Managing Editor of the Insight newspaper, Kwesi Pratt Jnr. has predicted that the cedi will start depreciating again, reaching Gh¢8 per dollar in the next 4 to 5 months, in spite of the $800 million dollars Euro-bond injected into the economy.
He explained that over the last 36 years, anytime the cedi depreciates, successive governments had used the same method of borrowing to shore up the local currency, culminating in the stability of the cedi for a brief period, mostly 5 months; then it begins to depreciate again.
Thus, the $800 million dollar Euro-bond that the Finance Minister, Ken Ofori-Atta recently negotiated, is "not something new".
Contributing to Radio Gold's 'Alhaji and Alhaji' programme, Kwesi Pratt was of the firm belief that measures being implemented by the Akufo-Addo government to solve the depreciation of the cedi is cosmetic.
"I will not be surprised even in the matter of 2 to 3 weeks, the cedi stabilizes around 4.8 or 4.9 to 5 to a dollar; it is going to happen, no doubt, in the next 3 to 4 weeks. But mark it, in 4 to 5 months time, the cedi will ferociously start depreciating and by the time we wake up, the cedi will be heading towards Gh¢8 to a dollar very soon," he forewarned.
He reiterated that the government will definitely pay back the loan which was used to stabilize the cedi with interest, and the condition of the economy will be worse.
"Your cedi is not doing well, all you do is borrow and pump into the economy to get the appearance of stability. Won't you be paying the monies you borrow back? When you begin to take $800 million dollars out of your economy to pay for the money you are using to stabilize the cedi, what will happen to the cedi again?" he quizzed.
He therefore opined that "if stabilizing the cedi by injecting foreign exchange into the economy is worth celebrating, we should have started our parties 36 years ago. I recall during the days of late Prof. Mills, when Dr. Duffuor was the Finance Minister, the same method was used and nobody organised any party."
"....as we are foolishly announcing to the currencies speculators that we are going to pump $800 million into the economy to stabilize the cedi . . . they are zooming in on us like flies and in a maximum of 4 months, currencies speculators will scoop all the $800 million dollars out of the Ghanaian economy because they are always watching to see where it is cheaper to buy foreign Currencies to maximize their profits . . . all these Mallams and Alhajis who are the Sheikhs of currencies speculations will become fabulously rich and the cedi will start to depreciate again," he added.
He therefore described as a complete 'waste of time and resources', the $800 million Euro bond capital injection into the economy by the Finance Minister in an attempt to stabilize the cedi; emphasizing that such a measure will not work.
The government, last week, raised $3 billion from international financial institutions through a three-tranched Eurobond which attracted more bids than the country asked for.
At the close of a roadshow in London, the appetite for the 2019 sovereign bond had swelled, resulting in orders totaling $21 billion – about seven times more than the amount needed.
The government delegation, led by the Minister of Finance, Mr Ken Ofori-Atta, however, accepted only $3 billion, in consonance with the amount budgeted for and approved in the 2019 Budget Statement and Economic Policy of the government.
Source: Daniel Adu Darko/Peacefmonline.com/[email protected]
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Nkomhyefuo a wo hye nkom se kro ngu no, se egu a wo ti mu bi. All those hoping for the depreciation of the Cedi to score political points should not that they are personally going to encounter depreciation and depression in their lives whilst the Cedi stands strong 💪
Please, let's stick to the issues and stop making it about Kwasi Pratt. He does not have to say this. Our economic managers should know this and if they don't, too bad. The taste to consume can be created by those managing the economic forces - structural issue. As the taste for consuming a particular commodity heightens, there will be more demand for that particular commodity - again structural + psychological. The commodity gets consumed and there is no more, now the consumer cannot quench their thirst, therefore, they will go to all lengths to find the commodity. As this demand is very high, the propensity to put an even higher value on the commodity with a shortfall is greater. That is what will be happening in the short to medium term. How do we curtail this? The government which is the biggest spender should stop quoting in dollars. The trading in dollars in the country has always been illegal so why is it allowed in the full glare of everyone? Or is it the fear of losing the next election? Why is it that there are so many forex bureaus in the country? They encourage and have taken hold of speculative buying but not the banks and the post office. Singapore, Malaysia, and even India will not allow it so why Ghana? In the UK, You are not allowed to change money just anywhere unless around the tourist areas like Oxford Street, Russel Square, Convent Garden and the rest. It is only a few areas that one can get even Euros at cash machines. In Ghana, however, even backstreet hotels are taking dollars. Boutiques are glaringly quoting in dollars. Why? and there is no political will to check it? We don't need any chew and pour finance and economics gurus to head our economic ministry. Indeed one does not have to hold an economics degree to be a minister in that ministry because when it gets to that level, it is not what one has "chewed" that is important.
KWESI ECONOMICS IS NOT YOUR CUP OF TEA. WE KNOW AT SCHOOL THAT YOU VOMIT WHEN IT COMES TO ECONOMICS. HOW DO YOU CLAIM TO BE AN ECONOMIST NOW. PLEASE SILENT IS WISDOM SINCE IT HIDES IGNORANCE.
Yooo. Thank u Mr Pratt but remember if the cedi did not go GHC8.00 in 5 months we shall hoot at u Mr prophet of doom. Ghana is for all of us if good people like u will enjoyed it more. Never forget what u have promised us we are waiting to see.
You want to cause panic buying of dollar under Akufo Addo.....God will not allow it!....unpatriotic Kwesi Pratt.....keep pratting on....
What Kwesi is saying is good. When you pump borrowed money into your economy to support your currency, it becomes malignant after a time. The money will not be in the system forever and the time that we finish misspending it the cedi will start galloping again this time ferociously. Please, this is sixth form economics.
I can't understand why this guy is still breathing air in Ghana! sometimes Nigerians are heroes and Ghanaians are cowards! this thing with those manyamanya things in his mouth wouldn't survive a minute in Nigeria, of all the faults of Nigerians they love their country more than anything and can't contain such an unpatriotic and an enemy and a us*eless entity like this man who thinks he can use the country to survive at his old age of 70 still playing the f00*00l.His car should have been smashed by now he doesn't deserve to live to talk r*ot.
Nana Addo will not sponsor your children to further their education in overseas as somebody did so you can say whatever you want.
that's what u wish for gh prophet of doom but your propaganda dooms day prophesy will fail shame on u hatred for NPP will make u insane
This same guy predicted NDC win in 2016 due unprecedented road infrastructure made under mahama, today people are dying from road accidents due to bad roads. Ghana people are becoming gullible, anywhere there is money they will do anything to get in. HYPOCRITE PRATT