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The Ghana cedi will continue to experience volatility till the real sectors of the economy are well targeted to ensure increased productivity, some economists have warned.

The experts said government will need to do more in addressing the fundamental weaknesses in the economy, “such as increasing production in agriculture and industry.”

This, according to them, is the only way the perennial challenges with the cedi can be effectively addressed.

The cedi recently recorded an impressive appreciation following the Bank of Ghana’s dollar injection into the market from time to time. It has, however, started declining in value in the last few days.

During a panel discussion on the economy organised by research organisation Good Governance Africa (GGA) – West Africa Centre, participating economists generally maintained the way out is for government to focus on the economic fundamentals.

Economist and Head of Finance at the University of Ghana Business School, Dr Godfred Bokpin said what is happening to the cedi is simply a reflection of the fundamentals of the economy.

Dr Bokpin pointed out that the cedi is as strong as the fundamentals of the economy and “we are talking about agriculture, industry and service.”

“When you have these sub-sectors doing well, the cedi will be able to have the necessary support in order to maintain its strength against the major trading currencies because when the cedi interacts with the other major trading currencies, what is backing the currency becomes very important,” he pointed out.

He indicated that when the fundamentals of the economy are put right, the cedi will necessarily provide good feedback.

There has to be an integrated approach where all the sectors that are related to the economy, such as the ministries of Food and Agriculture, Trade and Industry and Finance, to address the issues with the currency.

Director of the Institute of Statistical, Social and Economic Research (ISSER), Professor Felix Ankomah Asante also expressed worry about the cedi’s predicament, saying the real sectors of the economy - agriculture, industry and services - are not supporting the currency.

“If you are in a country where within a week your currency moves from GH¢4.2 to GH¢2.9 then you should be asking some serious questions as to what could be driving that kind of appreciation,” he said.
Prof Asante lamented the low productivity from industry, agricultural and services sectors of the economy, noting that “we are not producing anything.”

He indicated that the discussions about how the cedi could be stabilised should be elevated from what the expected monies from the cocoa syndicated loans, IMF monies and so on could do for the currency since that would not sustain the currency.