PRESIDENT AKUFO-Addo has asked Ghanaians to refrain from talking down on the Ghanaian currency, intimating, “If you allow some unidentifiable person to talk down your money, it will go down.”
“As the French would say, l’argent n’aime pas le bruit, to wit, money does not like noise, sika mpɛ dede. Where there is chaos, where there is noise, where there is unrest, you will not find money,” he said.
Speaking during a nationwide broadcast yesterday on the economy, he said the recent turbulence on the financial markets was caused by low inflows of foreign exchange, and was made worse in the last two to three weeks, in particular, by the activities of speculators and the black market.
“An anonymous two-minute audio message on a WhatsApp platform predicting a so-called haircut on government bonds sent all of us into banks and forex bureaux to dump our cedis, and, before we knew it, the cedi had depreciated further,” he posited.
“All of us can play a part in helping to strengthen the cedi by having confidence in the currency, and avoiding speculation. Let us keep our cedi as the good store of value it is,” he entreated.
Actions Taken
The President stated that some steps had been taken to restore order in the forex markets, saying, “We are already beginning to see some calm returning. We will not relent until order is completely restored.”
He disclosed that some of the actions taken included enhanced supervisory action by the Bank of Ghana (BoG) in the forex bureau markets and the black market to flush out illegal operators.
He said this would ensure that those permitted to operate legally abide by the market rules. According to him, some forex bureaus have already had their licences revoked, and added that this exercise will continue until complete order is restored in the sector.
The President again said fresh inflows of dollars are providing liquidity to the foreign exchange market, and addressing the pipeline demand.
He asserted that the central bank had also given its full commitment to the commercial banks to provide liquidity to ensure the wheels of the economy continue to run in a stabilised manner, till the IMF programme kicks in and the financing assurances expected from other partners also come in.
He said the government was also working with BoG and the oil producing and mining companies to introduce a new legal and regulatory framework to ensure that all foreign exchange earned from operations in Ghana are, initially, paid to banks domiciled in Ghana to help boost the domestic foreign exchange market, while the central bank enhances its gold purchase programme.
“I am confident that these immediate measures designed to change the structure of our balance of payment flows, sanitise the foreign exchange market to ensure that the banks and forex bureaus operate along international best practices, together with strengthened supervision, will go a long way to sanitise our foreign exchange market, and make it more resilient against external vulnerabilities going forward,” he intimated.
Imports
President Akufo-Addo also said the government had decided to review the importation of certain goods into the country as a way to stem price escalation and stabilise the economy.
The President said the government would review the standards required for imports into the country in May 2023.
According to him, the government will review the management of the country’s foreign exchange reserves, in relation to the importation of rice, poultry, vegetable oil, tooth picks, pasta, fruit juice, bottled water and ceramic tiles, and others which, with intensified government support and that of the banking sector, can be manufactured and produced in sufficient quantities in Ghana.
“Government will, in May 2023, that is six months from now, review the situation,” he stated and added, “We must, as a matter of urgent national security, reduce our dependence on imported goods, and enhance our self-reliance, as demanded by our overarching goal of creating a Ghana Beyond Aid.”
President Akufo-Addo said much as his administration believes in free trade, the government must work to ensure that the majority of goods in the country’s shops and market places are those produced and grown in Ghana.
“That is why we have to support our farmers and domestic industries, including those created under the 1 District 1 Factory initiative, to help reduce our dependence on imports, and allow us the opportunity to export more and more of our products, and guarantee a stable currency that will present a high level of predictability for citizens and the business community,” he indicated.
He noted that exports must be the nation’s mantra, asserting, “Accra, after all, hosts the headquarters of the Secretariat of the African Continental Free Trade Area.”
The President said over the course of last week, he had held several “fruitful engagements” with the Trades Union Congress and Organised Labour, the Ghana Employers’ Association, the Association of Ghana Industries, the Ghana Association of Banks, the Private Enterprise Federation, the Association of Forex Bureau Operators, the Association of Market Queens and Women, all of whom represent important stakeholders of the Ghanaian economy.
“They expressed their concerns and proposed solutions on how best to solve our problems,” he disclosed and continued, “I have been encouraged by the enthusiasm of these interest groups to help the government address these challenges, and I intend to continue these engagements with other groups.”
BY Ernest Kofi Adu