By: Franklin ASARE-DONKOH
The Director of Research at the Institute of Economic Research (IEA), Dr. John Kwakye has called on the government to immediately tackle the fundamental structural challenges facing Ghana’s economy before thinking of dollar infusion.
According to him although the announcement by Ghana’s Information Minister that a lot of dollars are coming into Ghana’s economy to strengthen the Cedi is a good idea the right things must be done first.
Dr. Kwakye speaking in an interview with the media indicated that Ghana does not earn foreign exchange on its own. This he said must be looked at.
His comments come after Information Minister Kojo Oppong Nkrumah said a lot of dollars are coming in to shore up the strength of the local currency.
Mr. Oppong Nkrumah was on record saying the US$750 million Afreximbank loan, as well as the US$1.3 billion cocoa syndicated loan that comes together like US$2 billion, will be hitting the Ghanaian economy soon.
“External factors such as the repatriation of funds have led to a cedi that has depreciated very quickly, the Bank of Ghana introduced a raft of measures to deal with the depreciation of the cedi.
“I think this morning, the President was briefed that the US$750 million that we were expecting, now all the paperwork has been completed and should hit our account by Tuesday or Wednesday.
“So, if I were you and I was holding onto dollars, I will be selling by now because there is a lot of dollar coming in from the US$750 million and then from the cocoa US$1.3 billion syndicated loan that comes together like US$2 billion hit the Ghanaian economy.
“We need to cut down on our import bills significantly. We are importing rice, chicken, fruit juices, there needs to be clarity on what we need to do to reduce the importation, and those are some of the things that are being done,” the Information Minister told Accra-based Asaase Radio on Tuesday.
Reacting to this, Dr. John Kwakye said “Every amount of dollars that comes will help in stabilizing the Cedi.
“The $ 2 billion can make a difference but for how long? Unless you address the structural problems, the fact that we don’t earn foreign exchange on our own.
“Until we address the underlying structural problem, we can stabilise the Cedi for a while but for how long.”