The Institute of Economic Affairs (IEA), has described Akufo-Addo’s government’s dependence on funds from the International Monetary Fund (IMF), the World Bank, and other donor agencies to strengthen the local currency as a lazy man’s approach.
Director of Research at the IEA, Dr. John Kwakye, explained that the government’s heavy reliance on Eurobonds and cocoa syndicated loans was not prudent.
He said this while addressing a press
conference on Wednesday, April 3, 2024.
He argued that over-reliance on foreign aid is unsustainable.
He further posted that the pressure on the cedi will resurface when the loan repayment is due.
He suggested that increasing forex earnings and reducing import demand are the most effective ways to stabilise the cedi.
“The Governor admitted that the foreign exchange market came under some pressure, both seasonal and non-seasonal-in February and early March. He reported that in the year to 20th March, 2024, the Ghana cedi recorded a depreciation of 6.8 percent against the US dollar. He, however, stated that the cedi “continues to recover its value.” But the question is by what measure?
“Certainly, not in nominal terms because since he spoke on 25th March, the cedi has continued to depreciate, reaching nearly GHS13 to the dollar. Let us repeat right here that relying on funds from the IMF, World Bank, Eurobonds, cocoa syndicated loan, etc. to bolster the cedi, as we have been doing, is not only “a lazy man’s approach,” to say the least, but also clearly unsustainable as the pressure would be back on when the loans fall due for repayment.”
“The way to stabilise the cedi on a durable basis is to increase our FX earnings through greater ownership of, and value addition to, our natural resources, to reduce our import demand through domestic industrialisation and to entrench fiscal and monetary discipline,” he said.
By: Rainbowradioonline.com/Ghana
