A former Deputy Finance Minister under Mills administration, Fifi Kwetey says the recent appreciation of the cedi is only temporary and will depreciate again.According to him, the government’s capital injection into the economy as a means to stop the currency from depreciating, will not solve the challenges with the economic fundamentals responsible for the currency’s depreciation.
Speaking on Eyewitness News on Wednesday, the Ketu South Member of Parliament said the government took a similar action in 2018 to stabilize the currency when it was being exchanged at about GHc 4.7 to a dollar, but that stability was short-lived.
“It is like you are suffering from a serious ailment and then you are given pain reliever and over the period, the problem seems to have gone, but the problem is still there. If around September, it was pushing towards GHc5 and as a result of the coming in of the cocoa receipts, it stayed around GHc4.7, what happened? Within no time, it went beyond the GHc5 and now pushing towards GHc6 in spite of the injection that happened last year,” he said.
The value of the cedi until earlier this week had greatly reduced, sparking concerns of serious economic challenges.
At a point, it was trading at GHc 5.80 to a dollar but it began gaining strength this week after a government intervention which was actually expected to yield evident results within two weeks.
The Minority in Parliament has already discredited the development but the government has been quick to tout the achievement which it says is an indication of a stronger economy.
But Fifi Kwetey says the improvement being seen with the cedi will not last.
“This temporary injection that has taken place is basically going to have the same effect [as last year]. They did that, thinking that somehow that is going to lure the people into a certain sense of security but that security will be short-lived,” he said.
By: Sixtus Dong Ullo | citinewsroom.com | Ghana