A currency analyst with Gold Coast Investments Limited, Sammy Kofi Ampah says it is too early for government to consider scrapping the Ghana cedi as a legal tender for the nation.
An Economics Lecturer at Yale University, Vikram Mansharamani, says the cedi since independence in 1957 has depreciated 99.99% which he attributed as the cause of the country’s economic challenges.
He subsequently suggested that the government should highly consider scrapping the cedi and adopting the dollar to replace it.
Mr. Ampah believes the cedi is “not that bad. It has been depreciating since independence but…it seems to have a long-term prospect” adding that Ghana’s rich natural resources serve as “the stronghold of our currency.”
The currency analyst admitted that the concerns raised by the Yale Professor are legitimate “but I think it’s an early call for us in Ghana.”
The Ghana cedi has depreciated by 27% against major trading currencies since the beginning of 2014.
Despite stringent Forex rules instituted by the central bank to halt the cedi’s free fall, the situation still persists.
Some stakeholders blamed the redenomination of the cedi in 2007 as the cause of the current cedi depreciation because the country failed to sort out the fundamentals before the exercise was carried out.
Major sectors of the economy have been affected and this has forced the government to seek a bailout from the International Monetary Fund (IMF).
Mr. Ampah on Eyewitness News pointed out that the problem is not with the currency but the management of the nation’s economy.
“This is an economy where there is too much corruption, where inflation is not stable…our budget deficit is in the double digits, an economy
where our total debt portfolio is high,” he noted.
According to him, an economy with these negative factors is bound to have a telling effect on the currency.
He was highly convinced that if these negative factors are corrected, “we will not have a Cedi that is depreciating.”
He counselled the government not to hurriedly “call off” the value of the Cedi but key stakeholders must encourage the government “to bring the country back on track.”
By: Efua Idan Osam/citifmonline.com/Ghana