- September 26, 2022
- Posted by: Amos Ekow Coffie
- Categories: Banking and Finance, Economics
Director of Research at the Institute of Economic Affairs (IEA) Dr John Kwakye has said prudent economic management is what will strengthen the Cedi.
According to him, the Cedi’s savior lies in Ghana’s own policies, and leveraging its own resources and capacities.
“Our saviour doesn’t lie with reparations or international economic order as the President seems to be drawing attention to lately.
“Our saviour lies in our own policies, leveraging our own resources and capacities. We can have a strong currency if only we manage our economy well. Why should the CFA be stronger than the cedi when the CFA countries are none more developed than Ghana?” he stated.
He added “The whole of Ghana seems to be waiting for the presumed saviour IMF that has not been able to save us on 16 previous occasions. Incredible!”
Earlier he indicated that another re-denomination of Ghana’s currency, the Cedi, is about to happen following the rising rate of inflation and also the depreciation against the Dollar.
Unless the managers of the economy rein in inflation and depreciation, Ghanaians should expect another re-denomination, he intimated.
The August inflation has reached 33.9 percent. This is a 2.2 percent increase in the July figure of 31.7 percent.
Dr Kwakye tweeted “Phasing out 1 and 2 cedi notes from the economy as planned by BoG, will not only put pressure on the 5 cedi notes, but will also further fuel inflation.
“If we don’t rein in inflation and depreciation, it won’t be too long before we undertake another redenomination.”
In July 2007, the Cedi (¢) was redenominated to the Ghana Cedi (GH¢), such that ten thousand Cedis was now equivalent to one Ghana Cedi.
The re-denomination did not affect the intrinsic value of the currency – “the value will be the same”.
Two of the reasons given by the Central Bank for the re-denomination were the increasing difficulty in maintaining accounting and statistical records; and problems with accounting and data processing software.