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22.12.2005 Feature Article

An imperishable monument to the Kufour Administration.

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Ladies and gentlemen, dear friends and foes, country men we are NOT living in the best of possible worlds. We see abject poverty in our mother land. We have and endless succession of political elite that are ethically challenged and appallingly arrogant. We have a handful of religious leaders that vulture-like fatten on the poor, the naïve, the gullible and the exploited and the oppressed. We have the cancer of corruption bubbling naturally like a fountain from every facet of our social and political lives. We live in an unmitigated sordid squalor in our cities. We have the murder of a prominent traditional ruler being treated with contempt and callous indifference. Even though the savagery and the unbridled cruelty exhibited by this heinous crime are unmatched, the government is paralyzed because the victim supported the 'wrong' political party.

But despite the Bamba antics, the Sheikh Ibrahim Quaye's loss of school certificates, Anane's failure to rein in his libidinal urges and misappropriation of tax payer's money to support his illegitimate child, the 'confessions' of Haruna Esseku, Lord Commey's 'revelation' and the pathetic spinelessness of the government in seeking justice for the late Ya Na, I also have to say that we are not living in the worst of ALL possible words. There is one area that the policies and the fiscal discipline of the Kufour Administration are yielding an appreciable result. The cedi, our national currency is not only stable but steadily appreciated against an array of well-regarded currencies like the US Dollar, the Euro and the Pound Sterling.

When the CPP Administration introduced the national currency, it was ridiculously and grotesquely pegged at two cedis, forty pesewas to the pound. The decision to peg the cedi so high then was not based on sound financial or economic principles. It was an exercise in idiotic matters of prestige, megalomania and naked nationalism. The economy of the nation was then on the precipice. Economic abyss was starring us glaringly in the face. Ghana could not meet her foreign exchange commitment despite choking regime of controls of imports by means of barter and import licensing.

“Imperialist' economics suggested devaluation of the cedi. A dogmatic Nkrumah would not countenance devaluation.

The NLC regime that ended the despotic nightmare of Ghanaians under the CPP did not only replace the cedi but peg it to the US Dollar. This did not improve matters. Ghana needed to produce more and export more.

The liberal, but charismatically challenged Abrefa Busia's regime went further by introducing Ghanaians to the concept of devaluation. He massively devalued the cedi. Before the full impact of the devaluation could have its course, fascist Kutu Acheampong foisted himself on the down trodden Ghanaians. Kutu reduced the percentage of the devaluation. Like the CPP regime, elaborate controls were instituted to shore up what soon became a worthless currency; worthless, because the fundamentals of the economy were not being adequately addressed. The government was still living beyond its means and borrowing profusely from the central bank. The other focus of the government policies was to stem the hemorrhage of foreign currency from the economy. To mop excess liquidity from an over heated economy, the Kutu Administration also yet another version of the cedi. Citizens with banking balances received one-to-one exchange for the new cedi; citizens without bank balances received discounted exchange rate for their cash. This creative and unorthodox attempt which was by all means a desperate attempt to shore up the cedi woefully failed. It failed because, painfully, the Nigerian Naira steadily started chasing the out the cedi out of circulation as many Ghanaians in Nigeria were sending an ever increasing remittances of the Naira to Ghana

Such was the pitiable picture when Rawlings was catapulted to the political initially. There was little time for Rawlings to address a tottering national currency. Rawlings it seemed primarily was more interested in cleaning the Aegean stables of filth and dirt. Blood flowed.

The ephemeral Limann's regime that succeeded Regime could not do much for the cedi. As every school child in Ghana knows, Rawlings mad his second unprecedented dash for political power. This dash ushered in the longest regime in the checkered history of both Ghana and its national currency.

Under Rawlings, the practice of artificially and whimsically pegging the cedi to a foreign currency was jettisoned. Market forces were released to determine the value of the cedi. As should be expected, the cedi witnessed a downward spiral. The strength and otherwise of the cedi was longer depended on a fatwa from the Castle. Foreign exchange bureaus were authorized to transact business. The age-old existence of a thriving black market in the cedi died a natural and a welcomed death during Rawlings's regime. This is a feather in the cap of Rawlings regime.

In a rare practice, the NPP Administration that succeeded the NDC regime had followed that policy of religiously allowing the cedi to find its own level. To the current Administration's credit, it has brought in more additional fiscal and monetary discipline to bear on circulation of the cedi. The unfettered frequent borrowing from the central bank seems to be a thing of the past. The result is a national currency that has not only stabilized but appreciated in value. The month, the monetary authorities recognized the cedis appreciation.

This is kudos to the Kufour Administration. Yours truly would now denominate some of its savings in the national currency. Given the high interest rate, it is now prudential so to do.

A lesson the government leaders should learn from my small act of vote of confidence is that desperate and passionate appeals from roof tops for Ghanaians to stay at home or invest in Ghana would be ineffective, until Ghanaians are convinced of improvement in the micro and macro economic conditions of the country. Kotey, Nikoi 341 Middle Road Hazlet NJ 07730 Views expressed by the author(s) do not necessarily reflect those of GhanaHomePage.

Nikoi Kotey
Nikoi Kotey, © 2005

The author has 23 publications published on Modern Ghana. Column Page: NikoiKotey

Disclaimer: "The views/contents expressed in this article are the sole responsibility of the author(s) and do not neccessarily reflect those of Modern Ghana. Modern Ghana will not be responsible or liable for any inaccurate or incorrect statements contained in this article."

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