Governor of the Bank of Ghana (BoG), Dr Johnson Asiama, has defended a raft of tough new measures in the financial sector, insisting they are not designed to stifle the market but to protect its integrity.
Responding to concerns that the central bank may be wielding a sledgehammer to kill a house fly, he said the new directives are about plugging loopholes that undermine the efficient functioning of Ghana’s financial markets.
“If you go to every country, go to South Africa, go to Kenya, go to our peer countries. Markets are regulated. It’s about the extent to which you regulate these if you find certain practices that are compromising the efficient functioning of the markets.
“As a regulator, as a central bank, you take care of those loopholes. So that is exactly what we are doing,” he explained.
One of the most debated measures involves restrictions on large cash withdrawals from foreign currency accounts.
Dr. Asiama revealed that the directive was triggered by disturbing findings from investigations.
“If you look at one of the notices, for example, on large withdrawals, that again was in response to the feedback that we got from our investigations, where you find certain corporates who earned money through export rights into their FCA accounts, and then they would want to withdraw these in large amounts.
“Imagine a corporation wanting to withdraw $10 million over the counter. The fact is, what do they use that for? Because their payments are abroad, they don’t carry physical cash to go and settle anything.”
He stressed that corporates must transact through proper channels, while individuals will still be allowed to access modest sums without difficulty.
“We said no to such corporations; they can afford to play in that regime. But for individuals like you and me, probably you need your few $100 or $200 to do something understandable.
“You can negotiate with your bank, and then you would have a choice, whether you want to take those few dollars, or you want to pay the commission, or you want them to change it into cedis for you, you are at ease to do that.”
Addressing criticism that the central bank is reacting under pressure, Dr. Asiama dismissed the suggestion.
“No, not at all. We are only taking advantage of what we are seeing to fix the market. It is like you have a soccer match, right? There’s a context within which the game has to be played, and so that’s exactly what we are doing.”
He pointed to troubling intelligence about cash movements as justification for stronger oversight.
“If you look at the currency declaration context framework, for example, the intel we got was that some people actually take out large volumes of cash. People are carrying over a million dollars just out of Ghana, without declaring these; those are leakages, right?
“And so as a regulator, it is for us to work together with the other regulators, GRA and the others, to ensure that if you have to carry such large sums, these are accounted for. These are declared.
“The sources are known. And don’t forget, that’s also good for the anti-money laundering fight that we have on our hands.”
For him, the new measures are about setting clear boundaries for efficiency and transparency.
“We are just redefining the framework within which the market has to work and work efficiently. These are things we should have been enforcing, but given the context in which we are, we’ve seen clearly that we need to set those boundaries clearly so that the markets can function and function properly.”
Dr. Asiama was emphatic that banks were not blindsided by the reforms.
“Let me also explain that we do not just issue these notices. We met with the banks. We met with the CEOs of banks a number of times. We took on board the feedback from them.
“And so you will see that the banks are silent. They are not complaining. It’s because they were consulted. We thought through this together before the notices were issued. And so we have we are we are confident that the notices will help.”
