'Needless' FX committee will only spend our money drinking tea, 'it's a PR stunt' – Pianim

Economist Kwame Pianim has said the recently-inaugurated FX Development Committee must be scrapped.

In his view, it is a needless committee which will only end up spending taxpayers' money on tea.

Addressing the media during the constitution of the committee in Accra on Thursday, 16 January 2020, a Deputy Finance Minister, Mr Charles Adu-Boahen, said the move complements the government’s efforts to stabilise the cedi.

According to him, the committee will review the current FX regime, identify the inherent constraints in the system and offer workable alternatives by way of policies and programmes which potentially, would reduce FX risks in the economy.

“Foreign exchange volatility remains a major concern for the government as this impact real output growth and also increase in price inflation. As empirically established, the seasonal fall in the value of the cedi can be explained by external headwinds and cyclical domestic demands for forex by corporates and individuals as well as the energy sector. The other factor exacerbating the situation is the currency market speculations,” the Deputy Minister stated.

In Mr Pianim’s view, however, “This committee they’ve set up should not be called a foreign exchange development committee. You want to make Ghana an export oriented-economy”, critiquing: “The focus is wrong”.

“The committee is made up of some very competent people”, he observed, “but they are too busy”, he noted, explaining: “The Minister of Agriculture should be busy transforming agriculture, the Minister of Trade should be busy sitting down with industry to decide the trade protocols.”

“I cannot see them contributing to anything”, he foretold, insisting: “Let’s dissolve it”.

“A forty-member committee, are we serious?” the stalwart of the governing New Patriotic Party (NPP) wondered.

“In the fourth year of this administration? We don’t need ideas, we’ve had ideas – aviation hub, we’ve had it; financial services during Kufuor’s time, we discussed it, Barclays was involved”, Mr Pianim recalled, stressing that what the government needs to do in the last year of its four-year term is “action, action, action”.

“If I see this committee, it seems like a public relations stunt; we are not interested in a public relations stunt. These people [committee members] are too busy. This 40-member committee, look at them, they are busy people. They are managing banks, managing ministries; what time do they have? This committee, if it’s a public relations stunt, that’s fine; if it’s eye service, that’s fine; but I cannot see them contributing to anything.

“Dissolve it. We don’t need it. What is it for? They are going to meet; we spend the little money we don’t have making tea for them? What are they going to do?”, a befuddled Pianim asked in his interview with Accra-based Citi FM’s Umaru Sanda Amadu on the station's Eyewitness News programme on Monday, 20 January 2019.

Mr Pianim wondered why Ghanaians think a stable currency was indicative of a healthy economy.

“We, in Ghana, are beginning to talk as if a stable cedi is the litmus [test] for sound economic management. We should get away from that nonsense. … A stable currency is not necessarily good. You need it to be flexible and that’s why we had a fixed exchange rate, it took President Rawlings a long time moving us from a market-determined economy to a reasonably market-oriented economy to change … We have the floating exchange, fixed exchange and then now we have a managed float, so, I do not understand why anybody thinks you have a cure for exchange rate development – the movement in the exchange rate”.