Finance Minister Seth Terkper has said harder work is needed to sustain Ghana's economic growth as well as the rise in the value of the local currency, so as to disentangle the economy from the woods.
According to him, past slumps in gold and cocoa prices conspired with the activities of currency speculators and the dollarisation phenomenon, to weaken Ghana’s local currency.
The Cedi lost about 40 percent of value to the Dollar since the beginning of the year.
It started regaining strength almost a month ago against the Dollar and other major currencies of international trade, following the infusion of $2.7 billion into the economy through a $1.7 billion cocoa syndicated loan facility and a $1 billion Eurobond flotation, which was oversubscribed on the international market.
Speaking about the fall in value of the Cedi, Terkper said: “Much of what we saw had to do with the setbacks that the economy suffered, but more with speculations."
“There were a number of speculators. We know a lot of people who moved, for example, to change their Cedis into Dollars, expecting that the Dollar will keep rising and then they change back into Cedis and make more money. Today they are going to be changing. And that’s the signature of speculation”, he noted.
As far as the strength of the economy is concerned, the Finance Minister agreed with the President’s recent comment that despite the appreciating value by the Cedi, the world’s second largest cocoa producer was still entangled in the woods.
“…I think His Excellency put it well when he said we are not out of the woods yet,” Terkper conceded.
“We do know that beside the short-term challenges, we also have those seasonal and structural difficulties, which we have to work hard to manage as a country, so I will just paraphrase and just say that the major term prospects are bright, but we need to work harder, which is the reason we are engaging, for example, the IMF to look at the policies that we are implementing, but also to get the balance of payment support.
“Other positive signs have been expectations that cocoa will do well–both in terms of crop size and the prices which have been going up,” he said.
Terkper observed that although the price of petrol has be “going down somewhat lately,” it has, nonetheless, “also become an additional buffer”.
“And going into the gas era–yes there are reasons as we stated on the road show and which the markets seem to buy in–the medium term prospects for the country going into gas and additional crude oil are good and what is left is to manage it well so that we can sustain the growth, get back to stabilising the economy, and moving on to the path of growth, which is the only one that will create jobs and help diversify the economy,” Terkper told Joy FM’s Super Morning Show Host, Kojo Yankson Tuesday.
