have been fulfilled, with seven still outstanding.

Among the key achievements are the successful hosting of a National Economic Dialogue, the launch of the One Million Coders programme, the abolition of the betting tax, and the establishment of the Accelerated Export Development Council.

The government has also operationalized the Women’s Development Bank, providing seed capital to support its launch. These initiatives have been cited as part of broader efforts to revitalize the economy and promote financial inclusion.

However, some major initiatives remain incomplete. These include the review of taxes on vehicles, the removal of the one percent COVID-19 levy, the commencement of the 24-hour economy initiative, and amendments to the Customs Act of 2020.

The government is yet to provide revised timelines for the completion of these outstanding promises.

Renowned economist, Professor Patrick Asuming, praised the government’s efforts, noting that despite financial constraints, the administration has performed appreciably well.

“Considering the circumstances, I think they’ve done fairly well. It’s very difficult coming into power under the conditions they faced. They did well setting up the core team relatively quickly. Some of the major promises, particularly related to taxes, have seen good progress. However, naturally, some elements of the 120-day contract will take more time. Perhaps the government underestimated the duration needed for full implementation,” Professor Asuming said.

He emphasized the need to complete the remaining initiatives to sustain public trust and support economic recovery.

“Overall, I think the appointments have been good, aside from maybe one or two exceptions, particularly regarding communication of the strategy. But generally, they’ve done well, and I would give them a very good score,” he added.

May 11, 2025
Gross reserves improve to cover 4 months of imports

Ghana’s reserves hit US$8.98bn, covering 4 months of imports.

Adnan Adams Mohammed

The Bank of Ghana has announced that Ghana’s Gross International Reserves (GIR) increased to a stock position of US$8.98 billion at the end of 2024, enough to cover 4.0 months of imports.

This exceeded targets under the IMF programme. The 2024 remarkable improvement compares favourably with the 2023 reserves of US$5.92 billion (2.7 months of imports).

The Bank of Ghana’s Gold for Oil Policy and Domestic Gold Purchasing Programme contributed significantly to this through the strategic accumulation of gold.

“This is part of the Central Bank’s broader efforts to shield the economy from external shocks, enhance the country’s foreign exchange reserves and strengthen Ghana’s position in global markets”, Governor Dr Ernest Addison told journalists last week at the latest MPC press briefing.

“It is also a decisive step toward stabilising Ghana’s financial outlook, especially as global uncertainties weigh heavily on economies worldwide.”

In terms of impact, the increase in gold reserves is expected to serve as a hedge against inflation, reduce the country’s vulnerability to currency fluctuations and bolster investor confidence.

Market watchers are therefore keenly focused on the implications for Ghana’s fiscal policy and its standing in the global economy, as the Bank of Ghana continues to diversify and strengthen its reserves.

Comparable on the continent, Libya has maintained a substantial foreign currency reserve totaling $80.7 billion in 2024, positioning it as the top country in Africa in this regard. This achievement coincides with Libya’s status as one of the continent’s major oil exporters.

Meanwhile, on the global front, China had, by far, the largest international reserves in 2024, with

US$3.59 trillion in reserves and foreign currency liquidity.

Ghana has risen to become the fifth-largest holder of central bank gold reserves in Africa, with 28.1 tonnes as of October 2024. This marks a significant increase from May 2023, when its reserves stood at just under 9 tonnes, reflecting consistent efforts to bolster its holdings.

Consequently, external sector conditions remain positive, with sustained and stronger-than-programmed rebuilding of reserve buffers contributing to the stability of the domestic currency. The performance of the external sector was mainly driven by strong growth in gold exports, which also largely impacted positively on growth.

In the outlook, the external sector is expected to remain strong as commodity prices remain favourable amid improvements in production. Overall, while the external sector conditions are expected to provide an anchor to exchange rate stability, key risks in the outlook including challenges in the energy sector will have to be closely monitored.

February 3, 2025
Ghana’s gold reserves hits 65 tonnes

Gold value

Adnan Adams Mohammed

The Bank of Ghana’s Domestic Gold Purchase Programme has so far amass 65.4 tonnes of gold valued at US$5 billion.

This has significantly improved the country’s gold reserves.

Base on this success, the Vice President of has announced plans to anchor the value of the Cedi to gold, aiming to shield the country’s currency from depreciation and mitigate ongoing foreign exchange challenges.

“This approach would not only stabilise the exchange rate but also free up additional forex reserves”, Dr. Mahamudu Bawumia said when speaking at the inauguration of the Royal Ghana Gold Refinery in Accra last week.

Dr. Bawumia outlined his strategy to ensure the long-term stability of the Cedi through a new foreign exchange management system.

“I would like to propose a new foreign exchange regime management architecture for Ghana next year, in which the value of the Cedi will be anchored to gold

“I believe that the best anchor for the Cedi is gold. I want us to anchor the Cedi to gold,” Dr. Bawumia stated.

He further explained that under this proposed system, the Bank of Ghana’s gold reserves would play a crucial role in managing foreign exchange demand.

“If you have GHS3 billion and you are looking to buy forex, the Bank of Ghana can take the GHS3 billion, buy gold, and give you your forex. Demand equals supply, and the exchange rate doesn’t move,” he explained.

Dr. Bawumia stressed that this approach would not only stabilise the exchange rate but also free up additional forex reserves for other critical needs.

“You will maintain long-term exchange rate stability, which will be anchored on gold, and then we will move forward,” he added.

August 15, 2024
BoG clarifies role of FinTechs and MTOs in Inward Remittance Services.

Bank of Ghana

The Bank of Ghana has addressed recent comments and discussions in the media concerning the role of FinTechs and Money Transfer Operators (MTOs) in providing inward remittance services in Ghana.

In a release, the Central Bank aims to inform and educate stakeholders and the public about the actual involvement of FinTechs and MTOs in these services, and to correct any inaccuracies that have been circulated.

The Bank has responded to specific allegations as follows:

Media Allegation (MA): The decline in Ghana’s inward remittances has been validated by the Bank of Ghana that the newly licensed MTOs and 11 Fintech Companies have withheld approximately GH¢18 billion (US$ 3 billion) in 2022 and GH¢57 billion (US$ 5 billion) in 2023 at the expense of the country’s foreign currency reserves. The country has lost approximately US$ 8 billion in the past two years, which could have been used to shore up the persistent depreciation of the local currency against the major trading currencies.

Bank Response (BR): Ghana has seen a consistent increase in remittance inflows year-on-year (Bank of Ghana and World Bank data). The Bank of Ghana does not license MTOs since such companies are based abroad. The Bank, however, conducts due diligence on MTOs who partner local banks and/or FinTechs to deliver remittances into Ghana as part of the authorisation process. Furthermore, all remittance inflows are credited to the nostro account of partner banks of Payment Service Providers (PSPs), as such, no PSP holds any forex inflows from inward remittances. The partner bank credits the local cedi accounts of PSPs for onward transfer to beneficiaries.

Based on the above, the assertion that the country has lost US$8 billion in the last two years (i.e, US$ 5 billion in 2022 and US$3 billion in 2023) based on FinTechs and MTOs withholding same at the expense of the country’s foreign currency reserves is misleading and not grounded on facts.

MA: Ghanaians want to know why the country operates two separate foreign exchange systems, where the 23 authorized dealer banks account for all foreign exchange received from inward remittances while the “newly licensed” MTOs and Fintech companies do not account for all foreign exchange receipts from inward remittances under the Foreign Exchange Act, 2006 (Act 723).

BR: Bank of Ghana does not and has not licensed any MTO. Additionally, Ghana does not operate two foreign exchange systems. Both banks and FinTechs who engage in inward remittance services do regularly submit prudential returns to the Bank of Ghana as part of their regulatory obligations. Banks and FinTechs have the responsibility of complying with the Foreign Exchange Act, 2006 (Act 723) and other legal and regulatory requirements.

MA: The non-compliance with the Foreign Exchange Act, 2006 (Act 723) by the Digital Technology Infrastructure companies, including the Fintech and Block Chain companies have hindered the regulation of some entities and by extension reporting of remittance data. Still, there is sometimes an overlap of responsibilities between government institutions with poor coordination, thus data reported are divergent, leaving the compiler and analyst confused. In addition, a clear assignment of responsibility is necessary to know which agency is to generate remittance statistics whether the Bank of Ghana, authorized dealer commercial banks or the Ghana Statistical Service.

BR: The Bank of Ghana has the mandate to regulate all payment systems and services in Ghana, including inward remittances. The Bank continues to evolve its regulatory framework to remain relevant and effective in the face of technological advancement. The Bank collects data on inward remittances from all licensed institutions and undertakes regular surveillance activities to identify any illegal operations in the remittance ecosystem.

MA: Mobile money and other digital channels that have been made available by PSPs are now providing extensive, affordable, convenient, and flexible alternative means for accessing remittances by beneficiaries, but foreign exchange components could not be traced and tracked to the local banks’ returns or the Bank of Ghana’s nostro balances with their correspondent banks.

BR: As indicated earlier, all foreign exchange inflows associated with remittance flows are accounted for through the submission of prudential returns by the banks to the Bank of Ghana.

MA After a careful review of the Bank of Ghana’s Guidelines for Inward Remittances for PSPs (2021), PSPs and MTOs were supposed to operate two accounts (a) remittance inflow settlement account and (b) local settlement account, without recourse to their Nostro accounts.

BR: The statement is grossly inaccurate. Section 7 (1)c of Bank of Ghana’s Updated Inward Remittance Guidelines for Payment Service Providers (2023) clearly mandates PSPs involved in inward remittance termination to ensure partner MTOs credit remittance proceeds to nostro account of the partner banks for onward credit to a cedi settlement account. It also stipulates that all funds terminated should be reconciled and matched within 72 hours. However, under the 2021 Guidelines mentioned above, whereas PSPs were allowed to maintain a remittance inflow settlement account and local settlement account, all inflows were routed through the nostro accounts of their partner banks.

MA: The current practice, as operated the Bank of Ghana, has not been beneficial to the country as the MT0s and Fintech companies are holding foreign currencies in their correspondent banking accounts. Also, after careful examination of the Bank of Ghana’s consolidated foreign receipts on the Balance of Payment data from 2019 to 2023, there had been no recording, tracking and tracing of the inward remittances in the Bank of Ghana’s consolidated foreign receipts.

BR: This is misleading and not based on facts. As explained earlier, remittance inflows are credited to partner banks’ nostro accounts. The Balance of Payments data published by the Bank of Ghana accounts for remittance inflows, including those facilitated by PSPs.

MA: The Foreign Exchange Act, 2006 (Act 723) prohibits outbound remittances from Ghana unless the transaction is made through a bank while the same Act 723 prohibits inbound international remittances not made through an authorized dealer bank. The deregulation of foreign remittances had impacted negatively on the stability of the local currency and accelerated the depreciation of the Cedi after the country was barred from the international capital market in 2022.

BR: The Guidelines for Inward Remittances for PSPs is consistent with the Foreign Exchange Act, 2006 (Act 723). All banks and PSPs are strictly supervised to ensure full compliance with the provisions of the Guidelines and Act 723.

MA: Methodological compilation and analysis issues have been complicated by the licensing of more Fintech companies by the Bank of Ghana in the international remittance space since the passage of the Payment Systems and Services Act 2019, (Act 987) without taking into cognizance the existing Foreign Exchange Act 2006, (Act 723) and might have contributed to major discrepancies between the World Bank data on international remittances and Bank of Ghana data for remittances.

BR: The authorization of FinTechs to engage in remittances has not in any way complicated data collection and analysis. The engagement of MTOs, either by a bank or a FinTech, requires authorization from the Bank of Ghana. Additionally, the Bank diligently monitors MTOs that partner Ghanaian banks and FinTechs.

Touching on FinTechs’ involvement in remittance services in Ghana, the BoG has provided further clarification. According to the BoG, under Section 4 (1) (e) of the Bank of Ghana Act 2002 (Act 612) as amended, Section 2 (3) of the Foreign Exchange Act 2006 (Act 723), and Section 101(2) (i) of the Payment Systems and Services Act 2019 (Act 987), the Bank issued Updated Inward Remittance Guidelines in November 2023. These guidelines establish a framework for Payment Service Providers (PSPs), also known as FinTechs, to partner with Money Transfer Operators (MTOs) and local banks for the termination of inward remittances. The BoG explained that these guidelines complement the role of banks in providing remittance services and offer alternative channels, such as mobile money wallets, for Ghanaians to receive inward remittances. Importantly, the authorizations for PSPs are limited to inward remittance services only, with no involvement in outbound remittance services. Additionally, the guidelines require FinTechs to collaborate with partner local banks. FinTechs are not authorized to hold remittance proceeds outside of the banking system.

July 2, 2024