Chapter

GHANA

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2000
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Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: February 2, 1994.
Exchange Arrangement
CurrencyThe currency of Ghana is the Ghanaian cedi.
Exchange rate structureUnitary.
Classification
Independently floatingThe exchange rate of the cedi is determined in the interbank foreign exchange market. Since October 6, 1999, the average exchange rate is based on the average rates reported by authorized banks in their transactions with each other or with their customers. Before that, the exchange rate in the interbank market was not always applied by authorized banks to their customers. Rates are quoted by authorized dealers for certain other currencies, with daily quotations based on the buying and selling rates for the dollar in markets abroad.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements related to transactions covered by bilateral payment agreements are made through clearing accounts maintained by the Bank of Ghana (BOG) and the central banks of the countries concerned. Proceeds from exports to countries with which Ghana does not have bilateral payment agreements must be received in the currency of the importing country (if that currency is quoted by the BOG) or debited for authorized inward payments to residents of Ghana for transfers to other official accounts related to the same country and for transfers to the related clearing account at the BOG.
Payment arrangements
Bilateral payment arrangements
InoperativeGhana has agreements with Bulgaria, China, Cuba, the Czech Republic, Poland, Romania, and the Slovak Republic. The clearing balances on these agreements are being settled.
Administration of controlThe BOG records and confirms foreign capital inflows and administers foreign exchange for official payments and travel. All foreign exchange transactions by the private sector are approved and effected by authorized banks without reference to the BOG.
International security restrictionsNo.
Payment arrearsNo.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeDomestic transactions in gold must be authorized by the Precious Minerals Marketing Company, and certain domestic sales may be carried out only by permit under the Gold Mining Products Protection Ordinance.
Controls on external tradeGhanaian residents may not buy or borrow any gold from, or sell or lend any gold to, any person other than an authorized dealer. Imports of gold other than those by or on behalf of the monetary authorities are not normally licensed. The import duty on gold, including bullion and partly worked gold, is levied at a uniform rate of 25%. The gold mines export their output in semirefined form.
Controls on exports and imports of banknotes
On exports
Domestic currencyThe exportation of Ghanaian banknotes is permitted up to the equivalent of ℂ5,000.
Foreign currencyResidents traveling abroad are permitted to carry up to the equivalent of $3,000. In addition, resident travelers are permitted to carry up to $5,000 or its equivalent in traveler’s checks or bank drafts for direct purchases.
On imports
Domestic currencyTravelers may reimport up to the equivalent of the ℂ5,000 that they were allowed to export.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadThese accounts are permitted, but approval is required.
Accounts in domestic currency convertible into foreign currencyConversion is not allowed, except for approved purposes.
Nonresident Accounts
Foreign exchange accounts permittedThe accounts may be credited with authorized outward payments, with transfers from other foreign accounts, and with the proceeds from sales of convertible currency. They may be debited for inward payments, for transfers to other foreign accounts, and for purchases of external currencies upon approval by the BOG. Nonresident account status is granted to embassies, delegations, consulates, and offices of high commissioners in Ghana and to the non-Ghanaian members of their staff. It is also available to international institutions and foreign-registered companies operating in Ghana, and to nonresident Ghanaians.
Approval requiredYes.
Domestic currency accountsYes.
Convertible into foreign currencyThese accounts are permitted, but approval is required.
Blocked accountsFunds not placed at the free disposal of nonresidents (for example, certain types of capital proceeds) may be deposited in blocked accounts, which may be debited for authorized payments, including for purchases of approved securities.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for imports
Preshipment inspectionRequired for imports above ℂ5,000.
Letters of creditMost imports are effected with confirmed LCs established through authorized banks on a sight basis.
Import licenses and other nontariff measures
Negative listYes.
Import taxes and/or tariffsTariffs range from zero to 25% of the c.i.f. value of imports. A significant portion of imports, mostly for investment, is exempted. On May 1, 1999, importers without a taxpayer identification number became subject to a 5% income withholding tax on the value of their imports. At the same time, the special tax of 17.5% on certain imported goods was abolished.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsExporters are required to collect and repatriate in full the proceeds from their exports within 60 days of shipment; proceeds from exports of nontraditional products may be sold at market rates upon receipt in the banks.
Surrender requirementsNontraditional exports are not subject to surrender requirements, while 20% to 40% of gold and 98% of cocoa export proceeds are surrendered to the BOG.
Financing requirementsNo.
Documentation requirements
Letters of creditLCs are required, except for nontraditional exports.
GuaranteesYes.
DomiciliationYes.
Preshipment inspectionAn inspection is required, except for nontraditional exports.
OtherYes.
Export licenses
Export taxesOnly cocoa exports are subject to an export tax that is calculated as the difference between export proceeds and payments to farmers, together with the Cocoa Board’s costs if proceeds exceed payments.
Payments for Invisible Transactions and Current Transfers
Controls on these transfers
Trade-related paymentsFreight charges may be paid to the local shipping agents; the transfer of funds to cover such charges is normally permitted, provided that the application is properly documented.
Quantitative limitsQuantitative limits are applied for commissions.
Investment-related payments
Prior approvalPrior approval is required for the payment of amortization of loans or depreciation of direct investments.
Payments for travel
Quantitative limitsResidents traveling abroad are permitted to carry up to the equivalent of $3,000. In addition, resident travelers are permitted to carry up to the equivalent of $5,000 in traveler’s checks or bank drafts for direct purchases abroad.
Indicative limits/bona fide testYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirementsAll receipts from invisibles must be sold to authorized dealers or held in foreign exchange-denominated bank accounts in resident banks.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsNonresidents may purchase securities listed on the Ghana Stock Exchange (GSE); individual holdings and total holdings of all nonresidents in one security listed on the GSE may not exceed 10% and 74%, respectively. For companies not listed on the GSE, nonresident participation requires the following minimum equity injections to acquire shares: (1) $10,000 or its equivalent in capital goods when the enterprise is a joint venture; (2) $50,000 or its equivalent in capital goods when the enterprise is wholly owned by a non-Ghanaian; and (3) $300,000 or its equivalent in capital goods in the case of a trading enterprise involved only in the purchasing and selling of goods that is either wholly or partly owned by a non-Ghanaian and that employs at least 10 Ghanaians.
Sale or issue locally by nonresidentsThese transactions require prior approval from the BOG and the MOF. The transfer or repatriation of proceeds from sales must be reported to the BOG.
Purchase abroad by residentsThere are no controls on these purchases, but the purchase of foreign exchange to buy securities requires the prior approval of the BOG.
Sale or issue abroad by residentsThese transactions require the prior approval of the BOG.
Bonds or other debt securities
Sale or issue locally by nonresidentsThese transactions require the prior approval of the BOG.
Purchase abroad by residentsThese transactions require the prior approval of the BOG.
Sale or issue abroad by residentsThese transactions require the prior approval of the BOG.
On money market instruments
Purchase locally by nonresidentsCurrent regulations do not allow nonresidents to bring in foreign exchange for the purpose of investing in local money market instruments (BOG and government securities). However, nonresidents holding local currencies may invest in these instruments.
Sale or issue locally by nonresidentsThese transactions are not allowed.
Purchase abroad by residentsNo controls apply to these purchases, but the purchase of foreign exchange to buy these instruments requires the prior approval of the BOG.
Sale or issue abroad by residentsThese transactions are not allowed.
On collective investment securities
Purchase locally by nonresidentsThese purchases require prior approval of the BOG.
Sale or issue locally by nonresidentsThese transactions, as well as the transfer abroad of proceeds associated with these sales, including those derived from the liquidation of such securities, require BOG approval.
Purchase abroad by residentsThe purchase of foreign exchange to buy such securities requires prior approval from the BOG.
Sale or issue abroad by residentsThese transactions require the consent of the MOF.
Controls on derivatives and other instrumentsCurrently, a local market in derivatives and other instruments does not exist.
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsThe purchase of foreign exchange to effect such transactions requires BOG approval.
Sale or issue abroad by residentsYes.
Controls on credit operations
Commercial credits
To residents from nonresidentsBOG approval is required for these credits, which must be channeled through the banking system. Transactions must be supported by relevant documents.
Financial credits
To residents from nonresidentsThese credits require BOG approval.
Controls on direct investment
Outward direct investmentAll capital outflows must be approved by the BOG; applications for such transfers must be supported by documentary evidence and are considered on their merits.
Inward direct investmentCertain areas of economic activity are not open to foreigners. Foreign investments in Ghana require the prior approval of the Ghana Investment Promotion Center (GIPC) if they are to benefit from the facilities available under the GIPC Act, under which approved investments are guaranteed, in principle, the right to transfer profits and, in the event of sale or liquidation, capital proceeds. Tax holidays and initial capital allowances are also available for such investments.



The minimum qualifying amounts of investment by a non-Ghanaian are as follows: (1) $10,000 or its equivalent in capital goods by way of equity participation in a joint-venture enterprise with a Ghanaian partner; (2) $50,000 or its equivalent in capital goods by way of equity when the enterprise is wholly owned by a non-Ghanaian; and (3) $300,000 or its equivalent in goods by way of equity capital when the enterprise is either wholly or partly owned by a non-Ghanaian, employs at least 10 Ghanaians, and is involved in the purchasing and selling of goods.
Controls on liquidation of direct investmentThe GIPC Act stipulates that the assets of foreign investors may not be expropriated. Disputes over the amount of compensation are settled in accordance with the established procedure for conciliation (for example, through arbitration by the International Center for Settlements of Investment Disputes or the United Nations Commission on International Trade and Law).
Controls on real estate transactions
Purchase abroad by residentsIndividuals are allowed up to $500.
Sale locally by nonresidentsYes.
Controls on personal capital movementsThere are controls on all personal capital movements, except for the transfer of assets into the country by immigrants.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadBOG notification is required.
Maintenance of accounts abroadBOG notification is required.
Lending to nonresidents (financial or commercial credits)Yes.
Lending locally in foreign exchangeYes.
Purchase of locally issued securities denominated in foreign exchangeThese purchases are allowed within reasonable or acceptable limits.
Investment regulations
In banks by nonresidentsYes.
Open foreign exchange position limitsBased on the volume of foreign exchange transactions of banks. This is subject to periodic review.
On resident assets and liabilitiesYes.
On nonresident assets and liabilitiesYes.
Provisions specific to institutional investorsNo.
Other controls imposed by security lawsNo.
Changes During 1999
Exchange arrangementOctober 6. The average exchange rate is now based on the average rates reported by authorized banks in their transactions with each other or with their customers.
Imports and import paymentsMay 1. Importers without a taxpayer identification number became subject to a 5% income withholding tax on the value of their imports. At the same time, the special tax of 17.5% on certain imported goods was abolished.

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