Senior Economist at the Institute of Economic Affairs (IEA), Dr. John Kwakye has recommended how the new government led by President John Dramani Mahama can stabilise the cedi.
The local currency made some gains against foreign currencies on the forex market in the build-up to the 2024 general elections.
However, data from last week show a slight depreciation of the cedi, raising concern about the need to implement measures to ensure stability.
According to Dr. John Kwakye, stability can be achieved in the long run if the new government focuses on export promotion, import substitution, and enforcement of foreign exchange market regulations.
“Stabilising the cedi on a lasting basis calls for a combination of: export promotion; import substitution; beefing up the FX cover for the cedi; increasing Ghanaian ownership of the economy; and enforcing FX market regulations,” the Economist proposed in a post on X.
Meanwhile, Dr. John Kwakye has bemoaned the high inflation in the country, arguing that it shows the failure of the monetary policy of the Bank of Ghana.
He recommends that the Central Bank should collaborate with the new government to address the underlying causes of inflation.
“Inflation has been stuck in the twenties for a year, while the Policy Rate has remained in the high twenties. This shows the failure of monetary policy. Bank of Ghana should collaborate with Government to tackle the underlying causes, namely food, energy and the exchange rate,” Dr. Kwakye said in another post.