A former Deputy Minister of Finance with the Mahama administration, Kweku Ricketts-Hagan, has blamed the Akufo-Addo government for the fast depreciation of the cedi against some major trading currencies.
Mr. Ricketts-Hagan contends the economy is suffering from the New Patriotic Party’s scathing assessment when it was in opposition ahead of the 2016 elections.
This has created the impression of an increased risk of doing business in Ghana, which inevitably affected the value of the cedi, he argued.
President Nana Akufo-Addo’s maiden State of the Nation address also painted a bleak picture of the country’s economic standing, as he highlighted unstable economic indicators, increasing debt and missed targets under the IMF programme.
But in a Citi News interview, Mr. Ricketts-Hagan urged government to stop speaking ill of the economy and scaring investors.
“The foreign exchange market does a lot of speculation therefore if you are talking down your economy then what you are doing is that, you are making the investors in our economy panic because if people don’t have confidence in your economy as it is being portrayed by you yourselves as a government then people who have invested here will begin to take their investment out.”
“By them taking their money in dollars and liquidating whatever assets they have here, they will use the cedis they receive here to buy dollars and repatriate them so it is indeed a factor,” he explained.
He also cautioned that this rhetoric fed negatively into the currency market and the credit ratings markets.
“If you are talking down your economy, you have to be careful, and when we do it just to score partisan points by saying that previous government has done badly with the economy, you are not doing the country any favour… Recently you have heard the likes of Fitch thinking of possibly downgrading Ghana’s economy. These are all as a result of talking down the economy.”
Performance of cedi so far in 2017
The cedi commenced 2017 at GHc 4.2 on the interbank foreign exchange market.
Figures available to Citi Business News from the Bank of Ghana show that the cedi has depreciated by about 5.4 percent between January and February of this year alone on the interbank forex exchange market, and as much as 6.72 percent in the same period across forex bureaus in the country.
In the same period in 2016, the cedi performed better in forex bureaus across the country depreciating by only 2.5 percent.
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