Banks Begin 5% Deduction on Dollar Withdrawals

Commercial banks in Ghana have begun enforcing a new directive from the Bank of Ghana (BoG) that places a 5% charge on foreign exchange withdrawals.

The levy applies specifically to foreign currency accounts funded through transfers or cheque deposits. Accounts credited with physical cash deposits, however, remain exempt from this charge.

The move is part of the BoG’s broader effort to tighten oversight of foreign exchange (FX) transactions, discourage speculative withdrawals, and promote greater reliance on cash-based deposits.

While the Central Bank defends the policy as necessary to ensure financial integrity and strengthen Ghana’s forex management regime, the directive is already sparking concern among importers, exporters, and individuals who depend heavily on foreign transfers and remittances.

The 5% charge will most severely affect groups that routinely withdraw funds from foreign currency accounts not backed by physical cash deposits. This includes:

Importers and Exporters: Businesses that depend on frequent FX withdrawals to settle international trade obligations will now see their transaction costs rise significantly. The levy adds to already high operating expenses amid volatile exchange rates.

Remittance Recipients: Individuals receiving transfers from abroad and withdrawing in foreign currency stand to lose part of their funds to the 5% fee. This is a major concern for households reliant on remittances for daily upkeep, school fees, or healthcare expenses.

Travellers: Ghanaians preparing for overseas trips who prefer to carry foreign exchange in cash will also be hit with higher withdrawal costs, forcing many to reconsider their travel budgets.

Mandatory Withdrawals

Beyond the fee, the BoG’s revised guidelines impose new reporting requirements on banks. For every withdrawal not backed by a physical cash deposit, banks must now submit a detailed utilisation report to the central bank. This report must specify the purpose of the withdrawal and how the funds are used.

In addition, commercial banks seeking to import foreign currency cash are required to declare the intended use of such funds when making requests to the BoG. After importation, a post-utilisation report must also be filed, ensuring transparency in how foreign cash circulates within the economy.

These measures are intended to curb money laundering, illicit financial flows, and speculative activities in the forex market. They also align with Ghana’s commitment to global standards on financial integrity and anti-money laundering frameworks.

Revised Thresholds

The policy shift ties into stricter thresholds for foreign currency holdings by travellers. Under the new regime:

Inbound travellers cannot carry more than $10,000 in foreign currency.

Outbound travellers are limited to a maximum of $50,000 in foreign currency.

To avoid falling foul of these thresholds, the Importers and Exporters Association of Ghana has advised its members to adopt alternatives such as Visa and credit cards when travelling. This, according to the association, will reduce risks while ensuring compliance with BoG’s stringent directives.

Reactions and Concerns

The implementation of the 5% forex withdrawal levy has been met with mixed reactions. Many in the business community argue that the directive, while well-intentioned, adds an unnecessary burden at a time when operating costs are already high due to inflation and exchange rate instability.

For importers, who already struggle with volatile shipping costs and fluctuating currency values, the levy further erodes profit margins. Exporters, on the other hand, fear the measure could weaken their competitiveness in global markets if additional banking costs are passed on to customers.

On the flip side, financial regulators argue that the policy will help stabilise the country’s forex regime, improve transparency, and curb illicit financial activities. They maintain that such reforms are critical to restoring confidence in Ghana’s financial system and ensuring compliance with international financial standards.

The success of BoG’s new measures will depend largely on how well banks and their clients adjust to the requirements. While the 5% charge is likely to discourage speculative withdrawals, it may also push more people to find alternative, and potentially unregulated, means of accessing forex.