Former president of the Association of Ghana Industries, Tony Oteng-Gyasi has indicated that recent pumping of about 800 million dollars into the market to arrest the depreciating cedis amounts to a wasteful venture.
In his view, it would rather be “prudent” if the government allows the currency to run its course devoid of manipulations.
Speaking at the second Media General Economic Dialogue Series in Accra Thursday, Mr. Oteng-Gyasi pointed out that policymakers should take interest in all indicators causing the cedi to depreciate.
The dialogue themed ‘The Ghana Cedi; Breaking the cycle of depreciation’, assembled other speakers well vested in the Ghanaian economy to have a discourse.
Mr. Oteng-Gyasi analysed that injecting dollar into the system as a panacea to the unstable currency is akin to “putting water in a vehicle’s leaking radiator, it’s ultimately a waste of water”.
Mr. Oteng Gyasi who is also the Founder and Managing Director of Tropical Cable and Conductor Limited stated, “putting more forex in the economy to shore up the cedi is a waste of forex”
He reiterated the need for the government to track the indexes instead of one indicator to tackle the depreciation of the cedi.
Mr. Oteng-Gyasi also wants the government to allow the cedi to depreciate at the rate of inflation. If inflation goes high and cedi appreciates, it would be counterproductive because exporters would be affected and possibly kick them out of business.
“When there is local inflation, it means the cost of production is going up. It doesn’t make sense to export again,” Mr. Tony Oteng Gyasi said.
Meanwhile, President Nana Akufo-Addo has directed the Minister of Finance Ken Ofori-Atta to investigate what is actually causing the cedi to depreciate against major currencies like the dollar.
“Mr. Speaker, the president has directed that I investigate the structural causes for the depreciation of the cedi and to propose measures to address the situation. The government and I will put a bi-partisan committee together to proceed immediately,” Mr. Ofori-Attah told Parliament on Thursday.