North Tongu Member of Parliament Samuel Okudzeto Ablakwa has stated that the Cedi’s precipitous fall against the US dollar should be viewed as a national security threat.
He stated that the President must dissolve the Economic Management Team (EMT), fire the finance minister, and convene a nonpartisan forum immediately to save the local currency.
Mr Ablakwa stated in a tweet, “The total crash of the Cedi must be viewed as a major national security threat.” President Akufo-Addo should immediately halt his regional booing tours, fire his Finance Minister, disband his failed EMT, and convene a non-partisan emergency economic rescue forum to generate new ideas.”
Some analysts, however, believe that the Cedi will soon stabilize.
For example, Mr Joe Jackson, Chief Operations Officer at Dalex Finance, stated that people are finding it difficult to buy dollars these days and are therefore giving up.
Similarly, he expects the government to send market signals that it is cutting back on spending. He also mentioned debt restructuring as one of the measures. He predicted that if this occurs, the Cedi fall would slow.
On Wednesday, October 19, he said on the Ghana Tonight show on TV3 with Alfred Ocansey, “It is a difficult time, but I expect the rate to slow down.” The rate will slow because it is currently very difficult to find dollars to buy, and most people have given up on buying dollars and are slowing. I also expect the government to announce measures soon that will demonstrate to the market that it is serious about cutting spending.
“The most significant of the measures will be debt restructuring; when that occurs, I expect the rate of Cedi depreciation to slow.”
Elsie Addo Awadzi, the Bank of Ghana’s Second Deputy Governor, recently stated that the Cedi’s depreciation against the US dollar, as well as the high inflation rate (32.7%), are only temporary.
She expressed optimism about Ghana’s economic prospects.
She explained that recent global developments have increased economic and business uncertainties for businesses and individuals while speaking at the 21st Annual National RCB CEOs conference on the theme “Positioning Rural Banking at the Center of Financial Services Delivery in Ghana – the Role of Stakeholders.” These developments have not been kind to our domestic economy.
She stated that the Bank of Ghana is collaborating closely with the Ministry of Finance and other key stakeholders to negotiate a sound economic reform program backed by the IMF in order to stabilize and transform our economy.
“The Bank of Ghana is optimistic about the future of our economy.” The current high inflation and cedi depreciation are only temporary, and we must avoid speculative behavior that will only delay our ability to achieve stability,” Mrs Addo Awadzi stated.
Also read: Debt restructuring won’t impact 94% of Tier 2 pension investments
As of Wednesday, October 19, some forex bureaus are selling the local currency for between 12.50 and 12.95.
The BoG recently identified five key reasons for the local currency’s woes.
They were “the strength of the US dollar, investor reaction to a credit rating downgrade, non-rollover of maturing bonds, the sharp rise in crude oil prices and their impact on the Oil Bill, and the loss of external financing.”
The central bank went on to announce measures to address the situation.
The total crash of the Cedi must be seen as a major national security threat.
Prez Akufo-Addo should immediately suspend his regional booing tours, sack his Finance Minister, dissolve his failed EMT & convene a non-partisan emergency economic rescue forum to harvest fresh ideas.
— Sam Okudzeto Ablakwa (@S_OkudzetoAblak) October 20, 2022
They were the “Gold Purchase Program to increase foreign exchange reserves; Special Foreign Exchange Auction for the Bulk Distribution Company (BDCs) to help with the importation of petroleum products; Bank of Ghana is entering into a cooperation agreement with mining companies to provide BOG with the opportunity to buy gold as it becomes available.” Once disbursed, the recently approved USD750,000,000 Afrexim loan facility by Parliament will strengthen the country’s foreign exchange position and help restore confidence.”
The recently signed 1.13-billion-dollar Cocoa Syndicated loan was also a measure to support the Cedi, according to the BoG.
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