How Ghanaian importers can pay Chinese suppliers in cedis without using US dollars

• Ghanaian importers can pay Chinese suppliers using Ghana cedis through Stanbic Bank’s pilot service.

• The payment is made in Chinese yuan, reducing the need to obtain US dollars first.

• GCB is also preparing a similar service to support Ghana-China trade.

The service allows customers to pay in Ghana cedis while the payment is made to the supplier in Chinese yuan.

Governor of the Bank of Ghana (BoG), Dr Johnson Pandit Asiama, disclosed the development at the 132nd Monetary Policy Committee press briefing.

He said the initiative is part of efforts to support trade between Ghana and China and provide businesses with an alternative to dollar-based payments.

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“As a central bank, we're doing a number of things. You might have heard about one of the banks, what's the name, Stanbic. They are piloting a program whereby our exporters, our importers no longer have to carry US dollars on them to go and pay for their imports."

"They can actually pay in Ghana cedis right from here and so as we speak, if you want to buy anything from China, just go to Stanbic Bank with your cedis and you are able to do that and that is something we are piloting going forward.”

The process is designed to allow a Ghanaian importer to start the transaction in Ghana cedis.

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Instead of obtaining US dollars and using them to pay a supplier in China, the customer goes to Stanbic Bank with the cedis needed for the transaction.

The payment is then made to the Chinese supplier in Chinese yuan.

According to Stanbic Bank, its Cross-Border Interbank Payment System (CIPS), service is designed for businesses that need to make direct Chinese yuan payments from Ghana.

This means a business importing goods from China can pay its supplier directly in yuan, without having to go through multiple foreign exchange conversions.

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The service can also be used by businesses making regular payments to Chinese partners and vendors.

Stanbic Bank says businesses can use the service to:

• Pay Chinese suppliers for imported goods.

• Make direct payments in Chinese yuan.

• Make regular payments to Chinese partners and vendors.

• Manage China-related transactions faster and more efficiently.

• Reduce the need for multiple foreign exchange conversions.

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The service is not limited to businesses. Individuals can also use it to make payments in China.

They can pay for goods and services, make healthcare and medical payments, pay school fees and other education-related expenses, and send money to family members in China.

The Bank of Ghana says Stanbic Bank is not the only bank working on such a payment arrangement.

Dr Asiama said Ghana Commercial Bank (GCB) is also preparing a similar service.

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“We are aware that Ghana Commercial Bank is also starting something quite similar, and so we are taking those developments very, very seriously, in line with the growing trade relationship with China.”

The development comes as Ghana's trade relationship with China continues to expand.

For importers, the main change is that payments for goods bought from China can be initiated in Ghana cedis and settled in Chinese yuan, reducing the need to source US dollars specifically for those transactions.

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The Bank of Ghana is monitoring the development as banks introduce more payment options to support Ghana-China trade.