Cedi fall: Ghana's economy needs restructuring - Andani

MD of Stanbic Bank, Alhasan Andani, says ongoing efforts to stabilize the falling cedi may yield some positives, however, a true remedy for the local currency’s woes is an overhaul of the economy.

“[The Cedi’s fall] is a structural thing that Ghana has to think about. Our imports exceeds exports. We don’t print the U.S. dollar or any foreign currency for that matter. We’ve got to trade goods and services out of Ghana to receive it”, Mr Andani said.

The experienced Banker was speaking to journalists after a Stanbic Bank donation at the Korle Bu Cardiothoracic and Burns centres.

The British Pound and Euro are currently selling at seven and five cedis respectively at some forex bureaus across the country. The British pound started the year (2015) at five cedis across forex bureaus in the country while the Euro started at 3 cedis, 90 pesewas. The Pound and Euro are not the only major foreign currencies thrashing the cedi on the forex market.

The dollar last month hit four cedis after rallying between 3 cedis 80 and 3 cedi 90 pesewas for weeks and is now being sold at 4 cedis 45 pesewas in forex bureaus.

Mr Andani said although donor support as well as fiscal support from International Monetary Fund (IMF) may keep the cedi steady, these options are not likely to last.

The Bank of Ghana is also reported to be pumping some 20 million dollars daily into the economy to keep the cedi from plumetting further.

“What we need to do as country is to really restructure our economy because the imbedded imports cost in foreign currency simply exceeds our export revenue. That is the fundamental thing that must change. Nothing else will change if we do not change the structure of the economy to ensure that we package and sell more goods and services out of this country, bring in the dollars so we can use the dollars to acquire what we demand from outside”, he proposed.

He is also advocating a reduction in the imports of goods and services that can easily be produced in the country.

“We don’t want to hear that we’ve got to work hard to produce goods and services which we can sell to foreigners so that we can get the U.S. dollars to buy goods and services which the foreigners have worked to produce, which we want. That is the fundamental issue”, he stressed.

Story by Ghana | Myjoyonline.com | George Nyavor | [email protected]