- Central Bank Backs Cedi Settlement for China Imports as Ghana Seeks to Reduce Dollar Dependence
The Bank of Ghana is supporting arrangements that allow Ghanaian importers to pay for goods from China in cedis, as the central bank seeks to reduce businesses’ direct reliance on the US dollar for bilateral trade.
Johnson Pandit Asiama, Governor of the Bank of Ghana, said Stanbic Bank had begun piloting a service under which importers could settle payments for Chinese goods using the Ghanaian currency instead of independently sourcing dollars.
“As we speak, if you want to buy anything from China, just go to Stanbic Bank with your cedis,” Dr Asiama said at the press briefing following the 132nd meeting of the Monetary Policy Committee. “You are able to do that.”
GCB Bank is also developing a similar arrangement as Ghana seeks to deepen financial and commercial relations with China, one of its most important sources of imported goods.
The initiative could simplify payments for importers and reduce the immediate pressure businesses place on the retail foreign-exchange market. Its broader effect on the cedi, however, will depend on how the banks settle the transactions with their Chinese counterparts.
“As the central bank, we’re doing a number of things,” Dr Asiama said, adding that the Bank of Ghana would continue working with relevant institutions to support Ghana–China trade.
Many Ghanaian businesses importing machinery, electronics, vehicles, industrial inputs and consumer products from China have traditionally needed US dollars to pay their suppliers.
Even where neither party is American, the dollar frequently serves as the invoicing and settlement currency.
The arrangement forces Ghanaian importers to convert cedis into dollars before the funds can be transferred to China. During periods of limited foreign-exchange availability, businesses may face delays, unfavourable exchange rates or difficulty obtaining enough dollars through regulated channels.
Allowing importers to approach a domestic bank with cedis could remove some of that operational burden.
The bank would receive the local currency and manage the cross-border settlement, potentially through its international network, correspondent banks or other currency-conversion arrangements.
For importers, the advantage is straightforward: they would no longer have to search independently for dollars before paying Chinese suppliers.
The system could improve payment certainty, shorten transaction times and reduce the incentive for businesses to obtain foreign currency through informal markets.
It may also give regulators and commercial banks better visibility over Ghana–China trade payments, since more transactions would move through supervised financial institutions.
The more important economic question is what happens behind the transaction.
An importer paying cedis at a Ghanaian bank does not automatically eliminate the foreign-currency requirement. Unless the Chinese exporter accepts cedis directly, the receiving bank must ultimately deliver a currency the supplier can use — most likely the renminbi or another internationally accepted currency.
If the Ghanaian bank converts the importer’s cedis into dollars and then converts those dollars into renminbi, the arrangement may simplify the process for the customer without materially reducing the economy’s underlying demand for US currency.
In that case, dollar demand would shift from individual importers to the balance sheet of the participating bank.
The initiative would have a more significant de-dollarisation effect if the banks can settle transactions directly in renminbi, access renminbi liquidity without first purchasing dollars or offset payments against Chinese demand for Ghanaian exports.
The distinction is critical.
A cedi-facing payment service can improve convenience and formalise trade flows even if the dollar remains involved at the back end. But it will only reduce Ghana’s structural reliance on the dollar if the final settlement mechanism avoids or materially limits the use of US currency.
The Bank of Ghana and participating banks will therefore need to provide clarity on how the currency conversion is conducted, how exchange rates are calculated and which party carries the associated foreign-exchange risk.
The service will not eliminate currency risk. If a Chinese supplier invoices an order in renminbi, the Ghanaian importer’s cedi obligation must still reflect the exchange rate between the two currencies. A weakening cedi would make the same shipment more expensive, regardless of whether the importer personally buys the foreign currency.
The question is who prices and manages that risk.
Banks may quote importers a cedi amount based on prevailing exchange rates and include a margin covering conversion costs, liquidity risk and settlement charges. Businesses will need transparent pricing to determine whether the arrangement is cheaper than conventional dollar settlement.
Importers may also require forward contracts or other hedging products to fix the cedi cost of future payments.
Without such instruments, companies ordering goods weeks or months before delivery could remain exposed to exchange-rate movements between the date of purchase and the date of payment.
The success of the initiative will therefore depend not only on the availability of a cedi payment window, but on the competitiveness and predictability of the rates offered.
Ghana’s foreign-exchange market regularly experiences pressure from demand for imports, fuel, debt service, profit repatriation and other external payments.
China’s importance as a source of goods means payments connected with bilateral trade can contribute significantly to demand for foreign currency.
If a meaningful portion of these transactions can be settled directly in renminbi, Ghana could reduce the number of payments that must pass through the US dollar.
That may improve efficiency by removing one stage of currency conversion. Instead of moving from cedi to dollar and then from dollar to renminbi, banks could potentially convert directly between cedis and renminbi or use dedicated settlement balances.
The arrangement could also support the Bank of Ghana’s efforts to diversify the currencies used in international transactions and reduce the economy’s vulnerability to periods of global dollar strength.
But the size of any relief will depend on scale. A small pilot involving a limited number of importers may demonstrate operational feasibility without materially changing Ghana’s overall foreign-exchange demand. The macroeconomic impact will become meaningful only if the service expands across banks, merchants and transaction categories.
Payment innovation cannot substitute for a balanced trading relationship.
If Ghana consistently imports substantially more from China than it exports, the country will still need to provide foreign currency or other internationally acceptable assets to settle the difference.
Local-currency payment arrangements may change the route through which the obligation is settled, but they do not remove the economic cost of the imports.
The most durable support for the cedi would come from increasing Ghanaian exports to China and earning more renminbi or other foreign currency through trade.
Ghana exports commodities and agricultural products but imports a much wider range of manufactured and intermediate goods. Expanding processed agricultural exports, manufactured products and other value-added goods would help create a more reciprocal trade relationship.
The Governor said the central bank intended to engage its Chinese counterpart on opportunities emerging from China’s zero-tariff policy, while the Ministry of Trade, Agribusiness and Industry would also play a role in helping Ghana benefit from the arrangement.
That engagement could prove more economically significant than the payment pilot itself if it improves market access for Ghanaian exporters.
A settlement system works best when currency flows move in both directions. Renminbi earned by Ghanaian exporters could be used to finance imports from China, reducing the need for additional currency conversion.
Without stronger exports, the banking system must continue finding renminbi or dollars to settle Ghana’s net import obligations.
For businesses to adopt the service, the participating banks will need to explain the applicable exchange rates, transaction fees, settlement times, documentation requirements and procedures for resolving payment disputes.
Importers will compare the complete cost of the cedi-payment arrangement with conventional dollar transfers.
Chinese suppliers must also be willing to accept the final settlement currency and recognise the participating banks’ payment channels.
Regulatory co-operation between the Bank of Ghana and Chinese monetary and banking authorities could help establish reliable clearing arrangements and reduce settlement risk.
The programme nevertheless represents a practical step towards broadening Ghana’s cross-border payment options.
It acknowledges that businesses trading with China should not necessarily have to depend exclusively on a third-country currency to complete every transaction.
For Ghanaian importers, the immediate benefit may be convenience and improved access to formal payment channels. For the wider economy, the ambition is larger: reducing pressure on scarce dollars and making bilateral trade more resilient.
Whether that ambition is achieved will depend on what happens after the importer hands over the cedis.
If the transaction is ultimately settled through another dollar purchase, the system will have changed the customer’s experience more than Ghana’s external-currency exposure.
If it creates a genuine cedi–renminbi settlement channel supported by two-way trade and adequate liquidity, it could mark a more consequential shift in how Ghana finances commerce with its largest Asian trading partner.
