The Bank of Ghana (BoG) has issued a cautionary notice to exporters regarding failure to repatriate proceeds into the country. 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. This repatriation is expected to be 100 percent of the export value of all merchandise exports. Despite these regulations, there have been reports of some exporters flouting the law.
Mr. Eric Kweku Hammond, Assistant Director-Banking Department, Bank of Ghana, highlighted that exporters found guilty could face a fine of 5,000 penalty units – equivalent to GH¢60,000 – or imprisonment for a term not exceeding ten years, or both. Addressing exporters at a forum organised by the Ghana Shippers’ Authority (GSA) and BoG, Mr. Hammond emphasised the importance of repatriating export proceeds. This, he stated, contributes to building reserves and strengthening the local currency, ultimately boosting trading activities and facilitating Ghana’s transformation agenda.
At the event, held on 28th November 2023 in Koforidua, Mr. Hammond noted that the LOC is a permanent requirement; and if properly adhered to, challenges expressed by exporters will not arise. He assured exporters that the BoG’s door is open to collaborative efforts in resolving challenges encountered with the system.
Speaking at the same forum, Mr. Charles Darling Asiedu Sey, Tema Branch Manager-Ghana Shippers Authority, highlighted the significance of exports for national development. He emphasised their role as the lifeblood contributing significantly to Gross Domestic Product (GDP), job creation and government revenue. They play a key role in shaping the economy, fostering international trade relations and positioning Ghana on the global stage.
He also mentioned the National Export Development Strategy (NEDS), which envisions the growth of non-traditional exports (NTEs) from US$2.8billion in 2020 to a substantial US$25.3billion in 2029. This growth is coupled with a profound structural transformation aimed at positioning Ghana as a competitive, export-led industrialised economy.
Mr. Sey stressed that GSA is collaborating with service providers to enhance the quality of shipping services. This involves 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.
During the forum, Paul Kobina Mensah, 1st Vice President-Ghana Institute of Freight Forwarders (GIFF), provided insights into the basics of exports. He focused on areas such as insurance, negotiating favourable 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; application of exchange rates above the BoG rate at ports; bureaucratic hurdles; and lack of financial and technical support from government and regulators.
