I'm not a member or sympathizer of any political entity in Ghana, but l must stress that the initial reaction from some folks in Ghana and elsewhere in reference to the Ghanaian President's speech two days ago has made me realize that our ingrained positions are clouding our judgements.
One does not need a PhD in economics or in finance to grasp the concept that falling consumer confidence and currency speculation can adversely affect any domestic currency. This is the reason why l concur with what the Ghanaian President said in his recent address to the nation.
Let me pose a simple question; do we honestly believe that a strong USD is beneficial to the global economy? You will be delusional if you provided an affirmative response because that's not the case. The US economy itself will not be able to sustain a strong dollar indefinitely whiles trying to bring it's rampant inflation under control. Her exports and manufacturing sector will eventually succumb to market forces. Like it or not, a recession is looming in the US, and as the saying goes " when the US sneezes, the whole world catches a cold"
My friends, let's be objective and face reality. Rather than holding on to our entrenched ideologies/ political affiliation, let's for once accept the fact that the global economy is in tatters. The geo-political upheaval in Europe, coupled with the massive impact of Covid 19 cannot be understated. Energy shortage , food rationing, and unprecedented inflation are now common features in Europe and in other OECD countries.
Now tell me, what do you think will happen if as envisaged, the FED eventually increases it's interest rate by another 75 basis points next week? For those who are clueless, , another hike in US interest rates will equate to a much "stronger dollar" which will mount additional pressure on currencies such the Ghanaian Cedi. That said, we must also realize that the FED's direct interventions are purely ARTIFICIAL. Hence, it will be compelled to reverse most of it's measures as soon as the US gets it's domestic inflation under control. This clearly means that it's not all doom and gloom as far as the Ghanaian Cedi or any other weaker currency is concerned.
Before anyone criticizes me for ignoring the fact that the dynamics of the Ghanaian economy must change if we are to avoid future currency shocks , please note that l intentionally avoided this discussion because it would expand the conversation far beyond the realms of what l wish to articulate.
These are indeed challenging times, for the obstacles are endless. However, as the late US President John F Kennedy once commented , " ask not what your country can do for you--, ask what you can do for your country"
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