The Chief Executive Officer (CEO) of the Private Enterprise Federation (PEF) Nana Osei Bonsu, has said the Ghanaian cedi is not depreciating as some critics of government have suggested, but rather, it is the U.S. dollar that is gaining strength.
“When the American dollar increases in value it affects everybody else; it’s not that your currency is deteriorating, it’s because that one [dollar] became stronger, and if you compare the dollar to other currencies, we should take comfort that we are not alone.
“It’s the dollar getting stronger, it’s not the cedi deteriorating, so, the two scenarios are different and have different interpretation,” Nana Osei Bonsu told Moro Awudu on the Executive Breakfast Show (EBS) on Class91.3FM on Tuesday, 11 September 2018.
His comments dovetail into assertions by Dr Gideon Boako, who speaks for Vice-President Dr Mahamudu Bawumia on economic issues, that Ghanaians should not be ungrateful to the Akufo-Addo government as far as the weakening of the cedi is concerned, since, in his view, the current government has done a lot to reduce the rate of fall of the local currency from 31% to 6% – a far better record, according to him, than the Mahama administration achieved.
The cedi is nearing the 5 to $1 mark, a situation that has set businesspeople on edge.
“What is important is that; whatever the depreciation was at the time is not the same as today”, Dr Boako told Accra-based Citi TV, adding: “That is why if someone has been able to reduce the rate of depreciation from a point of 31 per cent to 6 per cent, you do not just be ungrateful to that person and say he has not done well.”
It means, he said, “That given the chance that person has what it takes to take you to a point where you have zero depreciation and you can think of how to grow up; that is the most important.
“If you do not situate the argument within that context, you will just be comparing the nominal figures”, Dr. Boako argued.
In his view, “It is important to also note that insofar as we don’t run a fixed exchange rate regime, depreciation is something that will be difficult to say you won’t see it at all.
“You try as much as possible to contain it and make sure you appreciate, but given the structure of our economy right from Guggisberg’s time to Nkrumah to today, the structure of the economy is such that we are mostly net importers, and, so, the trade accounts issued will affect our local currency at all times.
“We also have huge exposure to foreign investors in the country – those who are doing retail businesses and the likes, so they repatriate money outside and all of these will have effect on us”, he explained.