VIDEO: Cedi depreciation is a 'ritual problem' but Bawumia will solve it - Deputy Finance Minister
Ghana's Deputy Minister for Finance, Dr. Stephen Amoah, has attributed the depreciation of the Ghanaian cedi to the country's import-driven economy, calling it a "ritual problem" that requires national attention beyond the capacity of any single government.
Advertisement
Speaking to the media on Wednesday, Dr. Amoah highlighted that the persistent demand for foreign currency due to high import levels continues to exert pressure on the cedi. He emphasized that the issue of cedi depreciation is longstanding and not the fault of any particular administration.
“Cedi depreciation is a ritual problem, I agree with you. It's not because of one particular government. Unless one is suffering from unconscious incompetence or displaying intellectual dishonesty that will say cedi depreciation is NPP government. It's an issue that has nationalistic or that needs nationalistic attention,” Dr Amoah said.
Dr. Amoah assured that if elected, Vice President Dr. Mahamudu Bawumia plans to develop a long-term framework to address the depreciation of the cedi. "so far as we keep on being an importer-driven economy, we'll be having problems with the cedi because we import almost everything. But Inshallah, Alhaji Dr. Mahamudu Bawumia, next year if he comes, we're going to design a long-term framework to deal with the cedi," he added.
The cedi has been in a weakening cycle, depreciating 14 percent against the US dollar this year alone. It began the year trading at GH¢11.97 to a dollar on the interbank market and GH¢12.33 on the retail market. Currently, the cedi is being bought at GH¢13.90 and sold at GH¢13.91 at the interbank rate, with forex bureaux in Accra quoting prices as high as GH¢16.30 to the dollar.
This depreciation has had significant impacts on businesses, particularly in manufacturing and commerce, with many calling on the government and the Bank of Ghana (BoG) to act urgently. The Ghana Union Traders Association and the Chamber of Automobile Dealership Ghana have noted that the rising cost of goods and services, driven by the weakening cedi, is making it difficult for businesses to stay afloat.
In response, the government has announced several measures to stabilise the cedi. These include intensifying the Gold for Oil and Gold for Reserves programmes and fast-tracking fiscal consolidation processes. Additionally, the government expects to receive a combined $2.3 billion from development partners to support the local currency.
Finance Minister Dr. Mohammed Amin Adam recently stated that despite recent pressures, the cedi had shown signs of stability, with depreciation rates improving significantly over the past year. He noted that the cedi's depreciation against the US dollar had halved from 54.2 percent at the end of November 2022 to 27.8 percent at the end of December 2023. As of May 20, 2024, the cumulative depreciation stood at 14.2 percent, compared to 20.7 percent during the same period in 2023.
Watch Dr. Amoah's interview below;
Cedi depreciation: Issue is a ritual problem; Bawumia will design a long-term framework to deal with it. - Deputy Finance Minister #ElectionHQ pic.twitter.com/XrzETrpi2u
— JoyNews (@JoyNewsOnTV) May 29, 2024