Former Finance Minister under the erstwhile Mahama administration, Seth Terkper says it is time the managers of the economy and other relevant stakeholders focused on the issues that affect the cedi leading to its constant decline against other major trading currencies, particularly the dollar.
Seth Terkper believes the time is right to have a discourse devoid of politics as the nation like that which the nation witnessed prior to the 2016 elections when the performance of the currency was very topical.
He agreed that the issues confronting the cedi cannot be said to be specific as the economic conditions at different times affect its performance, however, there are some solutions that could be put in place in the short, medium and long term to check its performance.
The Ghana Cedi has declined close to 13% since December against the US Dollar and currently sells at about GHC5.56 to the Dollar.
This has caused many to raise eyebrows, particularly when prior to their election in 2016 and shortly after, Vice President Bawumia and other government spokespersons touted their competence in managing and improving the fortunes of the currency.
“I think it is time for sobering reflection by everybody because the Cedi was subject to intense debate and discussion during the last election and I don’t want to go over this, together with issues like I will not borrow when I come office, together with issues like we can arrest the Cedi, we know the fundamentals, so I think it is time for sobering reflections by all of us. It is good you have gone back and I think one of the lessons from going back is that there aren’t same set of issues, some will be similar some will be same but the economic situation differs from one time to the other but I think comparing the headlines is good,” he explained.
The Former Finance Minister added “It is time to focus on the issues collectively and look at the solutions. What solutions can be short term and what solutions over time will increase the supply of foreign currency because it is a question of people need the Dollars to pay for imports and that is the demand side, and there are the cocoa farmers, the miners and others who are boosting the supply.”
The Cedi under the former Finance Minister’s watch in 2014 depreciated by about 33% and 22% in 2015. This resulted in the release of forex into the economy by the Central Bank and issuance of “Home Grown Policies” and also the IMF deal.
Comparing the situation of the Cedi decline during his tenure and what the nation is experiencing now, Seth Terkper was baffled that the currency is experiencing such fall despite the amount of forex available to the government.
He said between 2017 and 2018, the government has had close to 200% more foreign exchange into the economy largely due to Oil prices and Cocoa prices.
On the back of this, he is convinced there is more to the current situation than is being speculated and has called for more open discourse about the matter to identify the challenges and institute appropriate measures.
The Former Finance Minister recounted, “from the end of 2015, 2016 when we had this crisis, when the prices went down output went down. The supply of foreign exchange from Oil was $500 million. Today, we are making about $1.8 billion from crude oil alone to compliment cocoa. That is why I mentioned the period. What is it that may be going on that we may not know? Considering that if you compare the period now from back then, there is more supply into the economy, so what is it that is not working?”
His call for broad discussions about the declining currency comes at a time when renowned economist, Dr Nii Moi Thompson has made similar proposal arguing that no single government has the brains to solve the currency and economic challenges of the country.
By: Jonah Eledi/awakenewsonline.com