By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Starr FmStarr FmStarr Fm
  • Home
  • Election Hub
  • General
    GeneralShow More
    Ablekuma North rerun: Hawa Koomson has met her meter – Victoria Cudjoe reacts to assault
    July 11, 2025
    ECG launches nationwide ‘All Must Pay’ campaign to recover customer arrears
    July 11, 2025
    Ablekuma North rerun: Bawumia calls out police over attacks on NPP members
    July 11, 2025
    Violence at Ablekuma North rerun as Hawa Koomson, NPP candidate assaulted
    July 11, 2025
    Ablekuma North rerun: Accra Mayor condemns police ‘arrogant’ attack on EIB Journalist
    July 11, 2025
  • Business
    BusinessShow More
    Mayekoo doubles donations to African causes with new matching fund campaign 
    July 10, 2025
    Government inaugurates new NIB board, announces plan to recapitalise bank
    July 9, 2025
    Ghana’s gold now powers cedi stability – President Mahama
    July 8, 2025
    VRA sets the benchmark in African public procurement
    July 8, 2025
    IMF Executive Board approves $370 million disbursement for Ghana
    July 7, 2025
  • Politics
    PoliticsShow More
    Ablekuma North rerun: Hawa Koomson has met her meter – Victoria Cudjoe reacts to assault
    July 11, 2025
    NDC not behind Ablekuma North violence – Tanko-Computer disputes claims
    July 11, 2025
    ‘This isn’t the democracy we want’ – Bawumia over attacks in Ablekuma North
    July 11, 2025
    Ablekuma North Rerun Violence: NPP won’t forget if perpetrators go unpunished – Bawumia
    July 11, 2025
    Ablekuma North rerun: Bawumia calls out police over attacks on NPP members
    July 11, 2025
  • Entertainment
    EntertainmentShow More
    Sim Majorley: Korea, Ghana to share cultures through stage production
    July 11, 2025
    I took a pause to gather strength- Kwesi Slay
    July 8, 2025
    Kinaata questions TGMA credibility over ‘Record of the Year’ snub
    July 7, 2025
    Ghana grows movie premiere ignites new thinking among youth in Ashaiman
    July 7, 2025
    “I will feature Sarkodie at the right time” – Kofi Kinaata
    July 6, 2025
  • Sports
    SportsShow More
    Tottenham secure Mohammed Kudus in high-profile transfer deal
    July 10, 2025
    Ghana, Nigeria share spoils in thrilling opener of 2025 WAFU U20 Boys Cup
    July 10, 2025
    Otumfuo rallies mining sector to support revamp of Ashanti sports facilities
    July 10, 2025
    Liverpool’s Ambitious Summer: Chairman Predicts Big Moves as Champions Build a Stronger Squad
    July 10, 2025
    Kofi Adams undertakes inspection of Baba Yara Stadium
    July 9, 2025
  • Technology
    TechnologyShow More
    Samsung Galaxy Z Flip7: A pocket-sized AI powerhouse with a new edge-to-edge flexwindow
    July 10, 2025
    Real Quantum Dot Technology in Samsung QLED TVs
    June 29, 2025
    GCAA and South Korea sign deal to advance Ghana’s Drone sector
    June 25, 2025
    Onafriq, PAPSS partner to launch cross-border payment services in Ghana 
    June 20, 2025
    Yellow Card, Visa partner to accelerate stablecoin adoption across emerging economies
    June 19, 2025
  • International
    InternationalShow More
    47th AU Forum: Ablakwa criticizes $1.2m AfCFTA allocation as ‘highly insufficient’
    July 10, 2025
    Minority demands audit over $1.2m passport relaunch cost and delays
    July 9, 2025
    Minority demands compensation for citizens stranded by US embassy closure
    July 9, 2025
    Foreign Minister Okudzeto Ablakwa and Chinese Ambassador Tong Defa sign $30 million grant agreement for Aflao market
    Ghana secures $30 million Chinese grant for Aflao market project
    July 9, 2025
    The end of USAID is not catastrophic for Africa – Dr. Brian Reuben
    July 8, 2025
  • Factometer
Search
© 2024 EIB Network Ltd. All Rights Reserved.
Reading: Cedi begins losing streak – GN Research
Share
Notification Show More
Font ResizerAa
Starr FmStarr Fm
Font ResizerAa
  • Headlines
  • Election Hub
  • General
  • Politics
  • Sports
  • Business
  • Entertainment
  • Factometer
Search
  • Headlines
  • Election Hub
  • General
  • Politics
  • Sports
  • Business
  • Entertainment
  • Factometer
Have an existing account? Sign In
Follow US
© 2024 EIB Network Ltd. All Rights Reserved.
Business

Cedi begins losing streak – GN Research

Starrfm.com.gh By Starrfm.com.gh Published March 10, 2017
Share
A woman holds 03 July 2007 in Accra a wad new currency, the new cedi, that Ghana put in circulation that day, although the old money will still be valid until the end of the year. Currently, the cedi is one of the least valued currencies in Africa: 9000 cedis equal one US dollar. Ernest Addison, head of research at the Bank of Ghana, assured in November 2006 that the changeover was not a revaluation nor devaluation, and will not affect foreign exchange. AFP PHOTO / ISSOUF SANOGO (Photo credit should read ISSOUF SANOGO/AFP/Getty Images)
SHARE

Ghana’s currency, the Cedi is likely to record high levels of depreciation during the year if the government does not clearly come out with a policy to manage the situation. In January the Cedi depreciated on average against the dollar 0.08% and 0.24% in February.

During the first weeks in March 2017, the cedi has recorded a significant year to date depreciation of 7.36% against the dollar and 7.31% against the Euro. This makes the Ghana Cedi the worst performing currency on the African continent for the period under review- 2017.

GN Research analysis relates the situation to the low supply and the high demand for these currencies. There seems to be some growth in business confidence within the business community that is driving high level of imports after the sector slowed in 2016. The market seems to be reactivated pushing high demand for the greenback, urging speculators within the foreign exchange market to reignite their business.

The challenge for Government

The 2017 budget statement either reduced or abolished some twelve taxes in order to boost economic growth, giving the private sector lead role. These tax reforms include abolishing the 1 percent Special Import Levy; the 17.5 percent VAT/NHIL on selected imported medicines and the duty on the importation of spare parts. Even though the tax cuts generally came as good news, especially to the business community, it has the potential of enforcing the rate of depreciation of the Cedi.

The execution of these measures can lead to a reduction in the domestic prices of imported items resulting in high demand. Such opportunities offered to importers might lead to abuse and exploitation, as their desire to enlarge their jobs to meet the rising need for the goods can increase the need for the major trading currencies.

If nothing is done to improve the supply of foreign exchange, the cedi will depreciate further providing a lot of uncertainties for the business community. Unfortunately, the 2017 budget did not provide any specific policy aimed at stabilising the cedi. This is astonishing; because the Ghanaian economy is a known import dependent one and an unstable currency can erode all the gains that would have been made in a given period. Therefore the budget should have outlined policies which will help ensure the stability of the cedi.

In this regard, government must institute measures to diversify the country’s exports and reduce imports especially agricultural produce since our agricultural sector has the potential of producing them locally.

Also, government policies should attract foreign direct investment (FDI) inflows to increase the supply of foreign exchange. In addition, there must be a deliberate effort aimed at reducing foreign currency expenditure in the economy. Government should immediately deal with the ills of dollarization in the country to save the currency within its first year in office.

Government should begin immediately working towards providing a long term solution to this problem. In this regard, GN Research strongly recommends that the central bank continues the zero financing of government budget even after the expiration of the IMF program to help reduce liquidity, inflation, interest rate and stabilise the cedi.

Signed

Samuel Kofi Ampah – Groupe Nduom Research

You Might Also Like

Mayekoo doubles donations to African causes with new matching fund campaign 

Government inaugurates new NIB board, announces plan to recapitalise bank

Ghana’s gold now powers cedi stability – President Mahama

VRA sets the benchmark in African public procurement

IMF Executive Board approves $370 million disbursement for Ghana

TAGGED:budgetdollarghana cedi
Share This Article
Facebook Twitter Email Print
Share
Previous Article Nigeria leader Buhari returns home after UK medical leave
Next Article Baah ruled out of 2017 MLS season

Starr 103.5FM

Starr FmStarr Fm
Follow US
© 2024 EIB Network Ltd. All Rights Reserved.
newsletter icon
Join Us!

Subscribe to our newsletter and never miss our latest in news, podcasts etc..

[mc4wp_form]
Zero spam, Unsubscribe at any time.
adbanner
AdBlock Detected
Our site is an advertising supported site. Please whitelist to support our site.
Okay, I'll Whitelist
Welcome Back!

Sign in to your account

Lost your password?