Mr. Francis Asante, a US-based finance lecturer and prominent member of the Movement for Change’s Strategic Forum, has analyzed the recent appreciation of the Ghanaian cedi against the US dollar, emphasizing the need for sustainable economic reforms to ensure long-term currency stability. While acknowledging the positive short-term impact of recent interventions, he cautions against complacency, arguing that these measures address only the symptoms, not the underlying causes of the cedi’s vulnerability. He contends that true currency stability can only be achieved through a fundamental restructuring of the Ghanaian economy, focusing on attracting foreign investment, modernizing agriculture, and developing the tourism sector.
Mr. Asante acknowledges the recent efforts by the current administration and the Bank of Ghana to bolster the cedi. The central bank’s injection of dollars into the foreign exchange market has provided temporary relief, slowing the pace of depreciation. Similarly, the International Monetary Fund’s (IMF) recent $370 million disbursement, part of a broader staff-level agreement, has injected confidence into the market. The government’s initiative to purchase gold through the Ghana Gold Board has also contributed to increasing foreign reserves. While these measures have had a positive impact on the cedi’s value in the short term, Mr. Asante argues that they are insufficient to guarantee long-term stability, as they fail to address the structural weaknesses that make the cedi susceptible to external shocks.
The core of Mr. Asante’s argument lies in the need for a strategic shift towards building a robust and self-reliant economy. He advocates for a move away from reliance on short-term fixes like liquidity injections and external financial support. Instead, he proposes a focus on attracting direct foreign investment to stimulate economic growth and generate sustainable sources of foreign exchange. He highlights the need for a revolution in the agricultural sector, transforming it from a subsistence-based activity to a modern, commercially viable industry capable of contributing significantly to export earnings and reducing reliance on imported food.
Furthermore, Mr. Asante emphasizes the potential of the tourism sector to contribute to economic growth and currency stability. He cites Dubai as a prime example of how strategic investment in tourism can transform a nation’s economic landscape. By developing world-class tourism infrastructure and marketing Ghana’s unique cultural and natural attractions, the country can attract substantial foreign currency inflows, strengthening the cedi and creating employment opportunities. This, he argues, requires a comprehensive approach involving investment in infrastructure, training of personnel, and effective marketing strategies.
Mr. Asante criticizes the tendency to attribute short-term currency fluctuations to specific policies or administrations. He notes that while both the current administration and the previous one, led by former Vice President Dr. Mahamudu Bawumia, have implemented policies intended to stabilize the cedi, the true measure of success lies in achieving long-term stability and resilience. He cautions against politicizing the issue and calls for a bipartisan approach to economic reform, focusing on sustainable solutions rather than short-term gains that may offer temporary respite but ultimately leave the cedi vulnerable.
In conclusion, Mr. Asante urges Ghanaian policymakers to adopt a more strategic and long-term perspective on currency management. He advocates for a shift away from reactive, short-term interventions towards proactive, sustainable reforms. These reforms should center on attracting foreign investment, modernizing the agricultural sector, and developing the tourism industry. By building a stronger, more diversified, and self-reliant economy, Ghana can create a solid foundation for long-term cedi stability, protecting it from future economic shocks and ensuring sustainable economic growth. He believes that only through such foundational changes can Ghana move beyond cyclical currency fluctuations and achieve genuine economic resilience.
