Dr. Gideon Boako Assures Government Will Deal With Ghana Cedi Ailment

Dr. Gideon Boako, Spokesperson of Vice President Mahamadu Bawumia says, government is on course to significantly reducing the rate at which the Cedi depreciates against its trading currencies.

According to Dr. Boako, government has put in place some measures to manage the sudden drop in the value of the local currency against its major trading currencies, particularly the US Dollar.

The Cedi is currently being exchanged at ¢4.85p to $1 from ¢4.42 to $1 in September, 2017. The drop is affecting importers who have to issue more cedis for the dollar and other major trading currencies.

Some businessmen have already started lamenting over the fall of the currency.

“There’s some kind of management in the rate of depreciation of the local currency,” Dr. Boako says, likening the local currency’s predicament to a patient who had been sent to the hospital with a very severe medical condition and needed urgent attention.

“This is a patient with a huge ailment, the best thing that you can do is to try some treatments stabilise the patient before you do proper diagnosis and make sure that you eradicate the ailment from the body of the patient,” he told Raymond Acquah, host of Joy News TV’s current affairs programme Upfront on Thursday.

He disclosed that measures being implemented by the government are beginning yield positive results as the rate at which the cedi depreciates against the Dollar, has significantly dropped from the 35% experienced between 2012 and 2013, to about 3% presently.

Although Dr. Boako acknowledges that, that might not be the ultimate goal for a country like Ghana he maintains, “it gives an indication that…if this government is able to sustain the kind of fundamentals it is building” then the rate of depreciation can even be reduced to “a zero per cent”.

He said the current drop in the value of the cedi stems from the strengthening of the dollar largely due the decision by the Donald Trump administration to increase interest rates which he said has led to a higher rate in investments in the US.

Read: Interest rate hike in US cause of cedi fall- Prof Bokpin

“In terms of investment grading or credit, the United States is graded higher than an emerging economy [Ghana] and so if an investor invests in the United States and even gets 0.1% of return on the investment, he or she may be comfortable than taking the same money to the emerging economies in which default rate is high and investment rate is also high,” he explained.

But the good thing about this is that the effect of such a situation on the local economy may not persist for long, the Vice President’s Spokesperson anticipates.

But Dr. Boako assured that “with the kind of fundamentals that we have and the kind of policies that government is putting in place, this kind of turbulence is not going to be elongated but rather will be a short-lived turbulence for businesses to have the space and the latitude to plan in going forward.”

Watch the discussion below: