The Cedi’s Predicament


The Ghanaian Cedi has never been so discussed on the public space as in recent times and for justifiable cause.

Purchasing power has witnessed such a steep decline that many have had to take another look at their groceries against their domestic budget.

Even the layman with limited knowledge or none at all about fiscal matters understands that their country’s national currency is under pressure from the major international convertible currency, the dollar.

What they do not understand anyway is why things are going the way they are and with disturbing fallouts in the form of unstable prices of commodities on the market.

Worsening an already worrying situation is the fact that political actors have stepped in and using the adverse state of affairs to throw dust into the eyes of the laymen.

Many theories are being thrown about as responsible for the downward plunge of our Cedi. While the situation is not peculiar to Ghana it would appear that local traders are taking undue advantage of the situation to add salt to injury by an unending price hike as they ride on the waves.

Of course the effects of transportation fares on farm produce cannot be disputed in the subject under review. There is a case, however, that some traders are being reckless and uncaring in their management of prices their actions not in tune with the laws of demand, supply and the volatility of the markets especially, the global trend.

A few weeks ago, government decided to descend through the security agents on the black market actors who are being pointed at as being responsible for the surging exchange rates.

The clampdown was suggestive of a groping in the dark approach to the problem. We do not intend to debase the effect of the black market operatives on the value of our national currency. We do, however, hold the view that other factors play a role in the mutating situation and these must be identified scientifically and addressed forthwith.

We have often heard without verifiable evidence though that some government and bank officials patronise the black market and therefore, take part indirectly or directly in the mutating values of the cedi against the global convertible currencies.

We have heard about how some foreign organisations quickly change their cedis into dollars and transfer out of the country on daily basis, another source of pressure on the Cedi.

The foregone should be investigated and the necessary action taken to reverse the situation.

A waned confidence in the national currency accounts reasonably for the panic buying spree of the dollar in the country.  Looking forward to an IMF bailout as the only panacea to the fiscal ailment affecting the country, does not sound plausible. Having dollars pumped into the country without accompanying measures to check capital flight and causative factors for the weakening Cedi would not lead to the desired goal.

The first Gentleman must take immediate drastic measures to restore confidence in the fiscal state of the nation.

The foregone and others should be considered as a matter of exigency. Any impression of obstinacy would not be helpful at this time of our predicament which although a global ailment, is one which plays into the hands of political cynics.