The Progressive People’s Party, a yet to be licensed political party, has reviewed the poor performance of the Ghana cedi against its foreign trading partners. While the public and the media have been fixed on the Woyome trillion cedi payment and the Hon. Martin Amidu’s charge of corruption against NDC members, the economy has been experiencing significant threat.
From the last quarter of 2011 through to the opening weeks of 2012, the local currency, the Ghana cedi has experienced sharp depreciation to the US Dollar, Pound and Euro affecting investor and business confidence in the country.
Traders, corporate Ghana and Ghanaians are lamenting the effects of the depreciating cedi against other trading currencies as their purchasing power has been drastically reduced. Indeed, business people have lost money, big money. The Bank of Ghana has recognised this threat to the economy and has pumped several millions of US dollars into the system. But, the Ghana cedi is still losing value. Indeed, we find it rather strange that our forex reserves during 2011 fell despite oil export revenue coming on stream, a record cocoa harvest and an all time high price for Gold, from 3.8 months of import cover ($4.77bn) in January to 3.5 months ($4.59bn) in August.
The Cedi’s performance during the 2011 financial year could be described as disappointing after the local currency failed to live up to its previous year’s 1.69% appreciation. We had known all along that starving the nation of funds, hoarding dollars at the Central Bank and freezing public sector employment could not lead to long term gain. Furthermore, this clearly demonstrates the Mills-Mahama NDC Administration’s inability to balance monetary policy and fiscal discipline. It is also clear the NDC Administration’s failure to utilize efficiently loans and grants from foreign donors.
The PPP wishes to sound a very loud alarm bell to all Ghanaians to be wide awake and pay attention to what is happening to the economy and not be taken in by all the noise on the political front. We should remember that it is when President Mills was Chairman of the Economic Management team with his Vice President as a Member and Dr. Duffour as the Governor of the Central Bank that the Ghanaian economy suffered greatly and collapsed under the heavy weight of high inflation and a cedi that lost value by the minute.
Consistent with the PPP’s good economic management principles, we will bring fiscal discipline into the system and at the same time support our indigenous businesses to ensure that we keep money in our own banking system to be used to support our private sector, when we get the mandate to govern the country in the 2012 elections.
We will also bring the economy back home by using government’s purchasing power to ensure that our local contractors, consultants and industries gain a market at home, will reduce pressure on the Ghana cedi while creating jobs for our men and women. Clearly, Ghana needs the progressive, pragmatic approach of the PPP to keep the value of the cedi and restore human values.