GUTA Warns Gov't Over Cedi Fall
5/31/2012 3:02:47 PM -
The Ghana Union of Traders' Association (GUTA) has advised managers of the country's economy to immediately put measures in place to stop the rapid depreciation of the cedi, the country's currency, against major currencies.
'It behooves on the managers of the economy to quickly study, find out and tackle this problem head on, else it will lead to total collapse of businesses,' said George Kweku Ofori, President of GUTA in Accra at a media interaction.
Government, the association noted, has the responsibility to address the problem to develop the private sector which has been touted as the engine of growth.
'We, in the trading sector of the economy, have observed that whatever went into the thinking and approach in managing the current fiscal policy had been flawed.'
Explaining further, he said the development is eroding their working capital which include loans contracted from banks at high interest rates and other credit facilities from their business partners.
'This is making the servicing of our loans and other credit facilities as well as other financial commitments extremely difficult,' Mr Ofori said.
'It has also become a sort of indirect taxation and over burdening the already struggling business community.'
Manufacturing industries, the president noted, have also not been left out, saying 'it is overwhelmingly affecting them.'
By the end of the first quarter of 2012, the cedi had depreciated by eight per cent against the dollar due to the demand of the currency by both local and foreign investors and this propelled the Bank of Ghana (BoG) to release almost $220 million into the market to prevent the cedi from depreciating further.
However, the intervention by the central bank has not been able to stabilize the cedi. Currently the cedi trades at almost GH¢2 to the dollar.
He said 'there are economic indicators which show that all is well with the economy, especially in the oil sector, astronomical increase in the prices of cocoa and gold, the fair amount of inflow of Foreign Direct Investment (FDI) into the economy, but we in the business sector thought we would have respite and operate in this congenial economy environment.'
Mr. Ofori declined to give more details about the next line of action of the association if government fails to heed their call.
'We, as members of the business community and informal sector, will not sit unconcern to see our businesses crumble away.'
By Emelia Ennin Abbey