The Dean of University of Cape Coast School of Business, Prof. John Gatsi has sharply responded to President Akufo-Addo for blaming the free fall of the Ghana cedi solely on what he described as activities of speculators and fake news publishers on the cedi.
According to the economist, “Financial market speculation is an active part of financial market operations and speculation thrives on information asymmetry”.
He argued that, is rather a “Dysfunctional governmental communication” that “cause of Panic” on the forex market hence the blame on speculators could be baseless.
“Since the past three weeks a plea was made to government to be clear on the nature of debt restructuring being considered, government failed to provide such information as to whether or not Tbills will be affected.” – He said
“The dysfunctional financial market communication by government is the reason for panic and speculation.” – added
The lawyer further clarified his point that “Speculation is not the same as false news and there is no law against financial market speculation by using available information or non availability of information.”
For him, “Ghanaians should rather question why it takes a government more than three weeks to clearly indicate that treasury bills and pensions will not suffer haircut.”
“Now haircut is one attachment to debt restructuring what about elongation of maturity? Will elongation of maturity take place?” – Prof. Gatsi quizzed
Schooling President Akufo-Addo and government on the financial market, said said:
“What about the information given to and by some mutual fund managers to client to the effect that their instruments are now matched to market so they are are encouraged not to disinvest until market stabilization takes place. The information means people can only sell their bonds they are holding at discount and the reality is that secondary activity in fixed income transactions are illiquid. It seems the President was not given enough information to calm the market regarding the entire topic of debt restructuring. Debt restructuring ought to be discussed with the needed statistics.”
The Country has been experiencing the worse form of economic crisis since the return of constitutional rule in 1992 with prices of basic commodities shooting up by more that 50% and the local currency depreciating against the dollar by over 50% in the last 3months.