Stability Of Cedi Is Superficial - Asaga

Mr Moses Asaga, the Minority Spokesman on Finance, last Sunday said the seeming appreciation of the cedi was superficial and unsustainable since it was dependent on the fact that the government had frozen its legitimate expenditure.

He said, "government has not paid contractors, it is only paying emoluments of its workers but holding up money for administration. The needed foreign exchange of 250 million dollars and 2.3 trillion cedis to support the budget is not forthcoming"


Mr Asaga was speaking in an interview with the Ghana News Agency in reaction to a report in an Accra daily to the effect that President John Agyekum Kufuor told a delegation from Coca-Cola International that the revival of the economy was on course and that the cedi was appreciating.


The Minority Spokesman emphasised that the seeming stability the cedi was enjoying was because the government was not spending.


"All that it means is that you have money, which you can use to pay your debts but you refuse to pay and keep that money. When the time comes and you are compelled in one way or the other to meet your obligations, you discover that you don't have anything left", Mr Asaga said.

He said inflation last year was 42.1 per cent and not 100 per cent as the report said and given that the figure was now 36.8 per cent showed that the marginal drop was about four to five per cent adding,"expenditure will consume the drop if government begins to spend".


Mr Asaga said currently the demand for the dollar was low because "it is the off-season for imports. It is from September to December that traders chase foreign exchange to import goods for the Christmas.


He said the loans Parliament was approving now were monies negotiated by the previous National Democratic Congress (NDC) government and were strictly meant for specific projects and that such donor inflows could not be used to support the budget.