19September2014

Articles

The Free Fall Of The Cedi: Thought Of A Non -Economist

 For some time now the Ghanaian cedi has experienced a free fall and the rate of speed can be likened to the fastest man on earth now Usain Bolt.

This is not the first time we are going through record breaking of the fall of our cedi to other currencies. But Ghana as a country and Ghana as a people I doubt if we have learnt any lesson to develop strategies that will stand the test of time just like these currencies GH cedi is falling to.

 Our cedi is not falling just out of the blue, just like Usain Bolt did not just break world records. A lot of preparations and factors got him to where he is and same can be said of our cedi.

From a non-economist point of view several social factors forms part of the preparation grounds for this award winning cedi fall. It is a record that since 2009 we have contracted more loans than any period.

Did we consider the rippling effect of all the loans and grants we obtained in dollar terms, which we are to pay over a longer period? Not all the sectors we secured these loans for can generate both the principal and interest to be paid over a longer period of time in dollars.

 During the re-denomination in 2007, every effort was made to make our cedi equal to the dollar which in lay man’s terms a good intention but my questions is as a nation and people did we put the right mechanism, strategies and monitory structures in place before we ventured the equalization of the dollar during the re-denomination exercise?..

During the exercise we used to have 50 cedis, 100 cedis that became 1p, 500cedis that became 5p, 1000 cedis that became 10p etc... May the financial experts explain to us what happened to the 50 cedi denomination because after the re-denomination our least coin became 1ghp(100cedis) I want to find out, if our financial experts considered the ripple effect of the SSSS on the depreciation of our cedis against the dollar before the implementation of the policy?

The evidence is clear that, we spend 70% of the general revenues of the nation on less than 1million people in one sector of the economy. As we speak, we can part ourselves on the shoulder that we are getting value for the SSSS implementation.

 As for the waste and tax invasion in the system I can't simply phantom. Spare parts dealers, importers and smugglers have also contributed to this dollarization of our economy. We carry so many dollars to overseas for all transactions, so we buy lots of dollars here before we travel. Is it same with investors?

Do they come in here with physical cash? Why have we failed to utilize the space technology provides? Visa cards, bank transfers etc. When foreigners come here and businesses are transacted, they don't pay in hard currency, they instruct their bankers to transfer monies.

Can't we learn and do same? One area that was supposed to counter our importation bane is our export. But we all know for a fact that, we don't even export by half of the quantum we import.

 The products we even export, who controls the prices? Consider Ghana, Nigeria and South Africa, can't we do more among ourselves than to the west where we are not even at liberty to really price our goods and products? Our online stores of Ghanaian ownership all sell in dollars; wouldn't it be easy to quote them in Ghana cedis?

 The American quotes in dollars, the UK quotes in Pounds and the EU in euros. The failure by all governments except that of Nkrumah to embark on serious industrialization has caused us so much.

Then we have more industries which we have sold. If governments couldn't do it alone, what happens to genuine PPP NOT GYEEDA kind of PPP.

 Today our own gold and oil, we have not even 20% shares. Whiles elsewhere they would have used such resources to cushion their currency in such times; we have traded all we have. We have most facilities in the hospitality industries quoting prices in dollars.

 In the heat of finding how we got this far they tried to shy away from this reality. What is sad most is, many experts who are all commenting and lamenting over the cedi fall apparently eat, sleep and hold trainings in these facilities where dollars are charged.

We have schools in Ghana that charge in dollars, “Little drops of water makes a mighty ocean”. Do we have any Ghanaian school in UK or USA? But look around for international schools, with fees quoted in dollars.

 Many estate developers charge or price in dollars, some lands are sold in dollars and some house owners also rent in dollars in some locations in Ghana, Cantoments, Airport Hills, Airport Residential, East-West-North Legon etc.

 We were in this country when lecturers asked for a particular allowance in dollar equivalent, so it's our own making by and large that our Ghana cedi is running as though it is in competition with Usain Bolt.

We have sacrificed the status of the Ghana cedi for partisan political interest and we are screaming today for its depreciation.

 Government alone can't and never will win the war on the cedi depreciation if we all don't get our hands on deck to act right.

 Let's also learn to speak as high as we are crying over this season of cedi -dollar competition when the Ghana cedi performs well. God bless our home land Ghana.

By: Scofray Nana Yaw Yeboah/www.myradiogoldlive.com