Participants in the Graphic Business/Stanbic Bank have questioned the unstable exchange rate albeit several interventions by the central bank.
They bemoaned the fact that the various interventions were not yielding the expected results.
One of the participants in the Graphic Business/Stanbic Breakfast meeting, Mr Henry Bruce, queried the central bank on why there had not been a sustainable solution to the unstable exchange rate over the years.
“I am happy that the Research Department of the Central Bank is here. They should answer why from 1971 up till today, arresting and praying for the cedi and pumping more money have not stabilised the cedi,” he said.
Mr Bruce spoke during the open discussion segment of the Graphic Business/ Stanbic Bank breakfast meeting in Accra on April 23.
The event was on the theme: “Achieving sustainable Exchange Rate Stability: Our Options.”
Regulate black market forex operations
A Professor at the Institute of Statistical, Social and Economic Research (ISSER) and panellist at the forum, Professor Peter Quartey, suggested that the operations of forex black market agents be regulated, as a move to ensure a sustainable exchange rate.
He said it was important to discuss their operations because those operators worked with huge sums of foreign currency which they transported in and out of the county on a daily basis.
He noted that their activities largely affected the exchange rate.
He therefore called on the Bank of Ghana to iron out ways of regulating the forex black market operations.
“Are we going to regulate them? Maybe we can register them; give them numbers, licences, tags and then we know how much they take in and out of our country,” he said.
He also stated that to ensure a sustainable exchange rate regime, there was the need to produce and develop taste for made-in-Ghana goods.
“Buying made in Ghana goods but it is not just about that. Our producers should also live up to expectations. Our goods should be up to international standards and user friendly for local and international demand.”
This, he said, can boost and expand our export base and improve the real sector economy.”
“We need an expanded export base and a reduced import regime. Let’s expand traditional exports and even the oil revenue. We need to channel some of these funds into the real sector,” he said.
Sustainable exchange rate regime
For a country’s exchange rate regime to be sustainable, Prof. Quartey said, its “real exchange rate must not deviate significantly from the equilibrium exchange rate.”
He explained that if there was no intervention and demand and supply forces determine exchange rates; and also if the rate does not witness any significant deviation, then sustainable exchange rate regime is attainable.
He stated that cedi depreciation started in 1992 and the trend had been consistent till date. This he attributed to the weak status of the cedi.
He therefore called for collaborative efforts to ensure stability of the cedi.
Low productivity level
He also noted that the level of productivity in the country was very low.
He said that generally, employers faced a major problem of receiving low yields from their hired or employed human resources.
He observed that without supervision, employers did not gain productivity from their employees.