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BoG announces guidelines for allocation of foreign exchange to BDCs

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The Bank of Ghana has announced guidelines for allocation of foreign exchange (FX) through forward auctions to Bulk Distribution Companies.

This will govern the conduct of foreign exchange forward auctions on the interbank foreign exchange market for the BDCs licensed by the National Petroleum Authority (NPA).

According to the Central Bank, this bespoke multipleprice forward FX auctions is intended to minimise the uncertainty of the future availability of FX and aid price discovery especially for the general pricing window within the downstream sector.

All participants shall therefore be expected to fully abide by rules such as publication of foreign exchange auction calendar, eligibility, eligible currency and quotation convention, auction schedule and frequency and bidding process.

The rest are allocation methodology, auction committee, communication of auction results to the market, confirmation and settlement of trade and funding.

For publication, the BoG will publish an auction target incorporating inputs received from the NPA for the foreign exchange forwards on a bi-weekly basis. The target will be published four days preceding the pricing window for the downstream sector on the Bank of Ghana website to enable market participants plan adequately. The announcement shall subsequently list the date and time, auction volume target, settlement and other relevant information.

In terms of eligibility, participation in the auction is restricted to only authorised Bulk Distribution Companies licensed by the NPA through their authorized Licensed Foreign Exchange Dealing Banks.

With regard to the auction schedule and frequency, it will be done in consultation with the NPA on pricing window schedules. The FX auction shall be held bi-weekly and conducted no later than three working days before the 1st and 16th of each month.

Also, the auction committee will comprise of BoG staff appointed by the Governor, and shall oversee the conduct of the auction and decide on the cut-off rate, guided by an allocation methodology.

Again, only authorized BoG officials may be present at the time of the auction allocation process. Details of individual bids of banks will be kept confidential.

FX Auction results will also be published on REFINITIV dealing system by 3.00pm on the day of the auction.

For other provisions, the FX market conduct rules will apply to foreign exchange funds acquired or sold at the auction.

In particular, the banks have been reminded to comply strictly with the regulations in respect of foreign exchange exposure limits as prescribed by the BOG (NOPs). C

Also, all authorized Foreign Exchange Dealer Banks shall also comply with the provisions of the Code of Conduct for the Interbank Foreign Exchange market in Ghana.



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20m farmers in Africa to benefit from AfDB initiative to avert food crises

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Dr. Akinwumi Adesina

About 20 million farmers on the continent are expected to benefit from an emergency food production fund project by the African Development Bank this year.

The project, which seeks to avert any looming food crises that may come as a result of the global geopolitical tensions will ensure that staple foods are cultivated annually to serve the continent.

President of the Africa Development Bank (AfDB) Group, Dr. Akinwumi Adesina disclosed this to journalists in Accra at a breakfast meeting ahead of its annual meetings in Ghana.

“The Russian war in Ukraine has led to new challenges for Africa, especially in terms of high energy prices, high fertiliser prices, and disruption of food imports. With 30 million tonnes of food imports, especially wheat and maize that will not be coming from Russia and Ukraine. Africa faces a looming food crisis,” he said.

He cautioned that Africa does not need bowls in hand, but needs seeds in the ground.

He maintained that Africa should not be begging for food; but rather must produce its own food, adding that there is no dignity in begging for food.

“That is why the African Development Bank Group, and the African Union Commission, developed the Africa Emergency Food Production Plan. The plan will provide 20 million farmers with improved seeds and fertilisers, as well as other farm inputs, to produce 38 million metric tons of food, worth $12 billion.

This will include 11 million metric tons of wheat, 18 million metric tons of maize, 6 million metric tons of rice, and 2.5 million metric tons of soybeans” he assured.

The AfDB last week also launched a $1.5 billion African Emergency Food Production Plan to help Africa produce food to avert a looming food crisis.



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NPA sanctions 7 PSPs for unlawful lifting of petroleum products

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The National Petroleum Authority (NPA) has fined seven Petroleum Service Providers (PSPs) for engaging in illicit Third-Party trading of petroleum products, and unlawful lifting of petroleum products.

The companies are Moari Oil Company Ltd, Rodo Oil Company Ltd, MBA Global Ltd, Cigo Energy Ltd and Torrid Global Ltd. The rest are Naddif Co Ltd, and GAT Oil.

A release issued by the NPA directed that “Moari Oil Company Ltd pay a fine of GHS50, 000, comprising of GHS10,000 for engaging in Third-Party Supplies and GHS40,000 for the unlawful lifting of petroleum products.”

Rodo Oil was slapped with a fine GHS350, 000 comprising of GHS10,000 for engaging in Third-Party Supplies and GHS340,000 for the unlawful lifting of petroleum products, as well as a one month suspension of operations.

MBA Global Ltd was also fined GHS85,000.00 comprising of GHS 10,000.00 for engaging in Third Party Supplies, GHS75,000.00 for the unlawful lifting of petroleum products and one month suspension of operations, while Cigo Energy will pay a fine of GHS245,000.00 comprising of GHS10,000.00 for engaging in Third Party Supplies and GHS235,000 for the unlawful lifting of petroleum products.

Torrid Global Ltd was sanctioned to pay GHS550,000.00 comprising of GHS 10,000.00 for engaging in Third Party Supplies and GHS540,000.00 for the unlawful lifting of petroleum products, while Naddif Co. Ltd is expected to pay  GHS150,000.00 comprising of GHS 10,000.00 for engaging in Third Party Supplies, GHS140,000.00 for the unlawful lifting of petroleum products and one month suspension of operations.

“That GAT Oil pay a fine of GHS120,000.00 comprising of GHS 10,000.00 for engaging in Third Party Supplies, GHS110,000.00 for the unlawful lifting of petroleum products and one month suspension of operations”, the statement said.



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BoG increases policy rate by 200 basis points to 19%, cost of credit to go up

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The Monetary Policy Committee of the Bank of Ghana has for the second consecutive time increased the Policy Rate – the rate at which it lends to commercial banks by 200 basis points to 19%.

This was announced by the Governor, Dr. Ernest Addison.  

The increase in the Central Bank’s monetary policy rate means cost of borrowing is expected to go up at least for the next two and half months.

Prior to the announcement of the Policy Rate, the Central Bank has indicated its intention to tame inflation in order to bring interest rates down and consequently lending rate.

The Governor said the rising inflation is a surprise to his team, but will take a major decision to address the issue.

“It’s an issue which in a sense is baffling to all of us. A year ago, inflation in Ghana was near single digit, particularly we were at 7.5% and then we find ourselves a year later in high double digits. It’s a very complicated environment, as you yourself you are aware we have come out of COVID-19. But Ghana fortunately was able to weather the impact of COVD well without recording high interest rates.”



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