Governor of the Bank of Ghana, Dr. Johnson P. Asiama, has cautioned that Ghana’s 42% year-to-date cedi appreciation, though historic, faces serious threats that could reverse recent gains if not carefully managed.
Speaking at a high-level financial forum in Accra, Dr. Asiama pointed to three major structural challenges confronting the stability of the local currency: commodity dependence, persistent dollarization, and limited domestic reinvestment of export proceeds.
He acknowledged that the current $4.14 billion trade surplus and $11.1 billion in gross international reserves provide a strong buffer for the cedi, but warned that this strength may be temporary unless strategic reforms are implemented.
“While gold prices trading above $3,200 per ounce have boosted our revenues, we remain highly exposed to global price volatility. A sudden dip in commodity prices could quickly erode our surplus,” Asiama explained.
He also highlighted the seasonal import surges, especially in energy and capital goods, which often occur in the second half of the year and place additional pressure on Ghana’s foreign exchange reserves.
Another pressing issue, according to the Governor, is the growing violation of legal tender laws. He criticized sectors such as real estate, private education, and luxury retail for continuing to price goods and services in US dollars, in defiance of national regulations.
“Dollarization is distorting our monetary framework. It weakens policy effectiveness and contributes to instability,” Asiama warned.
He further lamented that a significant share of export earnings remains offshore, instead of being reinvested into the domestic economy. This, he said, limits access to credit for small and medium enterprises (SMEs), which are critical to long-term economic growth.
The Governor acknowledged the difficult balancing act the central bank faces—maintaining a strong cedi to tame inflation without undermining export competitiveness or choking private sector credit.
“Overtightening liquidity could harm growth, but inaction risks inflation and instability,” he noted.
Dr. Asiama concluded with a strong call for collective national responsibility, urging businesses to:
Abandon pricing in foreign currencies
Repatriate export earnings
Cooperate with regulators to sustain macroeconomic gains
His remarks align with President John Dramani Mahama’s broader economic stabilization agenda under the National Democratic Congress (NDC) government, which has focused heavily on fiscal discipline, structural reform, and institutional accountability.
Post a Comment