The cedi has taken another nose dive against the dollar and other trading currencies and now ranked one of the worst on the African continent.
The Bank of Ghana and the Finance Ministry are struggling, through various economic policies to stabilise it, but so far, they haven’t worked yet.
According to President Kufour, Ghana has to develop the manufacturing sector and strengthen the export sub-sector because, that will earn the country, the hard currency which will then shore up the cedi. “.., If not, it will keep on dropping and then we get back to the time where when you want to buy bread you will have find a wheel barrow to carry your cedi in to go and buy,”
President Kufour warned. He was speaking at a ceremony in Accra to celebrate the fifth anniversary of Ideal Finance Company.
Analysing the current situation, former President John Kufour said, “given the fact the world is moving into one common market of competitiveness and also the fact that Ghana is trapped into importing almost everything we use in our country, our economy is almost totally import-dependent.”
Explaining further on how to save the cedi, the former President said macro-economic management is key and the central bank should cooperate with the government on it’s budget but at the same time, remain independent.
He also charged government to live within it’s means without over spending, borrowing indiscriminately, and then end the crowding out of the private sector with it’s domestic borrowing.
The government’s efforts to achieve fiscal consolidation since mid-2013 have been undermined by policy slippages, external shocks and rising interest cost.
Until mid-2014, the Ghana’s net international reserves position had weakened significantly and the cedi exchange rate depreciated sharply, fueling inflationary pressures and seeing the re-emergence of double-digit inflation, and rising public debt according to the International Monetary fund.
Echoing concerns by economists that the problem with Ghana’s economy is the over dependence on imports, Mr Kufuor called for the private sector to be supported to boost exports.
“Don’t just diversify but focusing on what to do to encourage products that can be exported to earn hard currency.
Without that, remaining import dependent, we will have to find the hard currency to import what we need and also to boost the cedi, because when you go to our market, they are travelling internationally to buy things to come and sell in the market,” he adviced.
Former President John Agyekum Kufour said “if you go to Togo and you offer them the cedi I business transactions they will not accept it which is a problem for us even in the ECOWAS region.”
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