Illegal forex business booms

Whiles Licensed Forex Bureau operators are struggling to keep up with their businesses , the businesses of illegal forex market players popularly known as “black marketers” are gaining root in major suburbs of the capital city Accra and other regional capital and major markets across the country. Operators in the black marketeering business say it is a very lucrative sector since they are not bedeviled with taxes.

A visit to some major places in Accra including Circle, Tudu, the airport area, the Main Business District of Accra, Lava, Maamobi and Nima shows scores of the black market operators in serious business. The illegal operatives charge rates which are similar or often lower than the Banks or licensed operators hence attracting more patronage from the public.

The cumulative effect of this unregulated money market on the economy dotted around major cities of the country including Accra, Tema, Kumasi, Takoradi, Tamale, Sunyani, Ho, Koforidua,Bolgatanga, among others cannot be overemphasized. The operators of the illegal market are mostly foreign nationals from countries such as Nigeria, Niger, Mali among others.

They are often seen roaming the streets along their operational areas with various notes of currencies including the US dollar, the Pound Sterling, CFA Franc, the Chinese Yuan, and the Naira in a bid to attract potential customers with better rates than what the legalized forex bureau operators. Some patrons of the illegal forex market who spoke to Business Day claimed they prefers to do business with the black market forex dealers because its more convenient, easily available when they were unable to withdraw enough dollars from the bank due to limitations on foreign currency withdrawals in the past.

Some licensed foreign-exchange bureau in the capital also alleges that the central bank’s decision sometime ago to clampdown on dollar sales by operators in order to prop up the domestic currency has also contributed to the boom of the black-market trade in the country. The practice of illegal forex business clearly contravenes the Bank of Ghana directives on forex trade but no meaningful efforts are being made to curb its occurrence.

Section 29 of the Foreign Exchange Act, 2006, noted that it is a crime to deal in foreign exchange without a licence in the country. Operators in forex trade are also required to computerise their operations through the adoption of certified software approved by central Bank according to the 2014 Bank of Ghana (BoG) regulations.

Per the regulations operators are required to keep electronic records of all purchases and sales that will include the name of the customer, the date of transaction, the amount purchased or sold and proof of identity, such as a passport, a voter’s or national ID or a driving licence among others. The black market is an illegal market of foreign exchange in various countries around the world as an underground economy. In Ghana, black market was very thriving until the financial market was liberalised in 1988 to allow the operation of forex bureaus.