This is not funny, but I will like to know who bought diving suit for the Ghana Cedi, why is it doing this deep dive, I hope when it finally lands, it will have a safe landing and Ghanaians will heave a sigh of relief.
We are a country of interesting people, this is what a friend posted on a social media platform “some Churches are holding a compulsory prayer and fasting programme, the theme is Cedi must rise against the dollar.
“ Frankly I don’t have any problem with prayers and fasting, I will do anything for mother Ghana, but my issue is, is our Cedi the dollars coequal? Tweeaa”.
A friend who runs a Forex Bureau, rung me last night to enquire about the apparent free fall of our beloved cedi, his question was “Razak, who is running the economy, at least in the last two weeks?”
My answer was, I don’t know. As curious as I am, I asked him, why that question, because, since I have known him, anytime I see his call, all I could guess is that Braima, is coming to talk about politics, he is so passionate about politics that anytime, he hears someone say something about his party, he will quickly call me to find out if what he heard was true or not.
He said Razak I have never experience what is happening, the Cedi in my short sojourn on earth, the price changes every hour and it is scary.
Let me first issue a caveat, I am not a finance expert, an economist, or auditor, I am not a banker, I have not held the post of a cashier, nor treasurer. My mathematics is poor, you can say it is the subject I hurt most in my life, but I know one plus one is equal to two. I also know money magic and when things are not going well, when I see one.
My admonition for today is on some of the magic of money in Ghana and those who know better than me that if we continue doing what we have been doing and are still doing, trust me, the Cedi can never equal the dollar or any of our trading currencies.
But first let me tell us this story I read somewhere some years back.
It’s a slow day in little Tensleep, Wyoming. The sun is beating down, and the streets are deserted. Times are tough, everybody is in debt, and everybody lives on credit…
On this particular day, a rich tourist from back east is driving through town. He stops at the motel and lays a $100 bill on the desk saying he wants to inspect the rooms upstairs in order to pick one to spend the night.
As soon as the man walks upstairs, the owner grabs the bill and runs next door to pay his debt to the butcher.
The butcher takes the $100 and runs down the street to retire his debt to the pig farmer. The pig farmer takes the $100 and heads off to pay his bill at the supplier of feed and fuel.
The guy at the Farmer’s Co-op takes the $100 and runs to pay his debt to the local prostitute, who has also been facing hard times and has had to offer her “services” on credit.
The hooker (prostitute) rushes to the hotel and pays off her room bill with the hotel owner.
The hotel proprietor then places the $100 back on the counter so the rich traveler will not suspect anything.
At that moment the traveler comes down the stairs, picks up the $100 bill, states that the rooms are not satisfactory, pockets the money, and leaves town.
No one produced anything. No one earned anything.
However, the whole town is now out of debt and now looks to the future with a lot more optimism.
The Bank of Ghana (BoG), had in response to halting the free fall of our currency has issued certain directives, which was more of an adhoc on the moment decision rather than a long term measure to avoid what we are experiencing now.
The Bank of Ghana (BoG) has announced additional measures to shore up the cedi against the major foreign currencies.
As part of the measures, it has banned commercial banks and other financial houses from issuing cheques and cheque books on Foreign Exchange Accounts (FEA) and foreign currency accounts (FCA).
It has also directed that no bank should grant a foreign currency-denominated loan or foreign currency-linked facility to a customer who is not a foreign exchange earner.
The central bank has also prohibited offshore foreign deals by resident companies, including exporters in the country.
Again, over-the-counter cash withdrawals from foreign exchange and foreign currency accounts not exceeding US$10,000 shall only be permitted for travel purposes outside Ghana or its equivalent in convertible currency per person per travel.
First of all, what is the Legal tender in Ghana, it is the cedi and it should be the medium of exchange, the question that has not been answered over the years is, what and why do we need the dollar for, such that a short in supply or circulation means ore cedi must suffer a free fall?
We live in a country where everything we consume is imported, from cloth, toothpick, matches, slippers to consumables like paper, pen, furniture to food items like, carrot, cabbage, tomatoes, banana, plantain etc.
If we have develop the penchant of consuming everything foreign and imported, our cedi will always face the same problems, it is facing today, no matter what measure is put in place to stem the current tide.
The real cause is over dependency on foreign goods. Until that is done, this will become a visual cycle, like the power outage.