Managing Editor of the Insight newspaper, Kwesi Pratt Jnr. has predicted that the cedi will start depreciating again, reaching Gh¢8 per dollar in the next 4 to 5 months, in spite of the $800 million dollars Euro-bond injected into the economy.
He explained that over the last 36 years, anytime the cedi depreciates, successive governments had used the same method of borrowing to shore up the local currency, culminating in the stability of the cedi for a brief period, mostly 5 months; then it begins to depreciate again.
Thus, the $800 million dollar Euro-bond that the Finance Minister, Ken Ofori-Atta recently negotiated, is "not something new".
Contributing to Radio Gold's 'Alhaji and Alhaji' programme, Kwesi Pratt was of the firm belief that measures being implemented by the Akufo-Addo government to solve the depreciation of the cedi is cosmetic.
"I will not be surprised even in the matter of 2 to 3 weeks, the cedi stabilizes around 4.8 or 4.9 to 5 to a dollar; it is going to happen, no doubt, in the next 3 to 4 weeks. But mark it, in 4 to 5 months time, the cedi will ferociously start depreciating and by the time we wake up, the cedi will be heading towards Gh¢8 to a dollar very soon," he forewarned.
He reiterated that the government will definitely pay back the loan which was used to stabilize the cedi with interest, and the condition of the economy will be worse.
"Your cedi is not doing well, all you do is borrow and pump into the economy to get the appearance of stability. Won't you be paying the monies you borrow back? When you begin to take $800 million dollars out of your economy to pay for the money you are using to stabilize the cedi, what will happen to the cedi again?" he quizzed.
He therefore opined that "if stabilizing the cedi by injecting foreign exchange into the economy is worth celebrating, we should have started our parties 36 years ago. I recall during the days of late Prof. Mills, when Dr. Duffuor was the Finance Minister, the same method was used and nobody organised any party."
"....as we are foolishly announcing to the currencies speculators that we are going to pump $800 million into the economy to stabilize the cedi . . . they are zooming in on us like flies and in a maximum of 4 months, currencies speculators will scoop all the $800 million dollars out of the Ghanaian economy because they are always watching to see where it is cheaper to buy foreign Currencies to maximize their profits . . . all these Mallams and Alhajis who are the Sheikhs of currencies speculations will become fabulously rich and the cedi will start to depreciate again," he added.
He therefore described as a complete 'waste of time and resources', the $800 million Euro bond capital injection into the economy by the Finance Minister in an attempt to stabilize the cedi; emphasizing that such a measure will not work.
The government, last week, raised $3 billion from international financial institutions through a three-tranched Eurobond which attracted more bids than the country asked for.
At the close of a roadshow in London, the appetite for the 2019 sovereign bond had swelled, resulting in orders totaling $21 billion – about seven times more than the amount needed.
The government delegation, led by the Minister of Finance, Mr Ken Ofori-Atta, however, accepted only $3 billion, in consonance with the amount budgeted for and approved in the 2019 Budget Statement and Economic Policy of the government.
Source: Daniel Adu Darko/Peacefmonline.com/[email protected]
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People like Ofosu Ampofo and majority of ndc will believe and support this Kwesi part. Much ado about nothing
MR. KNOW ALL YET KNOWS NOTHING.
KWESI WHEN THE CEDI WAS DEPRECIATING YOU WERE COMPLAINING. NOW THAT IT IS APPRECIATING TOO YOU ARE COMPLAINING..IS BETTER YOU GO BURN THE SEA. IS BETTER TO BORROW TO SAVE THE WHOLE NATION NATION THAN TO LEAVE IT FOR THE WHOLE NATION TO SUFFER.
@Dada Boat please read the solutions i have posted below. We do not need any magic it is only financial discipline and looking at different areas where we can gain competitive advantage.
All he spoke about was what will happen.. OK we get that.. what is the suggestion he is bringing on board so that we don't borrow or stuff like that... In Gh all the citizens know is criticism but never give a tangible suggestion which can be considered
Our thirst for borrowing to shore up our currency is the problem. It is not consigned to this government only. Folks, the writing is on the wall. Sa Sika no b3 sa. It will finish and we will either have to go for more, print more money, default on repayments and/or watch and crush the economy. We all know that resorting to some of these measures will depreciate the currency even more. No one will need to speculate but it is bound to happen. We have done this over and over again and expecting good results. It will not happen. We can theorise and philosophise but it will not get better. I have already posited on the financial discipline needed for our currency to stabilise. Dr Bawumia is right the fundamentals were weak during the NDC period and it is still weak if not weaker. If the Free Zones Board, for example, is not achieving what it should, let's scrap it. The National Development Commission is also not doing anything lets scrap that one also. All these groups, commissions agencies that are used to pack cronies should be scrapped because they are just avenues to waste our money. Financial discipline. Our public sector is bloated. Drain the swamp. Now we can look at areas of competitive advantage. One crucial area is salt production. We have an abundance of that and its semi-production is not difficult. Who doesn't buy salt in different forms? Food production, Pharmaceuticals and so on. Even marijuana. The pharmaceutical companies all over the world need supplies and it is not difficult to at least semi process. Our tax collection is weak and a few mystery shoppers can help to increase collections. There needs to be a political will improve the problems with our currency else we will always be borrowing to support our currency. These are simple and practical things. We wait for the next 7,15 and 25 years to be rescheduling and or paying all these debts we are accruing.
AS USUAL, MR. AGAINST IS AT IT AGAIN. ALWAYS SPEAKING IN THE NEGATIVE. GHANA WILL PROSPER WITH OR WITHOUT PRATT. HE DEFINITELY WILL BE LEFT BEHIND WITH THIS KIND OF MINDSET. BY THE WAY IS ALSO ENJOYING THE ELECTRICITY PRICE REDUCTION. GOD HELP HIM THINK POSITIVELY ABOUT WHAT OTHERS ARE DOING.
ENEMY OF PROGRESS. SHAME ON YOU KWASI PRATT. PROPHET OF DOOM. GOD WILL PUNISH YOU.
People with myopic minds like Kwasi Pratt has to be confined and isolated from the society. Everthing about Kwasi Pratt concerning Ghana is negative. I am not sure Kwasi Pratt is a real Ghanaian , No. I am not sure.
Why are we so negative, why cant we use the same energy of negativity to be a little positive