Professor of Finance at the University of Ghana Business School (UGBS), Professor Godfred A. Bokpin says the accumulation of policy failures by successive governments should be blamed for the consistent depreciation of the Ghanaian cedi.
Speaking on the Morning Starr with Francis Abban on Monday, Professor Bokpin stated that the injection of International Monetary Fund (IMF) cash cannot solve the challenges of the cedi.
He therefore advised the government to check the fundamentals in order to manage the fast depreciation of the cedi.
“It’s the accumulation of policy failures and lack of vision that cluster at some point, so it’s not like the cedi misbehave on its own. It is the reflection of the fundamentals and the fundamentals doesn’t deteriorate in a week. It is the accumulation of policy failures over time, inaction wrong action over time that manifest in the deteriorating of the fundamentals.
“When it happens this way it is very difficult to correct it in a week and you don’t solve that problem with the occasion injection of flows by the IMF supporter programs,” Professor Bokpin stated.
Background
The Minister of Finance, Dr. Mohammed Amin Adam has blamed the rapid depreciation of the Ghanaian cedi on payment to contractors and high cedi liquidity among others.
Several financial analysts have projected that the Ghanaian will hit between GHc16 to GHc18 to the dollar.
Addressing the media at his monthly briefing on the economy, the sector minister also explained how the cedi has performed in the past and how it has stabilized against other currencies.
“But for recent pressures, we are seeing on exchange rate movements, the exchange rate has been largely stabilized with the depreciation of the cedi against the US Dollar halving from 54.2% at the end of Nov 2022 to 27.8% at the end of December 2023.
“The Cedi’s stability has continued into 2024, with a cumulative depreciation of 14.2% as of 20th May 2024, compared to 20.7% recorded in the same period in 2023,” Mr. Amin Adam stated.
Source: Ghana/Starrfm.com.gh/103.5FM
