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Ghana’s Economy Heading For A Crash; Cedi Will Fall To GH¢6.00 To US$1.00 Soon   
 
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12-Feb-2015  
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Kenneth Kwamina Thompson
 
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Chief Executive Officer of Dalex Finance and Leasing Company Limited Kenneth Kwamina Thompson has predicted the doom of the country’s economy in 2015 saying “we are heading for a crash as a country”.

According to him, there is no sign of the economy improving so long as “we spend 43 percent of our income paying public servants who are less than 10 percent of our population” and as “we continue to spend over 70 percent of our revenue servicing debt and on single Spine Salary Structure”; exclaiming that “Ghana is broke”.

“Government of Ghana is broke and this is what the Bank of Ghana told all of us in its report of the Monetary Policy Committee meeting of November 2014; anyone who regularly spends more than his income is broke”, he stated.

Speaking at the annual CIMG Program, Mr. Kenneth Thompson revealed that even though the IMF bailout deal will be signed this quarter, the bailout money will be delayed due to the Government missing its targets set in the front loaded IMF Conditionalities.

“The IMF will not accept any ‘kpa-kpa-kpa’ figures; we have made missing budget targets a national art form in recent years”, he predicted.

His predictions on Ghana Government borrowing were that the Fiscal Indiscipline will continue as there is indication from the government that it is going to spend within its budget making the Treasure Bill Rates rise to 37 percent and inflation surge to 25 percent.

He again said that Ghana’s borrowing had reached unsustainable levels at 61 percent of GDP at the end of 2014 because the government spends above its means, creating and increasing state debts every year.

He went on to claim provocatively that the Cedi will fall to GH₵ 6.00 per the US$1.00, attributing the predicted fall of the cedi to the overall appreciation of the US Dollar and to almost all major currencies as Ghanaians continue to love foreign things.

Mr. Kwamina said “Let the Cedi fall to its true value. The overvalued currency robs the country of jobs as we stop local production because foreign goods are cheaper.”

He bemoaned the over-reliance of imports into the country that over a short period of time “Ghanaians have stopped eating the gari, brown rice, yam, etc but rather prefer to eat perfumed rice, quacker oats, indomie and pizza, asserting this will cause the major currencies like the Dollar to appreciate and the Cedi depreciate.

This he said has exacerbated by the impressive performance of the Dollar globally which has been further boosted by the recent fall in the prices of crude oil on the world market.

He pointed out that until foreign products are made more expensive in the country, as compared with local products, a lot of people will continue to patronize foreign products which will not only negatively affect the value of the Cedi but also take jobs away from the country.

He was quick to add however that, competing with foreign products will be most difficult because it is cheaper to produce outside than in Ghana because the Cedi is over-valued.

For this to be addressed the CEO of Dalex has called for policies that would allow the Cedi to correct itself and also increase exports, which involve collapsing all firms in the country that are import-based and revive as well as introduce ones that are export-based.

He chided the level of waste in the country, asking that Ghanaians in general, especially the public sector to do enough to cut-back on waste – by turning of air-conditioners, and other electrical gadgets when they’re not in use among others. This he said could save the country and its people a lot of money that would otherwise be spent on paying for electricity.
 
 
Source: Daniel Adu Darko/ Peacefmonline.com/gh [Email:[email protected]]
 
 

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