Ghana bans contracts in foreign currency
In a bold effort to stabilize the national currency, the Minister for Finance, Dr. Cassiel Ato Forson, has announced a sweeping policy change—all government contracts will now be awarded strictly in Ghana cedis, regardless of the source of funding.
Delivering the 2025 Mid-Year Budget Review in Parliament on Thursday, July 24, Dr. Forson confirmed that President John Dramani Mahama has issued an immediate directive banning the pricing or awarding of public sector contracts in foreign currencies.
“To curb this unfortunate development, His Excellency John Dramani Mahama has directed that from today, July 24, 2025, no contract awarded by the government, irrespective of the source of funding, should be denominated in foreign currency,” Dr. Forson told Parliament.
The directive reinforces existing laws—specifically the Foreign Exchange Act, 2006 (Act 723)—which prohibits the pricing, advertising, and payment in foreign currencies without the express approval of the Bank of Ghana.
A Response to Rising Dollarisation
This move comes amid growing concerns from the Governor of the Bank of Ghana, Dr. Johnson Asiama, who recently flagged the dangerous rise of dollarisation in Ghana’s economy.
Speaking at a Graphic Business/Stanbic Bank Breakfast Meeting in Accra on July 15, Dr. Asiama warned that the persistent practice of pricing real estate, educational fees, and luxury items in U.S. dollars is eroding confidence in the cedi.
“We are still grappling with a deep-rooted culture of dollarisation. Too many businesses continue to price in dollars, despite transacting entirely within Ghana,” he said.
Dr. Asiama stressed that the practice not only violates legal tender laws but also weakens Ghana’s macroeconomic foundation, increasing vulnerability to exchange rate fluctuations and inflation.
What This Means for Ghanaian Businesses
This directive is a wake-up call for all businesses operating in Ghana, especially those in the construction, education, hospitality, and real estate sectors, where dollar pricing is commonplace. Entities are now expected to adjust pricing models, contracts, and financial reporting to comply with the cedi-only policy.
Will the New Rule Work?
While the decision has been hailed as a positive step toward strengthening the local currency and reinforcing financial sovereignty, its success will largely depend on strict enforcement and support from the private sector.
If fully implemented, this measure could help restore investor confidence, promote economic inclusion, and reduce the economy’s exposure to foreign exchange volatility.
