The Institute of Statistical Social and Economic Research (ISSER) has called on the Bank of Ghana (BoG) to evaluate and address the informal forex market to eliminate unregulated activities that disrupt the country’s exchange rate regime.
In its 2024 Mid-Year Budget Review, titled “A Critical Assessment of the 2024 Mid-Year Budget,” ISSER emphasized the need for the Central Bank to intensify its efforts against illegal forex operations that contribute to exchange rate instability.
The report recommends that the Bank of Ghana work closely with security agencies to target and shut down unregistered businesses within the financial sector.
“Assess the size of the informal forex market and institute efforts to reduce its dominance and activities that drive exchange rate instability. The Bank of Ghana, in collaboration with law enforcement agencies, should clamp down on unregistered and unregulated businesses,” the review states.
Additionally, ISSER advised that both the central bank and fiscal authorities ensure that the Development Bank of Ghana offers affordable funding to the agricultural sector to stimulate the local economy.
“Effective monetary and fiscal policy coordination is needed to support macroeconomic stability and growth. The Bank of Ghana and fiscal authorities should strengthen their partnerships and institutional coordination with global and regional financial and economic institutions, development partners, and the private sector to unlock resources to catalyse and sustain economic recovery,” the report suggests.
Moreover, ISSER highlights the importance of providing lower-cost financing to the agricultural and light manufacturing sectors to enhance local production and export competitiveness.
“The central bank and the fiscal authorities should ensure that the Development Bank of Ghana provides a cheaper source of funding to the agricultural and light manufacturing sectors to support higher value addition. This will significantly enhance local industry’s ability to produce import substitutes and improve export competitiveness,” the review mentions.
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