The recent injection of close to a billion dollars into the economy by the central bank to stabilise the failing Ghana cedi is the “most useless” and “disgraceful” use of Ghana’s hard-earned foreign exchange, economist Kwame Pianim has said.
At an economic forum held in Accra on the theme: ‘The Ghana cedi, breaking the cycle of depreciation’, Mr Pianim said such use of Ghana’s forex was pointless.
The central bank recently pumped some$800 million into the system after the cedi fell close to the $1: GHS6 rate.
Coupled with the recent issuance of a $3 billion Eurobond which was oversubscribed by six times, the cedi regained some value and traded at $1: GHS5.16 but recently fell to $1: GHS5.41.
In Mr Pianim’s view, “In 1988, we brought the two – the black market rate and the official rate together – that’s when we set up the forex bureaus to try to mobilise the dollars in the private sector and put it in the main sector.
“Now, we have a market-determined one, and the central bank sometimes has moved in with $700 million to stabilise the cedi. It is the most useless and disgraceful use of our hard-earned foreign exchange that should be used for transforming the economy.
“Instead of using that [for that purpose], you can use it for processing tomatoes so that we don’t import, for rice so that we don’t import”, he said, adding: “For a steady long-term approach, as I’ve said, we need to move to restructure the economy”.
He also said Ghanaians should learn to blame the independent Bank of Ghana for the weakness of the cedi rather than the government. “We should not blame the government for the cedi depreciation,” he said, adding: “We should blame the Governor of the Bank of Ghana because that is their job.”