For the umpteenth time, the Bank of Ghana (BoG) has issued yet another stern warning to individuals and institutions engaged in unauthorized foreign exchange transactions. In its latest notice, the regulator reminded Ghanaians that pricing, invoicing, or receiving payments in foreign currencies, especially U.S. dollars, for domestic goods and services remains strictly prohibited under the Foreign Exchange Act, 2006 (Act 723).
From school fees to real estate rentals, airline tickets, online sales, and even hotel accommodation, the Central Bank has drawn a clear red line that the Ghana cedi is the only legal tender for transactions within the country.
Violators risk sanctions and prosecution under the new directive.
The Real Problem: Weak Cedi, Strong Dollar
Yet, beneath the repeated directives lies a stubborn truth that bans and threats alone have not been effective in ending the dollarization menace. As IMANI Africa has revealed earlier, businesses are not irrational.
When the cedi is weak and unpredictable, many see invoicing in dollars not just as convenience but as insurance against depreciation. As The Highstreet Journal earlier highlighted in a feature (“Curbing Dollarization: Why Ghana’s Legal Crackdowns Will Just Be Chasing Shadows Without Any Success”), IMANI noted that the dollar pricing is often psychological.
It is a means of shielding businesses from the shocks of rapid depreciation, protecting their balance sheets from losses that come with wild exchange rate swings. This means that the dollarization of Ghana’s economy is just a symptom of a bigger problem, which must be tackled instead of the symptom.
When the Cedi Strengthens, Dollar Pricing Fades
Numerous evidences confirms that when the cedi remains strong and stable, pricing in dollars is directly tackled. In April this year, when the cedi began a rare rebound against the dollar, some businesses that previously insisted on dollar pricing shifted back to invoicing in cedis.
Many businesses in the real estate sector reverted to pricing in cedi. Those selling assets such as cars, who previously priced in dollars, reverted to the cedi. The reasoning was simple: confidence in the currency had improved, making it unnecessary to peg prices to the dollar.
This proves a critical point that the currency’s strength, not regulatory crackdowns, ultimately determines whether businesses feel secure enough to transact in cedis.
Ensuring Compliance Even Challenge
One question many are asking is whether the Bank of Ghana itself has the resources to even effectively enforce this directive across the economy. With thousands of transactions happening daily in real estate, retail, education, and online markets, can the central bank realistically police every instance of dollar pricing?
At best, it can make examples of a few violators, but without a stronger and more stable cedi that naturally discourages dollarization, its enforcement capacity will always be overstretched and largely symbolic.
Chasing Shadows Without Stability
The bottom line is dollarization thrives when trust in the cedi wanes. If the local currency keeps sliding, no amount of notices, penalties, or legal threats will convince market players otherwise. At best, enforcement will drive dollar pricing underground, creating a shadow market. At worst, it will further complicate transactions and distort pricing. If the BoG wants to end the culture of dollar pricing, the fight must go beyond notices.
The ultimate solution is to build and maintain a strong and stable cedi. That means fixing the fundamentals by boosting export earnings, reducing over-reliance on imports, strengthening reserves, and restoring fiscal discipline. A strong cedi automatically restores confidence, making dollar pricing unnecessary.
