Minority Leader Cassiel Ato Forson has asked President Nana Addo Dankwa Akuf-Addo to direct his appointees to release foreign exchange earnings stashed in their homes to mitigate the continued fall of the Cedi against major trading currencies.
The Minority Caucus, in a statement presented by Cassiel Ato Forson, bemoaned the adverse impact of the Cedi’s depreciation on businesses in areas such as Okaishie, Abossey Okai, Kejetia, and other commercial districts.
“In spite of the huge inflows of foreign exchange from the IMF and the World Bank, into the Ghanaian economy, and I’m talking of billions of Ghana cedis, billions of US dollars, the government’s action and its management of the cedi have continued to fuel steep depreciation with no end in sight unfortunately.”
“So far, the decisions of the Economic Management Team, chaired by our Vice President Alhaji Bawumia leaves a lot to be desired. The reality of the Ghanaian economy today exposes the credentials of the so-called economic wizkid who was marketed as the savior of Ghana’s economy. Alhaji Bawumia’s credibility is now tatters.”
He added, “We call on the Akufo-Addo government, among others, to order their appointees to release the FX [forex] stashed in their homes, adhere to fiscal consolidation and curtail excessive spending and address the lingering issues in the cocoa sector.”
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Furthermore, Dr. Ato Forson said the strange policy on mixed cash reserve ratios recently implemented by the Bank of Ghana (BOG) and increased unbudgeted fiscal spending, which is fueling demand for foreign exchange, are among the factors causing the cedi to depreciate.
The fall of the cedi against the major trading currencies, especially the dollar, has resulted in increasing costs of doing business in Ghana, according to the President of the Ghana Union of Traders Association (GUTA), Dr. Joseph Obeng.
Dr. Obeng said that businesses are unable to service their debts with the banks because of the exchange rate issues.
“We’re unable to service debt at banks, the cost of doing business has gone up,” he said.
GUTA, in a statement on May 14, expressed “deep frustration over the current depreciation of the cedi, which is creating a big mess for the business community, especially, the trading sector. This seeming crisis coupled with the ever-rising freight charges from Asia are rendering the cost of doing business unbearable.”
Meanwhile, a lecturer at the Department of Finance at the University of Ghana Business School (UGBS) has attributed the depreciation of the cedi to “weak fundamentals.”
Dr. Benjamin Amoah said, “The fundamentals are definitely weak. We should not play jokes about it. The truth is that the fundamentals are very weak. What is the fundamental here? What is the inflation rate as we speak now and what is has been the inflation rate over time, very high. What is interest rate, that is the fundamental factor, it is very high.”
“What is unemployment rate now? Unemployment rate is very high. What is our balance of payment position, it is very high and these are the very fundamentals that is used in accessing the exchange rate.”
According to him, the government addressing just one of the indicators does not resolve the depreciation of the cedi, stating that “it requires effective management of each of these factors.”
