? Restrictions on foreign exchange transactions

By C. S. Buabeng & Francis Eshun-Baidoo

THE Finance Minister, Mr Kwame Peprah, yesterday announced what he described as ?tough measures? to salvage the foreign exchange-crunched economy to reduce the pressure on the cedi.

The measures include restriction on foreign exchange transactions at forex bureaux, discouraging non-essential imports, mobilising more foreign exchange, improving revenue performance and cutting government expenditure. At a press conference in Accra, Mr Peprah flanked by the Trade and Industry Minister, Mr. Dan Abodakpi; Communications Minister, Mr John Mahama; Prof. Kofi Awonoor, a Presidential Aide and Dr Kwabena Duffuor, Governor of the Bank of Ghana, said ?there is the light at the end of the tunnel in spite of all the difficulties?.

One of the measures is that all retained export earnings are to be repatriated into Ghana and kept in foreign accounts with Ghanaian banks which will be required to pay interest on them. All outstanding divestiture receipts payable in foreign exchange are to be settled within one month.

The law preventing travellers from Ghana from taking out foreign exchange more than $3,000 or in excess of the foreign exchange declared by them on entering Ghana is to be enforced just as the one on surrender of forex earned from rent income is to be rigidly enforced. Again, buyers will be required to provide identification. Furthermore, no individual or company will be allowed to buy more than $2,000 at a forex bureaux in single transactions or on the same day, said the minister. Besides, Mr Peprah indicated that bureaux are expected to submit particulars of forex buyers to the Bank of Ghana at the end of every week. It is also an offence to pay forex rate different from those advertised on their notice boards.

Mr Peprah, who had decried the economy as import dependent, buttressed his assertion with provisional trade figures for last year which show that almost two-fifths of consumer imports were on clothing, frozen fish, wheat and rice. Food, he said, constituted 30 per cent of consumer goods import.

The minister indicated that a priority list of users of foreign exchange has been drawn up for those whose need will be met directly from foreign exchange resources being mobilised. In addition, special tax on identified non-essentials imported items is to be enforced just as approved standard for all imported goods, said Mr Peprah.

Stern measures are to be taken against unfair trade practices bordering on ?dumping? by some foreign companies. The minister said the ?Buy Made in Ghana? goods directive restricted to the Civil Service is to be extended to the entire public sector. On revenue performance, he said, the setting up of Parliamentary Oversight Committee on the performance of revenue collecting agencies with special power to deal with delinquent or corrupt officials will be vigorously pursued.

A task force to plug the revenue loopholes within a time-bound frame in addition to revenue agencies, are to step up their campaigns. All due divestiture receipts payable in cedis as well as dividends due to government are to be paid within two months. Mr Peprah asked all revenue agencies to submit proposals for expanding their tax bases or roping in all taxable income earners or dutiable enterprises within two weeks.

The minister announced that specific expenditure items are to be identified either to be cut or their implementation delayed by a joint Parliament/ Finance Ministry. He aslo said restrictions on the use of mobile phone by government officials, participation in overseas conferences, one-fourth cut in fuel allocation to ministers and other Government officials are to be enforced. He submitted that district assemblies are to be prohibited from awarding contracts beyond the limits of their common fund allocations, unless they show evidence that such contract can be financed from their own resources. On his part, Mr Mahama appealed to Ghanaians to patronise locally-made goods because by so doing, they would keep some Ghanaians in job.

He was not happy that sometimes fellow Ghanaians urged their colleagues to go in for imported items when locally-made ones, which are equally good, abound.