Minority spokesperson for Finance has said the cedi’s depreciation is a sign of the failure of a government programme to ensure food sufficiency.
Cassiel Ato Forson, a former deputy Finance minister said the depreciation shows Ghana’s demand for imports is still high despite the aim of the Planting for Food and Jobs to reduce this.
Importation requires foreign currency and as businesses continually demand it, the cedi grows weak from poor demand and depreciation sets in.
With the cedi trading close to ¢5 to a dollar and more than ¢5 on the black market, all eyes appear to be on the government.
Vice-President Dr. Mahamudu Bawumia who was critical of the previous government’s handling of the currency has defended the government’s record as better than the Mahama administration.
He said the rate of depreciation has been slower than the previous six years. After close to nine months, the cedi has lost 7% of its value.
But Ato Forson who is also the NDC MP for Ajumako/Enyan/Esiam said he expects the decline to get worse in November and December when Christmas festivities trigger an increase in importations.
He has also rejected Bawumia’s explanation that the dollar has become attractive to investors because the US Federal Reserve has increased interest rates.
The MP said the Bawumia’s party, the New Patriotic Party (NPP), did not accept a similar explanation from the previous government when it said external forces had caused depreciation.
Ato Forson said two important factors that helped the NDC government manage the exchange rate was the millions of dollars that accrued to government as revenue from oil production.
He said between 2016 and 2017, government recorded almost 100% increase in dollar inflows from new oil wells.
There was also a major boost in cocoa production from 850,000 tonnes to almost a million tonnes which brought in foreign exchange to ease the pressure.
The former Deputy Finance minister explained that the balance of payment sheet can determine the cause of the depreciation.
This sheet he said shows how much government is exporting against importations.
The Planting for Food and Jobs, government’s flagship agricultural policy could have helped in increasing exports which brings in more foreign currency, he added.
The Ministry of Food and Agriculture has said the programme yielded harvest worth ¢1.2 billion in 2017 after more than 200,000 farmers cultivated 345,000 hectares.
Crops targeted under the initiative include maize, sorghum, soybeans, rice and some vegetables such as tomato, onion, chili pepper.
But the policy has been a failure, the former Deputy minister criticized.
“I am yet to see the impact of the Planting for Food and Jobs on balance of payment, whether it is reducing importation of food items like rice”
He expressed disappointment in the Vice-President for failing to apologise to Ghanaians when he addressed the cedi’s depreciation.
