Ghana Community Network Services Limited (GCNet) has introduced a new product known as the Letter of Commitment (LOC) to the export community and also to the Central Bank to help with the reconciliation of export proceeds.
According to Mr. Carl Sackey, product development manager of GCNet, the new product has come to ease the burden of the central bank in trying to trace and reconcile the proceeds of exporters through a system which used to be done manually.
LOC is a fully automated system where exporters will have to declare to the Bank of Ghana, proceeds that will come out of the goods being exported on an electronic platform through their local bankers. Local Banks henceforth will automatically alert the Central Bank through the LOC system about proceeds that are expected to come from the goods being exported. On this platform the exporter cannot continue to export until the central bank confirms from the local commercial bank that the exporter has stated a valid account.
It is noteworthy that export laws in Ghana does not allow for exporters to send proceeds into a foreign account thus escaping the payment of certain revenues to the country’s revenue agents.
The export forms which was initially used was paper based and the Central Bank used to go through voluminous forms received every day to confirm the details an exporter has on the form. This process wasted time and didn’t give the Central Bank the accurate information needed ensure that proceeds were retained in the country.
Export procedures will be streamlined with the introduction of this new system and according to Mr. Sackey, the exporting community appreciates the automated system and this gives them more room to process their documents faster and more efficiently.
The LOC system is also linked with the system of the customs division of Ghana Revenue Authority (GRA), enabling them to verify and confirm that the exporter has not under declared his or her goods.
It must be noted the Bank of Ghana only needs a confirmation of the proceeds that hit the exporter’s accounts within a stipulated time by law and when that happens one can move his or her money to any other account around the world. Proceeds that come into the exporter’s local commercial bank is not in any way accessed by the Bank of Ghana.
The new system is being used by Exporters, The Central Bank, Commercial Banks and Customs. The system became operational from 1st July and has been active since. According to Mr. Sackey, the system will be reviewed next week in order to build more features that will make it user friendly and robust.
Exporters only need to log on to the GCNet system and apply for an LOC and fill the forms online and submit accordingly. Without the LOC exporters cannot do business.
