The importation of used cars into Ghana faces a significant financial obstacle because of the government’s policy requiring import duties to be paid in US dollars.

The President of the Automobile Dealers Union, Eric Boateng, said the effect of this policy is having a negative impact on the car importation industry.

Speaking on Citi News, Mr. Boateng said although the prices of some cars remain stable in the global market, paying duties in dollars is affecting the business in Ghana.

“We are paying COVID-19 transfer levy, network charges, and a lot of import duties we are paying currently. Our currency is in cedis but if you import the car from maybe Canada, Korea or Dubai, the government of Ghana will convert the duties into dollars for you to pay.

So, if you buy a car from the USA for about $1000 and you bring it to the port, you will end up paying five times that in dollars,” he stated. 

Meanwhile, the practice of charging import duties in dollars contradicts the provisions of the Foreign Exchange Act of the Bank of Ghana, Act 2006 (Act 723), which prohibits unauthorised dealings in foreign currency by the public.

Currently, a dollar is selling at GH¢14.90 on the forex market, which is significantly up from the GH¢10.97 it was sold for the same period in May 2023.

Bloomberg reports that the Cedi’s depreciation is being exacerbated by a decline in cocoa earnings as exports fell by about $500 million in January and February 2024 due to poor weather conditions and the swollen shoot disease.

The Bloomberg report added that the current depreciation depicts the Cedi’s record-breaking weakening cycle that has left analysts to forecast worse times for the currency over elevated risks of election-year funding and stalled debt deals.

Fitch, however, forecasts that the Cedi will end 2024 at GH¢12.25 to a dollar.

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