The Member of Parliament for Cape Coast South, George Kweku Ricketts-Hagan, has observed that the issues of Cedi depreciation are complex, asserting that the current managers of the economy have not fully come to understand the problems of the local currency.
He said one needs enough comprehension of the problem of the Ghanaian economy to better manage it.
“The story of the cedi is quite a complex one and I have come to believe and I don’t make this statement lightly…that the current managers of the economy actually have not fully comprehended the problems of the exchange rate.
“Therefore, the solutions that they are prescribing is actually not working because if you don’t understand what the problem is, it will be very difficult for you come up with a solution,” he said on The Key Points on Saturday, May 18.
Additionally, the former Deputy Minister for Finance under the erstwhile Mahama administration cautioned that the local currency could be trading at GHC25.00 to a dollar by the end of 2024.
According to the Cape Coast South legislator, Ghana’s economy needs a fiscal space of up to five years to turn around. This, he noted, can be achieved if the managers of the economy renegotiate the country’s external debt properly.
Moreover, he attributed the Cedi’s woes to leadership failure as far as the Economic Management Team (EMT) is concerned.
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“…in 2016 we were talking about under 4 cedis being a dollar, today we are talking about 15 cedis to USD1. Again, that clearly tells you that whatever has happened in between, we’ve had some kind of a leadership failure as far as the managing of the economy is concerned and this I drive it towards the EMT,” he noted.
Also, Mr. Ricketts-Hagan doubted whether the Vice President Dr. Mahamudu Bawumia is still the head of the EMT, because “quite recently he was doing digitalization now it looks he is campaigning and obviously dancing off-beats on the field.”
IMF bailout
Touching on the ongoing International Monetary Fund (IMF) extended credit facility programme, he underscored that the Fund’s prescriptions “will not resolve the country’s current economic woes.”
“If it happens like that, maybe we will be able to have the trust to start a better negotiation than what is on the table. Because the IMF is pushing us to do this negotiation without the IMF itself not understanding what is happening in the international capital market.
“IMF is good at helping you negotiate a multilateral and bilateral kind of a transaction. This is new. We’ve never done it before. So if we go with what IMF is telling us- negotiate and try and get some percentage cut off, that’s not what we need. We need is fiscal space to be able to build our economy.”
“The problem of our currency now and of economy, is not about how much hair cut you get, but it is actually about how much space you get within the next three to five years. So, the proper solution is to renegotiate our debt by refinancing the whole international bond market and get a fresh start.
“A fresh loan that will give us a clean slate and structure a bond that will give us a three-year zero-coupon bond and start some amortisation that will be going up,” he told Alfred Ocansey on The Key Points.
Ghana has so far received a total of US$1.2 billion out of the $3 billion “rescue loan” under the programme with efforts underway to have the third tranche injected into the economy.
