The Bank of Ghana (BOG) recently released a notice dated August 20, 2025, with serious ramifications for the Ghanaian financial and business environment.
The central bank directed commercial banks to immediately suspend payments of foreign currency cash for large corporate clients unless they have matching foreign currency deposits at the Bank of Ghana.
This bold step will signify the BOG’s continual commitment to protecting foreign reserves, steadying the cedi and implementing sustainable economic management even as international economic headwinds abound alongside migrating external shocks.
As a business coach in Ghana and the West African sub-region for more than 17 years, I see this directive as a pivotal point in the banking and business environment of the country which however brings both advantages and challenges that everybody should appreciate.
This article reviews the potential positive and negative impacts of the directive with the hope of informing business leaders, analysts, and policymakers who will face a rapidly evolving landscape.
Advantages of the directive
Preservation of foreign exchange reserves: The key benefit of this directive is that it helps save Ghana’s rapidly diminishing foreign reserve. The BOG limits potential unauthorized or speculative dollar outflows from the banking system by only allowing foreign currency cash payouts to be made to large corporates if the payouts are fully covered by matching deposits. Such prudence is imperative in an era of global economic turbulence in which access to foreign currency sources outside the country can be rather tenuous.
Promotion of correct cash management by corporates: This step delivers a major message to big companies because they now must relate their demands for foreign money to real money and deposits; It curbs the potential for businesses to access `hard currency cash without an equivalent inflow and so encourages enhanced fiscal prudence. Over time, this could motivate corporates to manage their foreign currency cash flows more prudently and may promote use of alternative settlement channels such as TBML, which are more transparent and less cash-intensive, such as e-transfers and trade financing instruments.
Waning of shadow foreign exchange markets: It could help to reduce parallel or black-market operations when hard-currency cash is traded outside formal banking channels. The Bank of Ghana seeks to minimize the spillover of dollars into parallel markets that distort the formal economy by (tightening) access to FX cash.
Disadvantages of the directive
Headline challenges in cash flow for large corporates: What this directive does, as well, is to put urgent pressure on big corporate entities that usually need foreign currency cash to finance import-based activities, such as international procurement, either for raw materials or humanitarian payments to expatriates and foreign partners. These pressures, in turn, could hinder the delivery of foreign currency cash into the hands of businesses that need it to conduct foreign currency transactions in a timely manner or risk disruptions to their operations that could cause delays, raise costs, and dent competitiveness.
Reduction in business flexibility: This may restrict big corporates that could earlier draw on credit or expect inflows and exercise a measure of discretion over their foreign currency cash to avail of these new rules. Under strict deposit backing, corporates would be required to maintain higher foreign currency reserves within the domestic banking system before gaining access to cash, potentially withholding working capital which would otherwise be used for expansion or investment.
Possibility of creating a black market for currency exchange: While the directive seeks to curb black-market foreign currency trading, an unintended consequence could be the opposite, driving some businesses to seek foreign currency cash outside the formal banking system out of necessity. If formal access becomes too restrictive, it erodes the efficacy of the directive and pushes some actors into alternative informal networks, which are harder to monitor and regulate. This could undermine the central bank’s objective and exacerbate vulnerability to exchange rate volatility and economic distortions.
Conclusion
The Bank of Ghana’s command to cease cash payment of forex to large corporations without a matching deposit is a strong directive to restore high-priority forex stability and to build financial discipline in the corporate and bank sectors.
This points to the central bank balancing safety and caution in an increasingly difficult global backdrop.
For corporates, the new policy reinstates the policy of strategic foreign exchange management and must fundamentally focus on planning, liquidity balancing the corporate to formal banking streams.
Though the directive will clearly provide benefits in terms of reserve protection, stability of the banking sector and regulation of the currency market, it will burden operational and flexibility challenges that must be managed.
The writer is a Senior Lecturer/SME Industry Coach, Coordinator (MBA Impact Entrepreneurship and Innovation), University of Professional Studies Accra
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