Minister for Information, Kojo Oppong Nkrumah, has simplified the causes for the depreciation of the cedi against foreign currencies, particularly the US Dollar.
Speaking in an interview on Peace FM's morning show "Kokrokoo", the Information Minister noted that one of the reasons for the cedi losing its strength against some major trading currencies is excessive borrowing.
He explained that the government borrowed so much to cushion Ghanaians during the COVID-19 pandemic and this is a contributory factor to the country being downgraded.
"Frankly, the dollars coming into the country is not enough because they have downgraded us. We have been downgraded because we have borrowed a lot during the COVID time and our debt is high. We have been downgraded because at the same time that we have borrowed, the consequences of the Russian/Ukraine war on the projections on currency doesn't help us . . . So, the downgrade has made dollar that is supposed to come into the country is not adequate," he said.
The Minister emphasized that "our debt has gone up. If you check our current debt as a country, 104 percent of GDP meaning should those we owe come today to claim their monies, even if we gather everything we have worked for throughout the year, it still won't be enough to pay up".
He also stressed that the trade of dollar in Ghana is also a major contributory factor to the devaluation of the cedi.
"Our measures in the country regarding the sale of dollar is weak. It's very weak and porous. It's just recently that we have asked the Bank of Ghana to deal with the situation."
He further echoed President Nana Addo's comments during his nation address on Sunday, October 30, 2022 on why the cedi keeps falling.
The President cautioned the populace against speculations that individuals or investors who have their monies at the various financial institutions are going to lose their investments.
The President assured Ghanaians that "no individual or institutional investor, including pension funds, in Government treasury bills or instruments will lose their money, as a result of our ongoing IMF negotiations. There will be no “haircuts”, so I urge all of you to ignore the false rumours, just as, in the banking sector clean-up, Government ensured that the 4.6 million depositors affected by the exercise did not lose their deposits".
The Minister also reiterated that the speculations do not help in strengthening the country's currency.
These notwithstanding, Hon. Kojo Oppong Nkrumah strongly believed the government will resolve the currency volatility.
Regrading measures the government is taking to bring relief to Ghanaians, he stated that the IMF bailout will reduce the country's "debt from an 104 of GDP down to 55% of GDP between now and 2028".
Source: Ameyaw Adu Gyamfi/Peacefmonline.com/Ghana
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