The Bank of Ghana (BoG) has advised exporters to repatriate proceeds in a bid to maintain stability in Ghana’s foreign exchange market.
According to the Foreign Exchange Act, 2006, Act 723, and the accompanying Letter of Commitment (LOC), exporters are obligated to repatriate proceeds of merchandise through the bank, with the exception of those with retention arrangements.
The repatriation is expected to be the total value of all merchandise exports. Despite these regulations, some exporters fail to adhere to the provisions of the regulations.
Mr. Eric Kweku Hammond, Assistant Director of the Banking Department at the Bank of Ghana, cautioned exporters that failure to repatriate may lead to legal and financial implications including a fine of 5,000 penalty units, equivalent to GHS 60,000, or imprisonment for a term not exceeding ten years, or both. He addressed exporters at a forum organised by the Ghana Shippers’ Authority (GSA) and Bank of Ghana (BoG) on 28th November 2023 in Koforidua.
Mr. Hammond highlighted the significant contributions export repatriations have on the economy such as building reserves, strengthening the local currency, boosting trading activities, and facilitating Ghana’s transformation agenda.
He also described the LOC as a permanent requirement, and if properly adhered to, may subside the various challenges recorded by exporters. He assured exporters of BoG’s commitment to collaborate with all relevant stakeholders in resolving challenges encountered with the system.
Speaking at the same forum, Mr. Charles Darling Asiedu Sey, the Tema Branch Manager of Ghana Shippers Authority, highlighted the significance of exports for national development and the lifeblood contributing to the Gross Domestic Product (GDP), job creation, and government revenue.
He added, the National Export Development Strategy (NEDS), which envisions the growth of non-traditional exports (NTEs) from $2.8 billion in 2020 to a substantial $25.3 billion in 2029 will be achieved following a competitive export-led industrialized economy.
Mr. Sey stressed that the GSA is collaborating with service providers to enhance the quality of shipping services in Ghana by reviewing export-related policies, simplifying procedures, reducing bureaucracy, and creating a more conducive environment for businesses to thrive. He called for a continuous evaluation of the export value chain to identify bottlenecks, enhance Ghana’s exportable capacity, and facilitate trade with other countries, with a specific focus on addressing non-tariff barriers.
The 1st Vice President of the Ghana Institute of Freight Forwarders (GIFF), Mr. Paul Kobina Mensah also provided insight into the basics of exports. He focused on areas such as insurance, negotiating favorable trade conditions (INCOTERMS), sales contracts, freight negotiation, high freight charges, and ways to reduce shipping charges.
Participants at the forum raised various concerns, including rising freight charges, challenges with the LOC system, the application of exchange rates above the BoG published rates, bureaucratic hurdles, and the lack of financial and technical support from the government and regulators.
