- August 11, 2022
- Posted by: Amos Ekow Coffie
- Categories: Banking and Finance, Economics
The Association of Ghana Industries is warning that the perennial rapid fall of the cedi will continue until the structure of the economy is changed to prioritise industrialisation to boost exports.
According to its President, Dr. Humphrey Ayim-Dake, industry is not surprised about the current rate of the depreciation of the cedi.
Speaking to Joy Business, Dr. Ayim-Dake said government must implement tight policies targeted at promoting industry.
“The remedy that we have stated year-in-year out is to beef up the industrial sector and focus more on the export-oriented production and to avert this cyclical issue that comes year in and year out. Strategic policy interventions that we have advocated many times to address the weakened industrial base have not been taken”.
“That is why I asked a question, what is new? What is new at this time is the extent of stiffness and the extent of the depreciation [of cedi] amidst coming out of the Covid-19 and also the Russian/Ukraine war that has led to a lot of distortion in our supply chain variables”, he mentioned.
On forming a committee to address the volatility of the cedi, Furthermore, Dr. Ayim-Dake, said the Bank of Ghana has over the years done well in keeping the cedi stable, and therefore does not support a new committee.
“We are of the opinion that the Bank of Ghana that is mandated to engage in the stability of the exchange rate or price stability is an institution which has been tried and tested over the years. It has the capacity to engage in this space. So it isn’t a matter of putting together another committee to do what the BoG knows how to do best.”
“So our point is that we want practical solutions that will bring about stability in prices, since that is the mandate of the BoG. We should urge the BoG to get us remedies; not necessarily forming another bureaucratic organisation or committee to explore that opportunity”, he added.
The local currency has lost more than 28% in value to the US dollar since January 1st, 2022.
It is presently going for ¢9.02 on the retail market.