Economist Professor Godfred Bokpin has expressed scepticism about the Ghana Gold Coin as a remedy for the cedi’s depreciation.
On Friday, the Bank of Ghana (BoG) introduced the Ghana Gold Coin, a new investment product aimed at curbing dollar hoarding. The initiative is part of the domestic gold programme, designed to soak up excess cash in circulation and bolster the cedi’s strength against major currencies.
The coin will come in three versions: one-ounce, half-ounce, and quarter-ounce, and will be sold through commercial banks within two weeks. BoG Governor Dr. Ernest Addison, speaking at the Monetary Policy Committee meeting on September 27, noted that coin prices will be made available on the central bank’s website.
While the initiative is expected to reduce market liquidity and stabilize the cedi, Professor Bokpin argues that it falls short of offering a long-term solution to the currency’s persistent decline.
But Prof Bokpin in an interview on Eyewitness News on Citi FM on Friday, indicated that “I associate with the intervention from the central bank to the extent that there are very limited alternative avenues right now in the market and therefore any genuine attempt to offer alternatives would be welcomed, and the next important question as you rightly asked is whether this is the solution.
“We have been waiting for this all this while, and I think it is not too hard to look for that and to conclude that that is not the solution.”
“The reason is as much as we acknowledge that this is an alternative, the market is dry largely also because of confidence and all of that. This is not the solution.”
Prof Bokpin stressed that the introduction of the coin was not a substitute for managing the economy well.
“I want to believe that it is not packaged as a substitute for managing the economy well because the fundamental thriving factors pushing the cedi to lose its own against the major trading currencies when it comes to fiscal discipline when it comes to enhancing the capacity of the local economy, less import reliance, adding value to the export of your raw commodities, this doesn’t substitute for all of that,” he added.