Utilize natural resources to strengthen the cedi — John Kwakye to govt

Dr. John Kwakye

In a bid to address the persistent devaluation of Ghana's currency, the Director of Research at the Institute of Economic Affairs (IEA), Dr. John Kwakye, has urged the government to explore avenues to gain full ownership of the country's natural resources.

Dr. Kwakye stressed the potential of leveraging resources like gold to support the Cedi, asserting that such a move could elevate the currency on the global trading stage.

Speaking in an interview with Citi TV, Dr. Kwakye emphasized, "The underlying fundamental structure of the economy hasn’t changed."

He added, "Relying on external loans to support your currency is not sustainable."

He further highlighted the importance of national reserves in shoring up the Cedi's value, advocating for increased ownership and utilization of Ghana's resources to bolster the currency.

"If we take ownership of our resources, we can use them to back our currency to strengthen it," the economist added.

Concerns over the Cedi's depreciation have resonated among various trade unions and associations, with many citing its detrimental impact on businesses across the country.

Recent reports indicate a free fall of the local currency, with the cedi currently trading at GH¢14.90 on the forex market, marking a significant depreciation from GH¢10.97 observed during the same period in May 2023.

Bloomberg's analysis attributes the Cedi's decline to various factors, including a drop in cocoa earnings due to adverse weather conditions and disease outbreaks, resulting in a loss of approximately $500 million in exports during the early months of 2024.

Despite short-term interventions, Dr. Kwakye cautioned that without substantial changes in economic strategy, the Cedi's vulnerability would persist, leading to continued depreciation in the long run.