Dalex Finance kicks against supporting the local currency

Mr Kenneth Thompson, Chief Executive Officer of Dalex Finance, has kicked against supporting the cedi as according to him it prevents the right investment decisions from being made.

“Supporting the local currency prevents us from changing our consumption habits and puts our food security at risk by reducing the price of imported food and making our local food production expensive and uncompetitive.

“This damage our agricultural sector and puts the nation’s food security at risk. Let the cedi fall to reflect its true value. This will promote local food crop farming and exports,” Mr Thompson stated at the Media General Economic Dialogue Series held in Accra.

The event was on the theme; “The Ghana cedi, breaking the cycle of depreciation”. Other speakers were Dr. Tony Oteng-Gyasi, former President of the Association of Ghana Industries; Mr Emmanuel Asiedu-Mantey, a former Deputy Governor of the Bank of Ghana and Mr Kwame Pianim, an Economist.

Mr Thompson said Forex Bureau operators cannot be blamed for the fall of the cedi; stressing “these operators do not have the resources to undertake the kind of speculation we mistakenly credit them with. The operators should rather be appreciated for making the value of the cedi even lower. They perform a very effective arbitrage function”.

He said the woe of the cedi is purely a structural problem that will require a long-term effort and a painful process to address “instituting kneejerk measures to arrest the downward slide of the currency will fail.

“How can we expect to correct a structural problem without pain?

He noted that unemployment and poverty would continue to rise unless “we start reducing the level of food imports and increasing local food production. If we continue to import food, one day we will lose our ability to produce food altogether and if our trading partners get upset with us, we will starve”.

He said “we are importing everything and producing virtually nothing. This is the same country that took cocoa, which is not indigenous to Ghana, developed it, and at a point, became the number one exporter in the world, so don’t tell me Ghanaians do not respond to economic incentives”.

Touching on some of the pragmatic measures that can help address the phenomenon in the long-term, Mr Thompson said “agriculture is the silver bullet.

“Make agriculture ‘sexy’, provide the rural areas with internet connectivity, roads, health facilities, potable water, good schools, extension services and all the things that will make life comfortable for those who choose to live there, otherwise we will end up nowhere”.

He also emphasized the need for the provision of tax and other incentives to exporters, stressing “let us provide market development, capacity building and access to finance to exporters.

“Just focusing on replacing the food and livestock that we import such as rice and chicken will make a huge difference to Ghana’s foreign exchange reserves and food security”.

Mr. Thompson, we are exporting Ghana’s wealth and jobs overseas by continuing to support imports of goods and services.