Governor Asiama Decries Dollarisation in Domestic Transactions, Cites Threat to Monetary Stability
Governor of the Bank of Ghana (BoG), Dr Johnson Pandit Asiama, has raised alarm over the growing trend of unofficial dollarisation in the country, warning that the increasing use of foreign currencies—particularly the US dollar—in local transactions is eroding confidence in the Ghanaian Cedi and undermining the country’s monetary stability.
Speaking at the Graphic Business Breakfast Meeting held in Accra on Tuesday, July 15, Dr Asiama expressed concern about the continued pricing of goods and services in dollars across several key sectors, including real estate, private education, and luxury retail.
“We are still grappling with a deep-rooted culture of dollarisation. Too many businesses continue to price in dollars in real estate, education, and luxury retail despite transacting entirely in Ghana,” the Governor lamented.
He stressed that such practices contravene Ghana’s legal tender laws, warning that continued disregard for these regulations could further weaken public trust in the local currency.
“This practice not only violates the legal tender laws but also erodes confidence in the Cedi,” Dr Asiama stated.
The Central Bank Governor also pointed to a worrying disconnect between Ghana’s growing foreign exchange earnings and domestic reinvestment. While acknowledging a rise in export proceeds, he noted that much of the forex generated is held offshore and not repatriated to support local economic activity.
“Even more concerning, colleagues, is the mismatch between forex inflows and domestic reinvestment. While exports have risen, a significant portion is either held offshore and not channelled back into productive activities at home,” he noted.
Dr Asiama, therefore, called for stricter compliance with local currency laws and urged regulatory authorities to intensify enforcement to curb the increasing dollarisation of the economy.
“We must deepen enforcement efforts. The Cedi is our sole legal tender and must be upheld as such in all local transactions,” he emphasised.
