Today in History: What have you done to give 'real value to the cedi?' – Economist to Bawumia

An economist, Dr. Sam Ankrah took a swipe at Dr. Bawumia for the depreciation of the cedi.

“So the question relevant to the strength of the Cedi is, what have they done to underpin and give it real value, other than continuing to pump USD into the system in order to ensure there is no unreasonable demand for FX due to shortages? The answer is nothing. So when you can’t borrow anymore, you can’t pump USD into the system, your Cedi devalues,” he said.

Read the full story originally published on April 10, 2022, by starrfm.com

An economist and business strategist have hit back at the government over the measures being adopted to strengthen the Cedi as it continues to struggle against major international currencies, particularly the dollar.

According to Dr. Sam Ankrah, the government has not done enough to improve the performance of the Ghanaian currency against its major trading partners.

It comes on the back of the latest address by Vice President Dr. Bawumia who blamed the delayed approval of the 2022 budget for the poor performance of the Cedi.

In a post, the global business strategist said: “Because the Cedi has no intrinsic value other than being a medium of exchange in Ghana, every time there is increased demand on USD, there is a corresponding increase in the amount of Cedis required to buy the FX.

“So the question relevant to the strength of the Cedi is, what have they done to underpin and give it real value, other than continuing to pump USD into the system in order to ensure there is no unreasonable demand for FX due to shortages? The answer is nothing. So when you can’t borrow anymore, you can’t pump USD into the system, your Cedi devalues”.

He stressed: “What should be happening is that imports to Ghana, especially those that we consume significant amounts of, should be restricted/stopped.

“This point is significant of a wider point which is, there is no policy decision that has been taken by this government, which will have a positive, permanent and lasting effect on our economy. They have no intention of changing their expenditure profiles or giving real meaning to the Cedi. They just need continued access to funds to continue doing what has been done before”.

On measures by the government to stem the tide, Dr. Ankrah noted: “The economy needed strong measures which would reshape certain macroeconomic indicators and boost investors’ confidence. What one fundamental change has he made that signposts you to a different modus operandi for future expenditure?

“None of the flagship programs has been reviewed, Pay cuts in the public sector are temporary, payroll employee numbers are still the same with ghost names still in the system, a moratorium on travel and 4×4 purchases again temporary. Etc

Where are the hard policies that curb frivolous expenditure permanently? Why no ban on 4x4s? Foreign healthcare travel? Cutting government payroll? Reviewing programmes for productivity and sustainability? This cushions the people how? It doesn’t. People’s issue is about job opportunities and depreciating Cedi”.