Member oF Parliament (MP) for Obuasi-West, Kwaku Kwarteng, has indicated that Ghana is currently facing economic challenges because of government’s mismanagement of the economy, excessive borrowing, unnecessary spending and corruption.
According to him, the re-denomination of the currency in 2007 cannot be said to be responsible for the present economic mess and therefore any attempt to reverse the policy could have dire consequences for the country’s economy.
In recent times, Government spokespersons have blamed the current economic difficulties on the re-denomination of the Ghana Cedi in 2007. But Mr. Kwarteng, who was Government Spokesperson on Finance and Economy under the previous Kufuor administration, indicated that assertions that price changes came in small increments prior to the redenomination were false.
“Indeed, it was after the re-denomination that we were told our economy enjoyed a long and unprecedented period of single digit inflation,” the MP stated in a release issued on Wednesday in Accra.
Explaining further, Mr Kwarteng said Ghanaians could easily conceal GH¢5,000 in their purses or breast pockets thanks to the 2007 re-denomination.
“Similarly, we do not have to write so many zeroes when recording amounts of money. This has been very good for records keeping and for communication.
“In short, the redenomination has eased transacting business with the cedi. And throughout the world, redenomination remains the only solution to bulky currency or excessive zeroes in a currency.”
He urged the Bank of Ghana (BoG) to ignore those suggestions.
It would be recalled that several explanations have been given by spokespersons of government and the ruling party due to the current economic crunch.
“First, we were told that the fall of the cedi was being caused by the activities of dwarfs, and this was said with all seriousness. After some time, we were told that the fall of the cedi and the rising inflation could be coming from the many tall buildings and skyscrapers emerging in the country, especially in the national capital.
“Then later, we were told that the fall of the cedi was coming from the work of satanic forces, and that the solution was to intensify prayers to arrest the cedi.”
The latest diagnosis that the problems of the economy were coming from the 2007 re-denomination of the cedi came from superstitious minds who had no scientific understanding of how the economy works, he stated.
“The re-denomination of the cedi in 2007 has served Ghana’s economy so well. But for the redenomination, we would have needed polythene bags today to carry a GH¢100 (the equivalent of ¢1,000,000 at the time). Our currency had before the re-denomination become so bulky that traders, who carried GH¢5,000 (the equivalent of ¢50,000,000 at the time) had to hire taxi to carry that amount at the car booth.”
He said, “Any attempt to reverse it will make Ghana a laughing stock internationally. Even a partial reversal of it will be suicidal for our economy
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