Finance Minister Dr. Cassiel Ato Forson has announced a sweeping directive banning the pricing of government contracts in foreign currencies, as part of measures to stabilise the Ghana cedi and strengthen fiscal management.
Presenting the 2025 Mid-Year Budget Review to Parliament on Wednesday, Dr. Forson cautioned that the increasing use of foreign currencies in domestic transactions posed a major risk to macroeconomic stability.
“Mr. Speaker, the pricing of goods and services and the award of contracts in foreign currency pose significant risk to fiscal management with severe implications for the stability of our currency,” he warned.
He noted with concern that, “foreign currencies are becoming the means of transacting business in Ghana. This trend if not checked, will erode the confidence in our currency, drive inflation, and result in the loss of value in the symbol of our sovereignty.”
To curb this development, President John Dramani Mahama has directed that effective immediately, July 24, 2025, all government contracts must be awarded in Ghana cedis regardless of the source of funding.
“Mr. Speaker, President John Dramani Mahama has directed that beginning today 24th July 2025, no contract awarded by government irrespective of source of funding should be denominated in foreign currency,” Dr. Forson stated.
The Finance Minister further reminded businesses and the public that under the Foreign Exchange Act, 2006 (Act 723), it is illegal to price, advertise, receive, or make payments for goods and services in foreign currencies in Ghana without the written authorisation of the Bank of Ghana.
Feasibility and compliance mechanisms
Analysts say while the policy is laudable for protecting the cedi, its implementation will face challenges, particularly in sectors where foreign contractors, suppliers, or investors prefer dollar-denominated transactions to hedge against currency risks.
Ensuring compliance will require:
Strict enforcement by the Bank of Ghana and sector regulators, including random audits and penalties for breaches.
Clear guidelines for foreign contractors, particularly in infrastructure projects funded by external loans, to receive payments in cedis converted at transparent market rates.
Close collaboration with the Ghana Revenue Authority (GRA) to monitor contracts and invoices.
Engagement with diplomatic missions, foreign chambers of commerce, and international suppliers to align them with the policy framework.
Despite these hurdles, policymakers believe the directive will boost confidence in the local currency, reduce dollarisation, and enhance monetary policy effectiveness.
