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Speaking at a GT Bank-sponsored stakeholders’ session for importers and exporters recently, Mr. Hammond advised exporters to ensure that all export transactions are conducted using the LOC on the GCNet eMDA system, which is a paperless platform, to facilitate the easy and immediate reconciliation of transactions in the event of any challenges associated with proceeds transfer, and also ensure that updates on the LOC with funds received are duly tracked.
The BoG senior official explained that the system was put in place to increase foreign exchange availability to the forex market, and facilitate the stability of the GHS (cedi) in relation to the major trading currencies.
The Bank of Ghana had observed that some exporters had been reluctant to repatriate export proceeds, adding that those who fail to repatriate their proceeds, after the 60 days allowed by BoG, will be blocked by the system.
For exporters who are blocked and require to be unblocked, they will be expected to repatriate the funds or produce evidence of the expected time of receipt of the proceeds.
This has significantly boosted the drive to address an annual estimated loss of $3 billion, which makes up a third of the country’s value from exports proceeds through the violation of the foreign account regulations.
The introduction of GCNet’s LOC by the Bank of Ghana has aided in the elimination of human elements and interference in export monitoring, as well as ensuring the tracking of exports proceeds into the country, and also boosting the availability of forex in the economy.
Mr. Hammond further reminded participants that, as part of the process of ensuring proper repatriation of export proceeds, exporters were required to include the LOC reference number on the SWIFT advice, as part of the shipment document to the importer.
Acting TradeNet Manager of GCNet, Mr. Eben Engmann, explained the deployment of the LOC had facilitated the tracking of utilised and unutilised export LOCs in real time, tracking of LOC remittance, processing of remittance reports in real time, as well as ensuring the assignment of retention/repatriation percentages to exporters electronically.
He further intimated that the LOC had made it easy to segregate commodities in different groups for ease of reporting, and allows the Bank of Ghana flexibility to monitor receiving banks and advice on remittance registration to track proceeds.
He also urged exporters who had difficulty, to quickly notify the bank nominated on the LOC, showing evidence of SWIFT advice, indicating that monies had been received in respect of that LOC, so the matching could be done and reconciliation executed.
The Letter of Commitment (LOC) is a module on the eMDA portal, developed and deployed by GCNet for the Bank of Ghana at no cost.
All exports-related activities are captured to ensure effective monitoring of export and repatriation of export proceeds. This has resulted in cost reductions, through minimised clerical efforts, time taken to process export documents, and elimination of delays, as well as reduction in face-to-face meetings while deepening greater transparency.