The Bank of Ghana (BoG) has advised exporters within the country to be proactive when it comes to the acquisition of Letters of Commitment (LOC) so that bottlenecks are not encountered during exportation process.
The Letter of Commitment is a web-based export document that facilitates the repatriation of export proceeds to Ghana.
According to the Central Bank, exporters should not wait till goods are at the ports ready for shipment before they begin processes to acquire the letter of commitment or seek resolution to challenges associated with the acquisition of the LOC.
The Deputy Director in charge of Foreign Banking Operations at the Bank of Ghana, Eric Kweku Hammond, was speaking on the Eye on Port program.
He said exporters wishing to apply for extensions beyond the 60-day allowable period, should do so well ahead of time.
“If you foresee that you are unable to repatriate the export proceeds for your initial export within the 60-day period, there is a query system in the LOC regime that allows you to apply for an extended period and Bank of Ghana will gladly extend the period for you to enable you repatriate the proceeds.”
“Assuming that you ask your clearing or forwarding agent to export for you without monitoring your non-conformity status, if you are unlucky and your goods get to the port after Friday, 5pm, you will have to wait till Monday for us to attend to you.”
Mr. Hammond said applications for extensions are turned around within an hour.
The Bank of Ghana official said not only has the digitization of the LOC system made it convenient for exporters but also made it near impossible to circumvent.
He stated that the Integrated Customs Management System (ICUMS) which hosts the LOC system is able to block subsequent export transactions after noncompliance to the LOC regime.
The Deputy Director in charge of Foreign Banking Operations at the Bank of Ghana also disclosed that defaulters of the law that supports the LOC, can be subjected to fines or a jail term of up to 10 years.
He reiterated the importance of the letter of commitment which has been in use since 2016. According to Mr. Hammond, the regime allows the country to obtain the needed foreign exchange to pay for its huge import bills, shore up the national reserve, strengthen the cedi, contribute to national development and ensure consistency in export data.