TIG Post

Tag: Dr John Kwabena Kwakye

  • Dollarising Ghana’s economy to will tackle Cedi depreciation – Dr Kwakye

    Dollarising Ghana’s economy to will tackle Cedi depreciation – Dr Kwakye

    Director of Research at the Institute of Economic Affairs (IEA), Dr. John Kwabena Kwakye, has proposed adopting the dollar as Ghana’s currency to stabilize the economy.

    “Stabilising the economy is not rocket science. If we feel we cannot maintain the Cedi, let us abandon it and adopt the dollar. Let us dollarise the economy,” he said.

    “Dollarisation” is when a country begins to recognize the U.S. dollar as a medium of exchange or legal tender alongside or in place of its domestic currency.

    Dr. Kwakye suggested that dollarization should be a temporary measure until the economy rebounds, after which Ghana can reintroduce its currency.

    Dollarization occurs when a country recognizes the U.S. dollar as legal tender alongside or instead of its domestic currency due to instability.

    Advantages include lower administrative costs and a sounder financial sector, while disadvantages include loss of monetary autonomy and vulnerability to foreign influence.

    He also proposed converting the central bank into a currency board, where the local currency is pegged to a foreign reserve currency, allowing for a fixed exchange rate.

    Dr. Kwakye criticized the government for failing to implement alternative strategies, opting instead to collateralize assets for loans under the IMF program, limiting policy flexibility.

    He expressed concern over recent exits of foreign companies from Ghana, such as Glovo and reports about Société Générale (SG) Ghana, citing the loss of competitiveness and its adverse impact on the economy.

    In response, Mr. Yaw Sampah, a private legal practitioner and finance analyst, disagreed with Dr. Kwakye’s proposal to dollarize the economy.

    He advocated for policies to diminish the dollar’s significance in Ghana, aiming to reduce speculative demand and promote the use of the local currency.

    Mr Sampah emphasized the need to discourage dollar pricing in various sectors, suggesting that the dollar should only be used for international transactions to strengthen the local currency’s value.

  • Economic crunch: Political capture is killing Ghana – Dr. John Kwakye

    Dr. John Kwabena Kwakye, director of research at the Institute of Economic Affairs (IEA), has bemoaned the political leaders’ preference for party interests over national interests in the management of the nation.

    On October 26, Dr. Kwakye stated in a series of tweets that the nation required a political figure who would suggestively buck the trend in order to foster progress.

    Dr. Kwakye cited Singapore’s success story under Lee Kuan Yew to argue that candidates for public employment should be chosen on the basis of their qualifications rather than their connections to or allegiance with political parties.

    On specific matters of the economy, the IEA Research Director advocated for the country to look within to find solutions to its challenges.

    He further suggested that a move to the International Monetary Fund was not an answer to the current economic downturn facing the country.

    “Washington is not the answer to our problems. We must find the solutions to our problems here ourselves. If our leaders cannot do that, then they have no business leading us. #Let’sFindSolutionsToOurProblemsOurselves,” the Economist wrote.

    “We should discuss both a short-term plan to stem the current slide in the cedi and a long-term plan to stabilise it on a lasting basis.

    “Remember one of Lee Kuan Yew’s secrets for Singapore’s success–MERITOCRACY! It means the leader gives public jobs to competent people and not necessarily to party people, friends or relatives.

    “Political capture is killing Ghana. When our leaders get into power, they work to promote their political party interest rather than the national interest. We need a leader who can break this obsession,” Dr John Kwabena Kwakye tweeted.

    Ghana’s economy has been experiencing a downturn in recent years. Inflation rates are at a record high level while the Cedi is also on a free fall against the US Dollar.

    Amidst the challenges, the government is negotiating with IMF to secure a $3 billion programme to be spread over a three-year period after a series of downgrades of the economy by rating agencies such as Fitch, Standards and Poor and Moody’s.

  • Solution to Ghana’s economic problems not in Washington – IEA

    The government has come under fire from Dr. John Kwabena Kwakye, senior economist and director of research at the Institute of Economic Affairs (IEA), for traveling to Washington to meet with the World Bank and International Monetary Fund (IMF) and represent the Group of Seven (G7) African Finance Ministers.

    The government delegation from the Finance Ministry was led by Ken Ofori-Atta, who made a suggestion that they would remain beyond the conference to complete Ghana’s negotiations with the Fund.

    According to him, the team extending their time will enable them to make some fair decisions.

    “We still are working through and as you know we are staying beyond the Fund, the World Bank meetings through, maybe, the 20th, so we will continue with the Mission and the work. We pray that that may give us enough time to be able to come to some fair decisions on the outlook.

    “I can tell you that the Fund staff is very motivated, which is good and we are 24/7, so the combination of their own enthusiasm, our clarity on the work that has been done to fulfil the President’s promise. If you look at the turnout of discussion for this annual meeting clearly, the world is recognizing that something different has to be done,” Ken Ofori-Atta said as quoted by Accra-based 3news.

    But Dr. Kwakye is of the view that staying longer in Washington DC would not solve the current economic problems the country is facing.

    He said, the long stay in the States will only make our economic situation uncertain and panic in the markets will prevail.

    “Our policymakers need to be reminded that the solution to our economic crisis lies here at home and not in Washington. The more they look up to Washington, the longer the uncertainty and panic in the markets will prevail,” Dr. John K. Kwakye tweeted.

    The G7 is made of an informal grouping of seven of the world’s advanced economies; namely: Canada, France, Germany, Italy, Japan, United Kingdom, United States of America and European Union.

    This group invited finance ministers from South Africa, Senegal, Togo, Zambia, Ghana, Guinea, Rwanda, Chad, Tunisia and Morocco for the all-important meeting.

    The meeting with the African Financial Ministers brings together central bankers, ministers of finance and development, parliamentarians, private sector executives, representatives from civil society organizations and academics to discuss issues of global concern, including the world economic outlook, poverty eradication, economic development, and aid effectiveness.

  • Solution to Ghana’s economic problems not in Washington – Dr Kwakye

    The administration has come under fire for attending the Group of Seven (G7) African Finance Ministers meeting with the World Bank/International Monetary Fund, IMF, in Washington, according to Dr. John Kwabena Kwakye, Senior Economist and Director of Research at the Institute of Economic Affairs (IEA).

    The government delegation from the Finance Ministry was led by Ken Ofori-Atta, who made a suggestion that they would remain beyond the conference to complete Ghana’s negotiations with the Fund.

    According to him, the team extending their time will enable them to make some fair decisions.

    “We still are working through and as you know we are staying beyond the Fund, the World Bank meetings through, maybe, the 20th, so we will continue with the Mission and the work. We pray that that may give us enough time to be able to come to some fair decisions on the outlook.

    “I can tell you that the Fund staff is very motivated, which is good and we are 24/7, so the combination of their own enthusiasm, our clarity on the work that has been done to fulfil the President’s promise. If you look at the turnout of discussion for this annual meeting clearly, the world is recognizing that something different has to be done,” Ken Ofori-Atta said as quoted by Accra-based 3news.

    But Dr. Kwakye is of the view that staying longer in Washington DC would not solve the current economic problems the country is facing.

    He said, the long stay in the States will only make our economic situation uncertain and panic in the markets will prevail.

    “Our policymakers need to be reminded that the solution to our economic crisis lies here at home and not in Washington. The more they look up to Washington, the longer the uncertainty and panic in the markets will prevail,” Dr. John K. Kwakye tweeted.

    The G7 is made of an informal grouping of seven of the world’s advanced economies; namely: Canada, France, Germany, Italy, Japan, United Kingdom, United States of America and European Union.

    This group invited finance ministers from South Africa, Senegal, Togo, Zambia, Ghana, Guinea, Rwanda, Chad, Tunisia and Morocco for the all-important meeting.

    The meeting with the African Financial Ministers brings together central bankers, ministers of finance and development, parliamentarians, private sector executives, representatives from civil society organizations and academics to discuss issues of global concern, including the world economic outlook, poverty eradication, economic development, and aid effectiveness.