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A former Deputy Minister of Finance and Member of Parliament for Cape Coast South, George Kweku Ricketts-Hagan has predicted further doom in respect of the depreciating cedi compared to some major foreign currencies such as the dollar.

He said if the managers of the economy do not institute the appropriate measures to curb the trend, the Cedi could end the year at GHC25.00 to $1.00.

Cedi depreciation
Mr George Kweku Ricketts-Hagan

Mr Ricketts-Hagan made this prediction while contributing to discussions on the implications of the cedi deprecation for cost of doing business in Ghana on TV3’s Key Points, May 18, 2024.

“The situation now with the currency, it’s likely to get worse. I have a feeling that this government is trying to prevent that, and this is what they are doing- You know, this is all happening at a time when we are not paying our external debt, we are negotiating that external debt and there is a deliberate attempt by this government not to complete that.

Because, if we do complete that, we will have to start paying and once we start paying the dollar situation will get worse. So, if we are able to complete this transaction, it will not be good for Ghana…and they will have to.

The negotiation on the table is a bad one. They are trying to get a relief of about $10b and that is what they are focusing on. That is about a third of our debt.

The problem of our currency now and of economy, is not about how much hair cut you get, but it is actually about how much space you get within the next three to five years. So, the proper solution is to renegotiate our debt by refinancing the whole international bond market and get a fresh start. A fresh loan that will give us a clean slate and structure a bond that will give us a three-year zero-coupon bond and start some amortisation that will be going up.

What they have on the table, they have taken their barber shop there, going to do their usual hair cut which these guys are not buying. Because these are seasoned negotiators. So, what they want to do is push this, hoping that NDC government will come to power, and they will push this on the lap of the NDC. Because when we come, we will have no choice but to negotiate that external debt. We will have to start paying one day.

If it happens like that, maybe we will be able to have the trust to start a better negotiation than what is on the table. Because the IMF is pushing us to do this negotiation without the IMF itself not understanding what is happening in the international capital market.

IMF is good at helping you negotiate a multilateral and bilateral kind of a transaction. This is new. We’ve never done it before. So if we go with what IMF is telling us- negotiate and try and get some percentage cut off, that’s not what we need. We need a is fiscal space to be able to build our economy.

Unfortunately, the news is not good. The long-term solution is industrialisation, which has failed. This government is over. The medium to short term, which is to do with inflows coming in, the inflows are not coming. That is why $150m they had to call us from our houses to approve it, otherwise there is going to be a problem. So, the cedi is going to end up about 18 by the end of the year. And if the negotiation happens, the cedi could end up at about 20, 25,” Mr Ricketts-Hagan explained.

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