Repeal new directive- Forex Bureaux Operators urged government
Accra (Greater Accra) 30 June 2000
The Ghana Association of Forex Bureaux operators has appealed to the Bank of Ghana (BOG) to withdraw the directive to forex bureaux operators to seek the identification of clients before selling or buying foreign currency from them.
They said apart from customers' fear of disclosing their identity for security reasons, they are losing their customers to parallel market operators and this is causing further depreciation of the cedi.
The members expressed these sentiments on Thursday at a meeting to discuss the impact of the new policy guidelines on forex bureaux operations.
The new directive became effective in May this year when the Minister of Finance, Mr Kwame Peprah, announced broad policy measures to curb the fast depreciation of the cedi against the major foreign currencies.
Under the new policy, customers buying or selling foreign currency are to provide a form of identification including their names and house numbers.
The bureaux are also not to sell beyond 2,000 dollars to any individual at a single transaction. A new bureau is also to deposit an initial amount of 10,000 dollars with the BOG before it commences operation.
The operators said they were finding it difficult to operate effectively under the new guidelines because their customers find it uneasy disclosing their identities and house numbers to them.
They said the problem becomes even more serious with no proper house numbering in the country.
Mr Kwesi Fosu Gyabaah, President of the association, said the inter-bank foreign exchange rates provided by the BOG are far below what the parallel markets offer.
This, he said, has not favoured the forex bureaux because customers prefer sending their foreign currencies to the black markets for higher rates. He, therefore, called on the BOG to fix rates on equal levels with the parallel markets.
Mr Gyabaah also asked the BOG to reconsider its new policy to the bureaux not to sell more than 2,000 dollars to an individual. BOG should also reverse the 10,000 dollars initial deposit to the original 5,000 dollars.
Madam Beatrice Toseafa of Pacific Forex Bureau, Tema, called for fair and a prompt distribution of foreign currencies by the BOG to the bureaux to boost their reserves.
A participant suggested to the association to hire an investment and banking lawyer to study the legal basis of forex bureaux and take legal action against the BOG when it became necessary.
The association called on BOG to educate the public on the new guidelines so that customers would not feel embarrassed when the forex bureaux operators ask them to disclose their identities.
GRi../
Accra (Greater Accra) 30 June 2000
The Institute of Statistical, Social Economic Research (ISSER) said on Thursday that the performance of the economy in 1999 coupled with the yawning gaps between stated targets suggests that "very little" has been achieved under the Medium Term Plan (Vision 2020) of the government.
Launching the State of the Ghanaian Economy Report in Accra, Professor Kwadwo Asenso-Okyere, Director of ISSER, painted a bleak future for the economy.
He said in the final year of the plan, it has become increasingly clear that the gaps between the medium-term targets and those of the annual budgets have grown wider.
He said this brings Vision 2020, the government's blueprint to make Ghana middle income country by that date into question in respect of it being realistic and relevant.
Prof. Asenso-Okyere noted that from all indications, the year 2000 is going to be very difficult, because the end of the downward trend is not yet in sight.
He said revenue mobilisation from internal sources would thus be hard to come by, since the low per capita income growth does not allow much room for personal income tax increases.
"An increase in marginal tax rates of corporate taxes at a time when businesses are reeling under an economic slowdown and cash crunch would also be less likely, since it would be unwise to kill the goose that lays the golden eggs."
He said the increase in the VAT rate to 12.5 per cent from 10 per cent would improve the country's revenue situation, but will impact negatively on non-food items in the consumer price index, while pushing up general price levels.
Prof. Asenso-Okyere said foreign inflows are very unlikely to increase to any appreciable level, considering the fact that actual inflows have always fallen short of budget projections during the whole of the 90s.
"It is expected to be worse in 2000 as development partners and prospective investors adopt a 'wait-and-see' attitude in this election year."
Prof. Asenso-Okyere said that notwithstanding the constraints, the 2000 budget envisages pretentious macroeconomic targets along the lines of past trends, which have scarcely been realised.
He said to meet the "overly ambitious expenditure projections", recourse has been to balancing items in the budget, most of which are from foreign sources representing 45 per cent of total expenditure.
"A more worrying factor is that during 2000, projected total public investments are to be financed to the extent of 76 per cent by foreign capital underlying the heavy dependence on foreign inflows."
Prof. Asenso-Okyere said in the face of these, macroeconomic targets for this year are unrealistic and unachievable.
He said a short-term solution lies in reducing government expenditure through the postponement of certain discretionary and capital expenditures.
"Considering this, it is likely that the year would end with a budget deficit whose level will be determined by how successful revenue mobilisation will be given the new VAT rate.
"GDP is projected to grow at less than four per cent, which is more likely to accrue from the agricultural sector, that is expected to experience favourable weather patterns this year."
On prospects for monetary and financial developments, he said 1999 saw early achievement with regard to monetary management and inflation control, with expected monetary growth rate almost on target and inflation down to a low of 9.4 per cent in May - the lowest since March 1992.
However, the unfavourable global economic situation that initially emerged in Asia in 1998, persisted for most of 1999 resulting in the stagnation of the overall GDP for last year.
Prof. Asenso-Okyere said this placed considerable strain on government's fiscal position, the external balance of payments situation and the exchange rate.
He said though most of the macro-economic aggregates were on target in the first half of the year, their modest gains experienced sharp reversals in the second half, as the impact of adverse external pressures mounted and there was poor fiscal management.
"With these unanticipated negative developments, Ghana's real GDP grew by just 4.4 per cent in 1999, as compared with the projected 5.5 per cent for the year".
In 2000, although a single digit inflation rate remains a primary goal of the government, inflation is expected to be 12.5 per cent at the end-of-year period.
Real GDP is also expected to grow at five per cent for this year, based on a projected growth rate of 4.2 per cent in the agriculture sector, 5.1 per cent growth in the industrial sector and 5.9 per cent in the services sector.
The other macroeconomic targets for 2000 include an overall budget deficit equivalent to 6.1 per cent of GDP and an overall balance of payments position of zero.
GRi../