Availability of hard currency in Ghana and Vietnam

Easy access to hard currency is essential to facilitate foreign trade and is useful in certain other circumstances for both the local population and expatriates; however, in both Ghana and Vietnam, this facility was not available for several decades. In Ghana in the 1970s, foreign exchange was available only to those with an import license, and the issuance of these few documents was restricted to friends of the issuer and those willing to pay a substantial premium. This situation continued until the IMF intervention in 1983, when the cedi was floated, and over the next decade or so, a global level of convertibility was achieved. Similar gains were made in Vietnam, beginning in 1985, but the process is still ongoing and not all of the gains have been sustained.

In the 1970s, exchanging Ghana cedis for any other currency without an import license was legally impossible. The black market flourished, and by 1982 the dollar to cedi exchange rate had reached 120, while the official exchange rate had been unchanged since 1978 at 2.8 cedis to the dollar. Thus, the few that obtained an import license saw the value of their investment multiply almost 43 times. There was no way that hard currency in Ghana could be withdrawn from a foreign bank account, so cash could only be brought in from abroad or bought on the black market. Hard currencies: dollars or sterling, could be exchanged for cedis at the official exchange rate but doing so implied a very substantial loss.

In 1983, with the floating of the cedi, a slow normalization process began. In the early 1990s, it became possible to open foreign exchange accounts at local banks, designated in dollars or pounds. At about the same time, the first ATMs appeared in major cities and it became possible to withdraw local currency from local or foreign bank accounts. In 1997, a similar installation was found in ATMs in Vietnam, and in addition, it was possible to withdraw US dollars in cash from overseas accounts up to a maximum of $400 per day. By 2014, however, this facility had been raffled off.

People with cedi bank accounts in Ghana can make overseas transfers to foreign currency accounts for any purpose – business or personal. Holders of dong bank accounts in Vietnam do not enjoy this facility, although special arrangements can be made for medical or educational purposes. These accounts may also receive transfers from foreign bank accounts. Importation is controlled by something similar to the old system of import licenses in Ghana, although the amount of foreign exchange available is much higher and the licenses are more abundant. Ghana now has a financial system tailored to the needs of the global free market goal for Vietnam, achieving this goal is still a work in progress.