The Bank of Ghana (BoG) has issued fresh guidelines on the use of Letters of Commitment (LOCs) in cross-border trade, a move aimed at tightening foreign exchange compliance while easing bottlenecks for informal traders operating across Ghana’s borders.
In a public notice dated December 22, 2025, the central bank clarified who qualifies to generate an LOC under the Integrated Customs Management System (ICUMS) and, critically, who does not to address the growing confusion among exporters, freight forwarders and customs officers.
Who must generate an LOC
According to the BoG, the LOC is strictly an export document for formal merchandise exports and applies only to exporters who meet all of the following conditions:
Receive export proceeds in foreign exchange
Are residents in Ghana
Are registered and licensed by relevant state agencies
Hold a valid Tax Identification Number (TIN) to access ICUMS
Entities that fall outside these criteria, the BoG stressed, are not eligible to generate an LOC.
The clarification reinforces the central bank’s broader objective of ensuring that export-related foreign exchange inflows are properly tracked and repatriated through the formal banking system.
Relief for informal cross-border traders
In a significant concession to small-scale commerce, the BoG exempted informal cross-border traders from LOC requirements where transactions involve buyers from neighbouring countries who:
Are not registered on ICUMS, and
Do not rely on formal invoicing systems.
For such transactions, the LOC “should not be included as part of the required documentation,” effectively removing a compliance hurdle that traders have long complained was ill-suited to the realities of informal regional trade.
Analysts say the exemption could help sustain livelihoods in border communities while reducing friction in West African trade corridors.
Warning to freight forwarders
The central bank also issued a firm warning to freight forwarders and customs house agents, instructing them not to use their own TINs to generate LOCs on behalf of traders who do not qualify.
This practice, the BoG cautioned, undermines the integrity of the export documentation process and exposes service providers to regulatory sanctions.
Freight forwarders have been advised to urgently review their internal processes to ensure compliance.
In a parallel directive, officers of the Customs Division of the Ghana Revenue Authority (GRA) have been instructed not to compel cross-border buyers from neighbouring countries to generate LOCs.
The BoG said compliance checks should focus on formal exports, while ensuring that legitimate informal cross-border trade is facilitated rather than constrained – an acknowledgement of the economic importance of informal trade flows in the sub-region.
The new guidelines reflect a calibrated policy approach: tightening oversight where foreign exchange earnings are involved, while avoiding over-regulation of informal trade that could push transactions further underground.
Well, as the country continues to rebuild external buffers and strengthen forex management under its broader macroeconomic reform programme, effective enforcement of export documentation without disrupting legitimate trade remains crucial.
For businesses and trade intermediaries, the BoG’s notice provides long-awaited clarity. The challenge now lies in consistent implementation on the ground.
Source:Lovinghananews.com
