Business News of 2014-07-14

Exporting more can halt cedi depreciation – Fiifi Kwetey

Former Minister of State at the Presidency in charge of Financial and Allied Institutions, Fiifi Kwetey has said Ghana’s present economic challenges provide an opportunity for exporters to profit by exporting more. This he said will not only help profit the local exporters but help halt the decline of the cedi.

According to him, even though the rapid depreciation of the Cedi is creating difficulties for importers, it does on the other hand provide opportunities for exporters.

“The depreciation of the currency has brought quite a number of difficulties to the economy, problems to importers, problems to government; problems to consumers because we have prices moving up, but underneath those problems lies opportunities as far as export are concerned. Because whenever currencies depreciate, it becomes increasingly more viable to do export because that’s far more profitable,” Mr. Kwetey told Citifmonline.com in an interview.

The Ghana Cedi has experienced 27% depreciation since January 2014. The Bank of Ghana introduced some rules in February as part of measures to save the cedi from further fall. Among the rules commercial banks were banned from issuing cheques and cheque books on Foreign Exchange Accounts (FEA) and Foreign Currency Accounts (FCA).

Banks were also prohibited from granting a foreign currency-denominated loan or foreign currency-linked facility to a customer who is not a foreign exchange earner. Before the measures, one needed an average of GH¢2.40 to obtain a dollar, having started the year exchanging GH¢2.23 for the dollar on January 6.

Currently one needs about GH¢3.40 to obtain a dollar. The situation is affecting the price of goods and services. All the measures notwithstanding, the Ghana Cedi is still depreciating against major trading currencies.

Mr. Kwetey said there are some positives that can be focused on as the Cedi keeps depreciating against major trading currencies.

“Not to say that the currency must continue to depreciate, but while we still have this difficulty, it’s important for our young people to see an opportunity even underneath the problem. So it is all about perspectives. While others can focus entirely on the problem, some can look beyond and see opportunities to take advantage of them and export is one of them especially in agribusiness,” he said..