Culled from: MyJoyOnline
Ghana’s economic woes will not end, unless the local currency is allowed to depreciate to its rightful value, Chief Executive Officer (CEO) of Dalex Finance and Leasing Company, Mr Kenneth Kwamina Thompson has said.
The current value of the cedi to the United States (US) dollar, according to Mr Thompson, is far from its true value.
“The cedi will fall; it should be allowed to fall because any actions we take to stop the fall of the local currency are only short term,” he said.
“The true value of the cedi may be GHc 5 to $1,” he stated.
Efforts by the Central Bank to stem the cedi’s depreciation will not suffice rather, they will worsen the situation, he said.
Blaming the cedi’s predicament on what he called Ghana’s addiction to foreign goods, Mr Thompson warned that “any attempt to combat our addiction to foreign goods and services using restrictions and bans is doomed to fail.”
Rather, the BoG will end up creating a parallel market, and business wiH engage in all sorts of underground activities which will compound the already bad situation.
Mr Thompson was delivering a lecture organised by the Chartered Institute of Marketing, Ghana (CIMG) in Accra last Thursday.
Speaking on the topic ‘In a Volatile Economy, Fortes fortuna Adiuvat’, Mr Thompson likened Ghana’s economy to an alcoholic who is addicted to “Apio or vodka.”
Explaining the evidence of an addiction to foreign goods, the Dalex boss revealed that the cedi had between 1998 and 2006 depreciated by 309% while between 1998 and 2014 the currency had fallen by 963%.
He expressed disappointment over the fact that “whereas other countries are trying to devalue their currency to make their exports cheaper, we seem to take pride in keeping it at an artificial level which is unsustainable.”
“If the cedi falls, our exports become cheaper, so technically we can sell more and help create job opportunities for the teeming unemployed youth,” he maintained.
The market, according to him, will always win.
Mr Thompson recommended a return to some of the best economic policies taken in the past, pointing out that those simple polices worked perfectly to place Ghana on a right footing.
“There are a number of things that we did in the past that we have to look at again. We have to do import substitution, export promotion and we should give incentives to our own people to grow their businesses,” he stated.
Posts
.jpg)
