Ghana Cedi Not In Good Standing

The Executive Secretary of the Importers and Exporters Association, Sampson Asaki Awingobit has rejected claims that the cedi has remained relatively stable over the past few months.

In his mid-year budget review on Thursday, the Finance Minister said the cedi's performance under the Nana Addo government had been impressive so far.

Quoting figures to support his claim, the Minister said “the year on year depreciation of the Ghana cedi against the US dollar stood at 4.9% in 2017. It was 9.7% in 2016. It was 15.7% in 2015. It was 31.3% in 2014 and 17. 5% in 2014.”

The Minister added that “a further interrogation from the Bank of Ghana shows that the depreciation in the first half has been the best since 2012. It is instructive to note that from January 2018 to June 2018, the Ghana cedi depreciation against the dollar was 2.4% as against 17.2% in 2012, 3.3 % in 2016 and 3.7% in 2017. If this is anything to go by, it means the 2018 performance of the Ghana cedi is likely to be better than even the 4.9 percent we experienced in 2017 which was an all-time low, compared to the four years of the Mahama administration.”

Mr. Awingobit, however, discredited this assessment, saying importers and exporters continue to bear the brunt from the falling cedi.

“The Finance Minister described the cedi as relatively stable. For us, in the business community, we were considering the cedi depreciation to the dollar, and we noticed that the black market is now controlling our cedi or the interbank rate.

“If you go to the interbank rate, it is about 4.5 %, if you go to the black market, you talk about 4.8 or 4.9 so it is almost escalating so when the Finance Minister comes and uses the word relatively, for the business community, we want to find out what the government will be doing to cushion or arrest the cedi depreciation.”

As at May 7, the cedi was trading at 4 cedis, 41 pesewas, but by June 7 it had depreciated by 0.7 percent to 4 cedis, 44 pesewas.

Cedi depreciation: Avedzi speculating to cause panic – Oppong Nkrumah

A Deputy Information Minister, Kojo Oppong Nkrumah, recently criticized Deputy Minority Leader, James Avedzi, saying his speculation about the depreciation of the Cedi against the dollar only seeks to create panic.

James Avedzi said he expected the Cedi's recent depreciation to the dollar to continue into December where the yuletide ushers in higher demand for the foreign currency due to high imports.

The depreciation of the Cedi was one of the significant issues the NPP criticized the Mahama government for when they were in power.

At the time, Vice President Dr. Mahamadu Bawumia consistently taunted former President Mahama for failing to halt the fast depreciation of the Cedi.

Mr. John Mahama recently complained about the cedi to dollar exchange rate, which he said stood at GHc4.7 to $1.

He accompanied his words with a short video of Dr. Bawumia supposedly expressing misgivings about the NDC's handling of the local currency while they [NDC] were in power.

NPP's economic fundamentals stronger than Mahama's 'mess'

Dr. Mahamudu Bawumia subsequently issued a scathing response saying Mahama's criticism only exposed his lack of understanding of crucial aspects of the economy.

“It has been brought to my attention that former President Mahama has recently been talking about exchange rate depreciation. The former President's comments once again, sadly demonstrate his lack of understanding on key aspects of our economy,” said the Vice President.

In Mr. Bawumia's view, NPP has demonstrated to be “by far, better managers of the Cedi” than the NDC.

The central bank has already assured that the changes in the exchange rate are temporary; hence the cedi will soon see some stability.