Depreciating cedi: We better adopt a currency board or official dollarisation – Economist advises gov’t

The Director of Research at the Institute of Economic Affairs (IEA), Dr. John Kwakye has expressed worry about the continuous depreciation of the Ghanaian cedi.

The depreciation has seen the local currency performing woefully against foreign currencies, particularly, the US dollar and the British pound.

Concerned about the situation, Dr. John Kwakye has proposed that government adopt a currency board or make provision for the US dollar to be used in addition to or instead of the domestic currency.

“The fact that one thing is better than another doesn't mean it is good. The exchange rate increased from 1.2 to 4.2 during 2009-16 and has increased from 4.2 to 13.50 during 2017-2024 (May 7). Both are unacceptable.

“Given the pace at which the cedi is depreciating---and our ecomomic managers don't seem to have a solution, while the IMF is advising that we should allow it to depreciate further---we better adopt a Currency Board or Official Dollarisation,” Dr. John Kwakye said.

Other economists have cautioned that if the depreciation of the local currency is not addressed, hardships in the country will be worsened.

Businesses are also expected to be adversely affected.