Deputy Minister for Finance, Dr. Stephen Amoah, attributes the depreciation of the cedi to the ritual problem stemming from the import-driven economy.
Addressing the media on Wednesday, he emphasized that the demand for the dollar due to importation exacerbates the depreciation of the cedi, necessitating national attention beyond the capacity of any single government.
He assured that if elected, Vice President Dr. Mahamudu Bawumia would implement a long-term framework to tackle the cedi’s depreciation.
“Cedi depreciation is a ritual problem, I agree with you. It’s not because of one particular government…It’s an issue that has nationalistic or that needs nationalistic attention,” Dr Amoah said.
The Deputy Finance Minister added “so far as we keep on being an importer-driven economy, we’ll be having problems with the cedi because we import almost everything. But Inshallah, Alhaji Dr. Mahamudu Bawumia, next year if he comes, we’re going to design a long-term framework to deal with the cedi.”
Over the past month, the Ghanaian cedi has experienced further weakening against the US dollar and other major foreign currencies.
While many attribute this to importation, Joe Jackson, the Director of Operations at Dalex Finance, holds a different view. He argues that Ghana’s exports have surpassed its imports in recent years.
During an appearance on JoyNews’ PM Express on Thursday, Jackson explained that curbing the depreciation of the Ghanaian cedi hinges on the country’s ownership of its exports.
Despite Ghana’s favorable export-import balance, Jackson contends that the cedi’s depreciation persists due to foreign ownership of exports. He notes that while Ghana exports goods, the profits are often repatriated by foreign entities, depriving the country of the financial benefits.
Citing statistics from other nations, Jackson underscored the contrast in how export earnings are retained within Ghana compared to countries like Botswana and Nigeria.
“Botswana, when they export oil, 51.8% come back into the country. In Nigeria, when they export oil, 51% of the money comes back to the country. Check out Ghana. I’m telling you that the problem is the ownership. In fact, for our non-oil, it’s as low as 6.5%. This is the problem.”
Mr. Jackson underscored the importance of Ghana keeping more of its export earnings within the country to stabilize the currency.
In a separate development, Finance Minister Dr. Mohammed Amin Adam, on May 24, provided assurance that the Ministry of Finance, in collaboration with the Bank of Ghana, is implementing strategies to combat the depreciation of the cedi.
These strategies involve expediting the fiscal consolidation process by streamlining expenditures and improving revenue generation. Additionally, they include intensifying the gold-for-oil program and implementing appropriate foreign exchange interventions by the Bank of Ghana, among other measures.
Furthermore, on Monday, May 27, the Bank of Ghana (BoG) responded to regulatory concerns by establishing a dedicated task force to oversee all foreign exchange bureaus and ensure compliance with regulatory standards.
The primary aim of this task force is to address the activities of illicit operators in the foreign exchange market and promote greater transparency in the market.