Annual Report on Exchange Arrangements and Exchange Restrictions, 2007
Chapter

GHANA

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
October 2007
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(Position as of December 31, 2006)

Status under IMF Articles of Agreement
Article VIIIDate of acceptance: February 2, 1994.
Exchange Measures
Restrictions and/or multiple currency practicesNo restrictions as reported in the latest staff report as of December 31, 2006.
International security restrictionsNo.
References to legal instruments and hyperlinksn.a.
Exchange Arrangement
CurrencyThe currency of Ghana is the Ghanaian cedi.
Exchange rate structureUnitary.
Classification
Managed floating with no predetermined path for the exchange rateThe exchange rate of the cedi is determined in the interbank foreign exchange market. The average exchange rate is based on the average rates reported by ADs in their transactions with each other or with their customers. Rates are quoted by ADs for certain other currencies, with daily quotations based on the buying and selling rates for the dollar in markets abroad. Ghana joined the W-ERM II of the WAMZ, which requires that the spot exchange rate between the cedi and the dollar be maintained within a margin of ±15% around the central rate. However, the authorities have yet to implement these measures.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketEffective December 29, 2006, ADs may undertake forward foreign exchange transactions.
References to legal instruments and hyperlinksForeign Exchange Act of December 29, 2006.
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 CBs of the countries concerned. All convertible currencies are accepted with respect to all internal transactions.
Use of foreign exchange among residentsEffective December 29, 2006, ADs may conduct business in foreign exchange.
Payments arrangements
Bilateral payments arrangements
InoperativeGhana has agreements with Bulgaria, China, Cuba, the Czech Republic, Poland, Romania, and the Slovak Republic. There have been delays in the settlement of clearing balances on these agreements.
Regional arrangementsGhana is a member of the WAMA.
Clearing agreementsYes.
Administration of controlThe BOG records and confirms foreign capital inflows and administers foreign exchange for official payments and travel. All other foreign exchange transactions by the private sector are approved and effected by ADs without reference to the BOG.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
On domestic ownership and/or tradeEffective December 29, 2006, residents may purchase, sell, and hold gold. Previously, the buying or selling of gold in any form other than coins and jewelry required authorization.
On external tradeEffective December 29, 2006, all gold exports are subject to BOG approval. Previously, Ghanaian residents were not allowed to buy or borrow any gold from or sell or lend any gold to any person other than an AD. Imports of gold other than those by or on behalf of the monetary authorities were not normally licensed. The import duty on gold, including bullion and partly worked gold, was levied at a uniform rate of 20% in addition to the VAT of 12.5% and a National Health Insurance Levy (NHIL) of 2.5%.
Controls on exports and imports of banknotes
On exports
Domestic currencyEffective December 29, 2006, the exportation of Ghanaian banknotes is permitted up to ¢5 million (previously, ¢5,000).
Foreign currencyEffective December 29, 2006, residents and nonresidents traveling abroad are permitted to carry up to the equivalent of $10,000 in traveler’s checks or bank drafts for direct purchases (previously, $3,000 in cash and $5,000 in traveler’s checks or bank drafts). Nonresident travelers may reexport foreign currency exceeding $10,000, provided the amount was declared on entry. ADs may freely export foreign currency.
On imports
Domestic currencyEffective December 29, 2006, travelers may reimport up to ¢5 million (previously, ¢5,000) that they had been allowed to export.
Foreign currencyEffective December 29, 2006, no restrictions are imposed on the import of foreign currency. Previously, only ADs were allowed to freely import foreign currency.
References to legal instruments and hyperlinksForeign Exchange Act of December 29, 2006.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyEffective December 29, 2006, residents are allowed to maintain foreign currency accounts. The accounts may be credited with transfers in foreign currency from abroad or from other foreign currency accounts. Balances of these accounts are freely transferable and may be debited for payments, for transfers to other foreign accounts, and for purchases of foreign currencies. In addition, residents may maintain foreign exchange accounts that can be credited with foreign exchange earnings not converted into cedis. Transfers from foreign exchange accounts in excess of $10,000 a year require documentation on the underlying transaction.
Held abroadYes.
Accounts in domestic currency held abroadNo.
Accounts in domestic currency convertible into foreign currencyConversion is allowed for approved purposes, subject to a documentation requirement.
References to legal instruments and hyperlinksForeign Exchange Act of December 29, 2006.
Nonresident Accounts
Foreign exchange accounts permittedEffective December 29, 2006, nonresidents are allowed to maintain foreign currency accounts. The accounts may be credited with transfers in foreign currency from abroad or from other foreign currency accounts. Balances of these accounts are freely transferable and may be debited for payments, for transfers to other foreign accounts, and for purchases of foreign currencies. In addition, nonresidents may maintain foreign exchange accounts that can be credited with foreign exchange earnings not converted into cedis. Transfers from foreign exchange accounts in excess of $10,000 a year require documentation on the underlying transaction.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsNo.
References to legal instruments and hyperlinksForeign Exchange Act of December 29, 2006.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsEffective December 29, 2006, for all payments, clients are required to submit documentation of the underlying transaction and complete applicable forms provided by banks for monitoring purposes. However, imports valued up to $25,000 a transaction may be undertaken through direct transfer without initial documentation. The necessary documentation should be submitted to the banks within three months from the date of transfer to qualify for subsequent transfers. Previously, imports valued at the equivalent of $5,000 or more were subject to a documentation requirement and to a destination inspection.
Letters of creditMost imports are effected with confirmed LCs established through ADs on a sight basis. Imports on a collection basis and (effective December 29, 2006) with direct transfers are also permitted.
Import licenses and other nontariff measures
Negative listImports of narcotic drugs are prohibited, and imports of small weapons are restricted.
Import taxes and/or tariffsThe maximum tariff rate is 20% of the c.i.f. value of imports in addition to a VAT of 12.5% and an NHIL of 2.5%. Importers without a taxpayer identification number are subject to a 5% withholding income tax on the value of their imports.
State import monopolyNo.
References to legal instruments and hyperlinksForeign Exchange Act of December 29, 2006.
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 all exports except gold and cocoa may be sold at market rates on receipt in the banks.
Surrender requirements
Surrender to the central bankCocoa export proceeds must be surrendered to the BOG. Effective December 29, 2006, subject to agreements with the MOF, a proportion of gold export proceeds is to be surrendered to the BOG in accordance with the Minerals and Mining Act of 2006. Previously, 20% to 40% of gold export proceeds were to be surrendered to the BOG.
Financing requirementsNo.
Documentation requirements
Preshipment inspectionAll exports are subject to customs inspection.
OtherYes.
Export licensesNo.
Export taxesCocoa exports are subject to a 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. Lumber exports are subject to a 10% to 30% tax depending on the species.
References to legal instruments and hyperlinksMinerals and Mining Act of 2006.
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 the application is properly documented.
Investment-related paymentsEffective December 29, 2006, no restrictions apply on the payment of amortization of loans, or depreciation of direct investments. Banks are required to submit a report of the transaction to the BOG.
Payments for travel
Quantitative limitsEffective December 29, 2006, residents and nonresidents traveling abroad are permitted to carry up to $10,000 (previously, $3,000) or its equivalent in traveler’s checks or any other instrument (previously, $5,000). Nonresident travelers may reexport foreign currency in excess of $10,000, provided the amount was declared on entry.
Indicative limits/bona fide testYes.
References to legal instruments and hyperlinksForeign Exchange Act of December 29, 2006.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsAll receipts from invisibles must be sold to ADs or held in foreign-exchange-denominated bank accounts in resident banks.
Restrictions on use of fundsNo.
References to legal instruments and hyperlinksn.a.
Capital Transactions
Controls on capital transactionsYes.
Repatriation requirementsNo.
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsEffective December 29, 2006, no controls apply, except in the banking sector, where nonresidents’ acquisition of a stake exceeding 10% is subject to BOG approval. Previously, nonresidents could purchase securities listed on the Ghana Stock Exchange (GSE), and individual holdings and total holdings of all nonresidents in any one security listed on the GSE could not exceed 10% and 74%, respectively. For companies not listed on the GSE, nonresident participation required the following minimum equity injections to acquire shares: (1) $10,000 or its equivalent in capital goods when the enterprise was a joint venture, (2) $50,000 or its equivalent in capital goods when the enterprise was 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 was either wholly or partly owned by a non-Ghanaian and that employed at least 10 Ghanaians.
Sale or issue locally by nonresidentsThese transactions require prior approval from the BOG and effective December 29, 2006, the Securities and Exchange Commission (SEC) (previously, from the MOF). The transfer or repatriation of proceeds from sales must be reported to the BOG.
Purchase abroad by residentsEffective December 29, 2006, the previous control requiring prior approval from the BOG for the purchase of foreign exchange to buy securities was eliminated. Banks must report these transactions to the BOG.
Sale or issue abroad by residentsEffective December 29, 2006, requirement of prior approval from the BOG was eliminated. Banks must report these transactions to the BOG.
Bonds or other debt securities
Purchase locally by nonresidentsNonresidents are allowed to invest in debt securities with maturities of three years or more.
Sale or issue locally by nonresidentsThese transactions require prior approval from the BOG.
Purchase abroad by residentsEffective December 29, 2006, requirement of prior approval from the BOG was eliminated. Banks must report these transactions to the BOG.
Sale or issue abroad by residentsEffective December 29, 2006, requirement of prior approval from the BOG was eliminated. Banks must report these transactions to 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), with the exception of debt instruments with a maturity of three years or longer. However, nonresidents holding local accounts in domestic currency may invest in these instruments.
Sale or issue locally by nonresidentsThese transactions are not allowed.
Purchase abroad by residentsEffective December 29, 2006, no restrictions apply but banks are required to report the transactions to the BOG. Previously, these transactions were subject to prior BOG approval.
Sale or issue abroad by residentsEffective December 29, 2006, no restrictions apply but banks are required to report the transactions to the BOG. Previously, these transactions were not allowed.
On collective investment securities
Purchase locally by nonresidentsThese purchases require prior approval from the BOG and the SEC.
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 and SEC approval.
Purchase abroad by residentsEffective December 29, 2006, no restrictions apply to these transactions but banks are required to report them to the BOG. Previously, the purchase of foreign exchange to buy such securities required prior approval from the BOG.
Sale or issue abroad by residentsEffective December 29, 2006, no restrictions apply to these transactions but banks are required to report them to the BOG. Previously, these transactions required the consent of the MOF.
Controls on derivatives and other instrumentsCurrently, only a limited local market in derivatives exists.
Purchase locally by nonresidentsEffective December 29, 2006, no restrictions apply to these transactions but banks are required to report them to the BOG. Previously, these transactions required BOG approval.
Sale or issue locally by nonresidentsThese transactions require BOG approval.
Purchase abroad by residentsEffective December 29, 2006, no restrictions apply to these transactions but banks are required to report them to the BOG. Previously, the purchase of foreign exchange to effect such transactions required BOG approval.
Sale or issue abroad by residentsEffective December 29, 2006, no restrictions apply to these transactions but banks are required to report them to the BOG.
Controls on credit operations
Commercial credits
By residents to nonresidentsNo restrictions apply, but banks are required to report these transactions to the BOG.
To residents from nonresidentsEffective December 29, 2006, no restrictions apply to these transactions but banks are required to report them to the BOG. Previously, BOG approval was required for these credits, which must be channeled through the banking system. Transactions must be supported by relevant documents.
Financial credits
To residents from nonresidentsEffective December 29, 2006, no restrictions apply to these transactions but banks are required to report them to the BOG. Previously, these credits required BOG approval.
Guarantees, sureties, and financial backup facilitiesBanks must report these transactions to the BOG.
Controls on direct investment
Outward direct investmentEffective December 29, 2006, the requirement that outward direct investment be approved by the BOG was eliminated. However, banks must report these transactions to the BOG.
Inward direct investmentCertain areas of economic activity are not open to foreigners. Foreign investments in Ghana must register and comply with the requirements of the Ghana Investment Promotion Center (GIPC) if they are to benefit from the incentives available under the GIPC Act, such as tax holidays and initial capital allowances.
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 (e.g., through arbitration by the International Center for Settlement of Investment Disputes or the UN Commission on International Trade and Law).
Controls on real estate transactions
Purchase abroad by residentsEffective December 29, 2006, the controls were eliminated.
Purchase locally by nonresidentsBanks must report these transactions to the BOG. Effective December 29, 2006, nonresidents are allowed to hold leases for up to 50 years.
Sale locally by nonresidentsEffective December 29, 2006, no restrictions apply to these transactions but banks must report them to the BOG.
Controls on personal capital transactionsEffective December 29, 2006, there are no controls on personal capital transactions, but banks are required to report them to the BOG. Previously, controls applied on all these transactions.
LoansEffective December 29, 2006, personal loan transactions are free of restrictions, but banks are required to report them to the BOG. Previously, these transactions were subject to BOG approval.
Gifts, endowments, inheritances, and legaciesEffective December 29, 2006, these transactions are free of restrictions, but banks must report them to the BOG.
Settlements of debts abroad by immigrantsEffective December 29, 2006, these transactions are free of restrictions, but banks must report them to the BOG.
Transfer of assetsEffective December 29, 2006, these transactions are free of restrictions, but banks must report them to the BOG.
Transfer of gambling and prize earningsEffective December 29, 2006, these transactions are free of restrictions, but banks must report them to the BOG.
References to legal instruments and hyperlinksBanking Act of 2004; Foreign Exchange Act of December 29, 2006.
Provisions Specific to the Financial Sector
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)Effective December 29, 2006, BOG approval is no longer required for these transactions but banks must report them to the BOG.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsAs part of domestic monetary regulations, foreign currency deposits are subject to a 9% reserve requirement, and the reserve balance must be held with the BOG.
Investment regulations
In banks by nonresidentsEffective December 29, 2006, BOG approval is required for an equity stake of more than 10% in the banking sector by nonresidents. All banks must have minimum capital of ¢70 billion. For foreign-owned banks, 60% of capital must consist of convertible currencies brought into Ghana.
Open foreign exchange position limitsThe daily single-currency exposure limit is 15% of the capital base, and the limit on the aggregate net open position is 30%.
Provisions specific to institutional investors
Insurance companies
Limits (max.) on securities issued by nonresidentsAt least 50% of life insurance premiums and 25% of non-life insurance premiums must be held in government securities. The rest may be invested in other local instruments subject to approval of the National Insurance Commission (NIC).
Limits (max.) on investment portfolio held abroadNIC approval is required.
Limits (min.) on investment portfolio held locallyAt least 50% of life insurance premiums and 25% of non-life insurance premiums must be held in government securities. The rest may be invested in other local instruments subject to approval of the NIC.
Pension funds
Limits (max.) on securities issued by nonresidentsEffective December 29, 2006, the previous BOG approval requirement was eliminated; however, the respective institutions must report to the BOG.
Limits (max.) on investment portfolio held abroadEffective December 29, 2006, the previous BOG approval requirement was eliminated; however, the respective institutions must report to the BOG.
Investment firms and collective investment funds
Limits (max.) on securities issued by nonresidentsEffective December 29, 2006, the previous BOG approval requirement was eliminated; however, the respective institutions must report to the BOG.
Limits (max.) on investment portfolio held abroadEffective December 29, 2006, the previous BOG approval requirement was eliminated; however, the respective institutions must report to the BOG.
References to legal instruments and hyperlinksn.a.
Changes during 2006
Exchange arrangementDecember 29. ADs were allowed to undertake forward foreign exchange transactions.
Arrangements for payments and receiptsDecember 29. Residents were allowed to purchase, sell, and hold gold.
December 29. Gold exports became subject to BOG approval.
December 29. The Foreign Exchange Act allowed ADs to conduct business in foreign exchange.
December 29. The limit on the reimport of domestic currency by travelers was increased to ¢5 million from ¢5,000, and the limit on the import of foreign currency was lifted.
December 29. Restrictions on the import of foreign currency banknotes were eliminated.
December 29. The exportation of Ghanaian banknotes was permitted up to ¢5 million.
December 29. Resident and nonresident travelers were allowed to export $10,000 in foreign currency in traveler’s checks or other instruments. Amounts exceeding this limit can be exported, provided they were declared to customs on entry.
Resident accountsDecember 29. Residents were allowed to maintain foreign currency accounts credited with transfers from abroad or other foreign currency accounts. The balances in the accounts are freely transferable. Residents were also allowed to maintain foreign exchange accounts that can be credited with foreign exchange not converted into cedis.
Nonresident accountsDecember 29. Nonresidents were allowed to maintain foreign currency accounts credited with transfers from abroad or other foreign currency accounts. The balances of the accounts are freely transferable. Nonresidents were also allowed to maintain foreign exchange accounts that can be credited with foreign exchange not converted into cedis.
Imports and import paymentsDecember 29. Documentation was required for all import payments. However, imports valued up to $25,000 a transaction were allowed through direct transfer without initial documentation.
Exports and export proceedsDecember 29. Subject to agreement with the MOF, a proportion of gold export proceeds was to be surrendered to the BOG.
Payments for invisible transactions and current transfersDecember 29. Residents and nonresidents traveling abroad were permitted to carry up to the equivalent of $10,000 in traveler’s checks or any other instrument.
December 29. The prior approval requirement on payments for amortization of loans or depreciation of direct investments was lifted.
Capital transactions
Controls on capital and money market instrumentsDecember 29. The limitations on nonresidents’ purchase of shares was eliminated, except for investments in the banking sector, where the acquisition of more than a 10% stake required prior approval from the BOG. Furthermore, the sale or issue of shares or other securities of a participating nature by nonresidents required prior approval from the SEC.
December 29. The prior approval of the BOG for the purchase, sale, and issue of capital and money market instruments by residents abroad was eliminated.
Controls on derivatives and other instrumentsDecember 29. The requirement for BOG approval for these transactions, except for the sale or issue of these instruments locally by nonresidents, was eliminated.
Controls on credit operationsDecember 29. The requirement for BOG approval for these transactions was eliminated.
Controls on direct investmentDecember 29. The requirement for BOG approval for outward transactions was eliminated.
Controls on real estate transactionsDecember 29. The requirement for BOG approval for residents’ purchase of real estate abroad was eliminated. Nonresidents were allowed to hold leases of up to 50 years.
Controls on personal capital transactionsDecember 29. The requirement for BOG approval for all these transactions was eliminated.
Provisions specific to the financial sector
Provisions specific to commercial banks and other credit institutionsDecember 29. BOG approval was required for the acquisition of more than a 10% equity stake in the banking sector by nonresidents.
Provisions specific to institutional investorsDecember 29. The requirement for BOG approval for pension funds, investment firms, and collective investment funds to invest in securities issued by nonresidents abroad was eliminated.

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