“…’supporting’ the cedi prevents the right investment decisions from being made, 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 damages 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. Unemployment and poverty will 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…” says Ken Thompson, Chief Executive Officer of Dalex Finance.
“…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….” he said.
Touching on some of the pragmatic measures that can help address the phenomenon in the long-term, he said “…agriculture is the silver bullet. Make agriculture ‘sexy’, provide the rural areas with wifi, 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. “…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…”, he stated.
He seized the opportunity to clear the myth that blames the fall of the cedi on Forex Bureau operators. He said “…these operators do not have the resources to undertake the kind of speculation we mistakenly credit them with. He said 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 questioned.
According to Mr. Thompson, we are exporting Ghana’s wealth and jobs overseas by continuing to support imports of goods and services.
Characteristic of him, Mr. Thompson was candid with his views when he spoke at the Media General Economic Dialogue Series held in Accra recently. The event was on the theme “The Ghana cedi, breaking the cycle of depreciation”.
Other speakers at the event were Dr. Tony Oteng-Gyasi, former AGI President; Messrs Emmanuel Asiedu-Mantey, a former Deputy Governor of the Bank of Ghana (BOG) and Kwame Pianim, an Economist.
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