By Otchere Darko



Before the introduction of what has become known as “Forex Bureaus”, Ghanaians who used to travel outside Ghana to buy goods privately to sell or use can confirm the hardship and pain that people went through in those days, in order for them to get the foreign currencies for the importation of such foreign goods. Getting foreign currencies through non-banking sources, though always possible, was mainly through illicit sources that made such currencies “illegal” and “forfeitable”. These illicit sources were mainly found along our border towns and in some few “secret” places in Accra and other major towns. The dealers who operated “underground” never gave documentary receipts for transactions made with them. That meant that traders who used them either risked being cheated by these dealers..... because they had no means of seeking redress when cheated, or risked being molested and bullied into parting with portions of their foreign currency holdings to bribe officials of Customs, Immigration, and Police.... because they had no receipts to prove the sources of the currencies they held. There were, therefore, only a few traders who dared to buy these foreign currencies outside the official banking sources. At the same time, Bank of Ghana control mechanisms that operated within the banking and financial sector made the getting of foreign currencies through official banking avenues very difficult. These two factors acted as a major constraint on the number of people who wanted to, and could travel abroad to buy goods to come and sell in Ghana.



So, when Dr Kwesi Botchwey introduced the current Forex Bureaus in the nineteen-eighties, Ghanaian traders who previously used the illicit currency dealers were very happy. The beating, robbing, cheating and other forms of abuses by Customs and Immigration Officers, Border Guards, Police Officers, etc, ceased or abated. Foreign currency dealings operated outside the banks and other financial institutions became open, regulated by law, and taxed by the Tax Office. Cheating through foreign currency “counterfeiting”, “short-counting” and other ways used by previous dealers to make “dirty money” became checkable and prosecutable. *If there should be any past Ghanaian Finance Minister, or Commissioner who deserves commendation for his contribution to Ghana’s fiscal and monetary improvement through proper channelling of incoming private foreign currencies, especially those that took place outside official banking circles, then that person is the “indomitable” Dr Kwesi Botchwey.



*Having enumerated all the above advantages; and having, also, applauded Dr Botchwey, one of Ghana’s finest financial economists and Finance Ministers, I pose [contradictorily and shamefacedly] the following pair of debatable questions.... *“Has the introduction of Forex Bureaus in Ghana ‘really’ promoted Ghana’s economic development? Or has it disadvantaged it, in the ‘real’ sense?



In my opinion, the introduction and the use of Forex Bureaus in Ghana since the nineteen-eighties have not promoted Ghana’s economic development. Rather, they have disadvantaged the nation’s domestic production and Ghana’s real development and growth, because the Forex Bureaus have made it very easy for every Tom-Dick-and-Harry to travel everywhere in the world to buy foreign goods, including very “useless” ones, to come and sell in Ghana, without government control...... from neighbouring Burkina Faso, Cote d’Avoire, Togo, Nigeria, etc, to distant China, Korea, Qatar, Bahrain, Britain, Continental Europe, USA, Canada, etc..... while our own Ghanaian goods fail to gain access to most of these same foreign places, quite apart from our “raw materials” which foreign countries import from us because they need them to feed their own industries; but not because they, the foreign countries, want to promote Ghana’s balance of trade, or her economic parity with them. *Such one-sided trade, which has been made possible because of the ease with which Ghanaians can obtain foreign currencies to import, clearly favours the foreign countries from which our traders import to flood our markets. This is because importation generally helps to promote foreign companies and the economies of the countries from where such imports come. *Also, as a result of this one-sided trade, domestic Ghanaian production naturally suffers, through “domestic neglect and desertion”, as well as through “aggressive competition” from such superfluity of imports from the uncontrolled importation. *Again, this one-sided trade by uncontrolled Ghanaian importers impacts negatively on Ghana’s foreign exchange rates by weakening Ghana’s cedi, in relation to those fast moving foreign currencies. We are unable to see the true extent of the negative foreign exchange impact that results directly from these numerous small uncontrolled traders..... because of the constant replenishment of the supply of foreign currencies that pass through the Forex Bureaus and sent by Ghanaians in the Diaspora, who constantly make these “home remittances” to their loved ones at home. Without these constantly self-replenishing “home remittances” from Ghanaians in the Diaspora, the Forex Bureaus would have all dried up, collapsed, and ceased to function by now...... because these numerous small Ghanaian traders merely buy and use these valuable resources, without making any efforts to earn similar foreign currencies to pay back into these Forex Bureaus to make up for what they draw from them. *It should be noted that from National Economic Development point of view, the “real value” of one thousand dollars worth of Ghana cedis used by a small trader to buy pounds sterling, for example, is worth far less than the “real value” of one thousand dollars worth of United Kingdom pound sterling bought by such a small trader..... even though, mathematically, “what is bought” and “what is used to pay for what is bought” are both worth the same. This is why we must “weight” and “assess the real economic values” of these foreign currencies which our “cedi-rich” small traders are “wasting” to buy the countless “kids’ toys” from China, and the numerous foreign-rejected and killing “used tyres” and “vehicle-scraps” usually brought in from UK, Europe, Korea, USA, etc, without Government control, while vital Ghanaian industries stay in dire need of support and patronage.



It is not right, or fair that Ghanaians in the Diaspora, [whom some of us deride by referring to as “ITC” or “International Toilet Cleaners”], should continue to work hard to be able to make home-remittances; and, then, for the foreign exchange generated from these remittances to be unwittingly used “to promote and expand the production of foreign goods”; while our own Ghanaian production capacities and efforts dwindle, as a result; all because of Dr Kwesi Botchwey’s Forex Bureaus which, though very good in principle, have since their introduction failed to be regulated, monitored, controlled and directed by the Government to ensure that the services provided by them are directed to the advantage of Ghana’s economic development....... rather than to the advantage of the economic development of foreign countries.



*I strongly feel that the Government must set up a committee to find and recommend ways of controlling and directing the use to which these valuable foreign currencies coming into the country’s financial system through the Forex Bureaus can better be put...... so that these numerous “cedi-rich” small Ghanaian traders cannot drain these vital “national resources” through their “improper use” for importation of economically “unhelpful” goods. *One question that such a committee can look at is: should the Government not be using tax allowances to encourage Ghanaian traders to use these privately generated foreign currencies that are channelled through the Forex Bureaus to import industrial goods, such as plants and machinery, or material inputs that can help Ghana’s industrial sector to develop and grow...... rather than using them to import economically “unhelpful” consumer goods, some of which are even “dangerous” to use? *Another question the committee can look at is: should the Government not be encouraging and facilitating a “give-and-take culture of external trading” by Ghanaian traders who go abroad to buy foreign goods to sell here? By this “give-and-take culture of external trading”, I mean that our Government, through bilateral arrangements with other countries, should create the situation that allows and encourages such small Ghanaian traders to send some Ghanaian goods along with them to sell in the countries from where they go to buy to sell in Ghana, so that such traders can generate foreign currencies from those countries to use to finance fully, or partly the goods they import from those countries. There are many areas the committee can look at and advise the Government about how best our Forex Bureaus can be used to promote Ghana’s domestic production and economic development. *In the event of the current Government doing nothing immediately to halt the on-going negative foreign exchange trend that favours foreign economies, then in my opinion, how to monitor, manage, and control the use of private foreign currencies generated by this country through its Forex Bureaus is one of the most important national issues that should need the attention of all political parties in Ghana, and their leaders; and which, therefore, must be addressed by the 2012 election manifestoes of all parties that stand for the promotion, development and growth of Ghana’s own businesses, rather than for the promotion of the businesses and economies of foreign countries.



Source: Otchere Darko; [This writer is a centrist, semi-liberalist, pragmatist, and an advocate for “inter-ethnic cooperation and unity”. He is an anti-corruption campaigner and a community-based development protagonist. He opposes the negative, corrupt, and domineering politics of NDC and NPP and actively campaigns for the development and strengthening of “third parties”. He is against “a two-party only” system of democracy {in Ghana}....... which, in practice, is what we have today.]