The BoG warns against dollarisation of government contracts
Economist Dr. Evans Nunoo has welcomed the government’s decision to award all public sector contracts in Ghanaian cedis. This follows finance minister Dr Cassiel Ato Forson’s announcement that government contracts will no longer be awarded in foreign currencies but exclusively in cedis.
Speaking to Tutuwaa Danso on StarrToday, Dr Nunoo stated that the move is a deliberate effort to strengthen the Ghanaian cedi and reverse the growing trend of dollarisation in the economy.
“Dollarisation is not something any country outside the U.S. should encourage. I don’t believe that we, as nationals of other countries, would be happy to see our economies dollarized. That’s why maintaining and reinforcing the use of our own currency — the cedi — is a step in the right direction,” he remarked.
Dr Nunoo stated that the cedi is Ghana’s legal tender, and all financial transactions, contracts, and pricing should reflect that reality.
“This shouldn’t require a special declaration from the finance minister in Parliament — it should be the norm. We know and trust the cedi, and our economy should reflect that confidence,” he added.
He further explained that solidifying exchange rate gains requires a conscious effort to resist dollarisation in all its forms. “A contract denominated in cedis but paid in dollars is just as problematic as one directly denominated in dollars,” he warned. “If contracts are awarded in cedis, payments must also be made in cedis.”
Dr Nunoo offered a relatable example: “If you go to a hotel and they quote a room at $100, even if you’re allowed to pay in cedis using the exchange rate, it’s still better for that room to be priced directly in cedis — say, 100 cedis. You can’t walk into a hotel in Europe or Asia and expect to pay in Ghana cedis, so why should we be so willing to accept foreign currencies here?”
He concluded by urging the government to go beyond discouraging the pricing of goods and services in dollars and to actively prohibit the normalisation of foreign currency use in everyday transactions — particularly in sectors like real estate.
“That practice must be strongly discouraged if we truly want to protect and promote the cedi,” he asserted.
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