THE President of Groupe Nduom, Dr Papa Kwesi Nduom, has called on the government to put in the right measures to address the depreciation of the local currency, the Cedi.
To do that, Dr Nduom suggested to the government to ensure that Ghanaians consumed locally produced goods to prevent a further depreciation of the local currency.
“The fast fall of the local currency is because Ghanaians appreciate foreign goods more than investing in what is made internally,” he said in an interview with the media on July 5 in Accra.
The cedi has performed poorly against major currencies since the beginning of the year, losing about 5.3 per cent of its value to the US dollar, for instance, in the first six months of this year, compared to 3.3 per cent in the first half of last year.
It has fluctuated between GH¢4.29 in May 2017 and GH¢4.41 in May this year.
Some financial analysts have, therefore, said the economy appear to be nearing distress levels as the cedi hit a record low of GH¢4.86 to a dollar on Tuesday, July 3, due mainly to global pressures as investors continue to exit emerging market assets
Addressing the issue at the 25th anniversary launch of Gold Coast, an investment advisory subsidiary of the Groupe, Dr Nduom observed that the frequent importation of foreign products only put pressure on the cedi.
“It is simple, buy made in Ghana goods. The more you import goods, the more dollars you need. If we are sitting in this country and we say that no rice should come, no sugar should come, the pressure on the cedi will reduce,” he said.
He stated that if producers focused more on the exportation of local produce, there would be no need to worry about the rapid devaluation of the cedi.
“So if government were to decide rice coming from wherever we will now put a 50 per cent tariff. Those who are investing in rice production in Ghana, will increase production for the local market.
We will produce more rice. We might even have surplus to sell to somebody else and earn foreign currency,” the businessman/ politician said.
He added, “So for me, we can talk all we want until we produce a lot of things in this country and buy them, that problem will continue to be there.”
Focus on production
To that end, Dr Nduom suggested to the government to identify and focus on the production of additional export commodities to help boost foreign exchange earnings.
“The continuous dependence on imports at the expense of exports will continue to put enormous pressure on the local currency,” he said.
He added that a boost in cocoa production, non-traditional exports and oil production could help reverse the fall of the cedi. “Production of more export commodities to rake in more foreign exchange,'' he said.
The government has come under criticism lately for the downward slide of the cedi against the major foreign currencies. The Ghana Union of Traders Association (GUTA) has identified the cedi’s depreciation as a major challenge and wants the government to stem the situation.
The Ghana National Chamber of Commerce and Industry (GNCCI) contend that if the development continues, it will impact negatively on the operation of its members.
The opposition National Democratic Congress (NDC) has also predicted a further decline in the value of the Ghana cedi, following its recent free fall against the dollar.
It noted that the value of the local currency might drop further from the current GH¢4.83 at GH¢5.20 to a dollar by December this year. — GB