Dr. John Kwakye, Director of Research at the Institute of Economic Affairs (IEA), criticized the Akufo-Addo administration for depending on funds from IMF, World Bank, and other donors to stabilize the local currency. He deemed this reliance, including Eurobonds and cocoa syndicated loans, a “lazy approach.” Speaking at a briefing, he emphasized heavy dependence on foreign aid is unsustainable, urging for a shift in approach.
He anticipates that the cedi will face renewed pressure once the loans need to be repaid.
“The Governor admitted that the foreign exchange market came under some pressure, both seasonal and non-seasonal-in February and early March. He reported that in the year to March, 2024, the cedi recorded a depreciation of 6.8 percent against the dollar. He, however, stated that the cedi “continues to recover its value.” But the question is by what measure?
“Certainly, not in nominal terms because since he spoke on 25th March, the cedi has continued to depreciate, reaching nearly GHS13 to the dollar. Let us repeat right here that relying on funds from the IMF, World Bank, Eurobonds, cocoa syndicated loan, etc. to bolster the cedi, as we have been doing, is not only “a lazy man’s approach,” to say the least, but also clearly unsustainable as the pressure would be back on when the loans fall due for repayment.”
The IEA boss proposed boosting foreign exchange earnings and cutting down on import demands to stabilize the cedi.
Dr. Kwakye proposed a sustainable approach to stabilizing the cedi, emphasizing the need to boost foreign exchange earnings by maximizing the utilization and value addition of natural resources. Additionally, he advocated for reducing import dependency through domestic industrialization efforts. He highlighted the importance of maintaining fiscal and monetary discipline to achieve long-term stability in the currency.
