Gabby Otchere Darko, a key member of the ruling New Patriotic Party (NPP), has stated that while the local currency is currently struggling, it is nowhere near what it was under former President John Dramani Mahama in 2014.
“There was a time that government had to come out and announce the cedi had collapsed not by 40 percent under a year but by 23 percent!” remarked the former Executive Director of the Danquah Institute in a tweet on Wednesday, March 2. The President was John Mahama, the Executive Secretary was Raymond Atuguba, and there was no COVID. The cedi is in trouble, but not to the extent that it was in 2014.”
Meanwhile, Lord Mensah, an Associate Professor at the University of Ghana Business School (UGBS), has urged the government to immediately implement steps to strengthen the cedi against major trading currencies, particularly the dollar.
This comes after Bloomberg named the cedi the worst-performing currency among Africa’s major currencies.
“There will be hope, but only within the next five years.” The dynamics will be that whenever we expect the dollar influx from the world bank to stabilize the cedi, the cedi will begin to rise in tandem with the dollar. However, the long-term trend will continue to be higher. So, I’ll tell you, there won’t be any hope in the long run, but in the short run, we’ll see that type of up and down stream inside the cedi-dollar relationship,” he told Alfred Ocansey on TV3’s Business Focus on Monday, February 28.
Between January 1, 2022, and February 25, 2022, Bloomberg forecasted an 8.86 percent depreciation of the local currency against the dollar.
The Zambian kwacha, which has lost 6.02 percent of its value, is next.
The Ghana cedi was voted the best performing currency in the world versus the US dollar by an international media and research body in 2020.
Ghana’s and Zambia’s economies have been struggling with budgetary problems, and their mounting debts have caused investors to be concerned about their economic prospects.
While Zambia agreed to a $1.4 billion bailout from the International Monetary Fund in December 2021 for a vital three-year debt restructuring program, Ghana is insistent about returning to the Bretton Woods organization for a similar program to restore investor confidence.
Crude oil has been trading above $100 per barrel, but the commodity’s foreign inflows have done nothing to support the cedi’s stability.
The World Bank’s five-year $4.5 billion Country Partnership Framework, on the other hand, is projected to inject some dollars into the economy and support the cedi’s value.
Bloomberg lists the Gambian dalasi, New Sudanese pound, and Ethiopian birr as African currencies with the “Worst Spot Returns.”
The Kwanza of Angola, the Namibian dollar, and the Rand of South Africa, on the other hand, are among the African currencies with the “Best Spot Returns.”
