A Deputy Minister of Finance with the Mahama administration, Kweku Ricketts-Hagan, has blamed the Akufo-Addo government for the fast depreciation of the cedi against some major trading currencies.
Mr. Ricketts-Hagan contends the economy is suffering from the New Patriotic Party’s scathing assessment when it was in opposition ahead of the 2016 elections.
This has created the impression of an increased risk of doing business in Ghana, which inevitably affected the value of the cedi, he argued.
President Nana Akufo-Addo’s maiden State of the Nation address also painted a bleak picture of the country’s economic standing, as he highlighted unstable economic indicators, increasing debt and missed targets under the IMF programme.
But in a Citi News interview, Mr. Ricketts-Hagan urged government to stop speaking ill of the economy and scaring investors.
“The foreign exchange market does a lot of speculation therefore if you are talking down your economy then what you are doing is that, you are making the investors in our economy panic because if people don’t have confidence in your economy as it is being portrayed by you yourselves as a government then people who have invested here will begin to take their investment out.”
“By them taking their money in dollars and liquidating whatever assets they have here, they will use the cedis they receive here to buy dollars and repatriate them so it is indeed a factor,” he explained.
He also cautioned that this rhetoric fed negatively into the currency market and the credit rating markets.
“If you are talking down your economy, you have to be careful, and when we do it just to score partisan points by saying that previous government has done badly with the economy, you are not doing the country any favour… Recently you have heard the likes of Fitch thinking of possibly downgrading Ghana’s economy. These are all as a result of talking down the economy.”
Performance of cedi so far in 2017
The cedi commenced 2017 at GHc 4.2 on the interbank foreign exchange market.
Figures available to Citi Business News from the Bank of Ghana show that the cedi has depreciated by about 5.4 percent between January and February of this year alone on the interbank forex exchange market, and as much as 6.72 percent in the same period across forex bureaus in the country.
In the same period in 2016, the cedi performed better in forex bureaus across the country depreciating by only 2.5 percent.
Source: Daily Post/Citifm
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When an economy develops and begins to become sophisticated, it becomes sensitive to stimuli response to which reflects in key indicators such interest rates, currency depreciation and stock prices. Such stimuli include utterance of highly placed state officials. The current predicament of the Cedi could be largely blamed on projection of negative image of the Gh economy by the president, his vice and other state officials. If you state NDC has hidden GHS10 billion debt undisclosed, it is good for political reasons but has negative consequences on bond rates, FDI, depreciation and general price levels ( inflation). That is why Dr. Bawumia must grow to know how to handle sensitive facts. He caused a lot of damage to the Gh economy in opposition and still doing so. The finance Minister looks careful in his utterance because of same reasons. Osafo Marfo and others must learn from him. But who knows? with falling cocoa prices in the wake of criticisms leveled against the previous regime for cheating farmers, the only way the new government could pay farmers is to allow the Cedi to take nose dive.
Elections have consequences. For you, the consequence is for you to stay home for the next 4 years and allow those who have the majority's mandate to govern. It has been only 2 months and you are already feeling the heat?
Innocent face but very wicked within. Are you to be blamed for state of the economy? Even car you grab all of them and your name was among the list. I know mps were given car loans but you still managed to grab more cars. If this is not greed then it is what? Have you heard from Trump administration that Obama appointees have grab cars. Oh NDC and their greedy b..a..s..t..a..r..d..s.
What kind of pedestrian economic thinking is that ; BY THIS NDC FULL RICKETT HAGAN !!!!!! because there is nothing call talking down an economy ; if the fundamentals of you economy is not right there is nothing you can do about it ; investors know trends in every economy and therefore talking about it does not have any effect on the cedi ; the truth is that there NDC left the economy in a mess ; they did not tell foreign lenders and investors the true state of the economy in terms of inflation ;unemployment ; lending rates ; GDP ratios besides the country is not earning enough dollars to cater for the huge appetite for imports ; the second point is that the Nana Addo government is taking strict measures to rationale on our expenditure ; IT IS NO MORE SPEND; SPEND; SPEND ; Nana Addo have put the brakes on these unplanned expenditures by Jon Mahama and these NDC KROOKS ; besides the government should stop using our dollars to finance private imports which ends up in neighbouring countries like Burkina ; Ivory Coast and Togo.