How long the $2 billion the government expects to invest in the economy can stop the local currency, the cedi, from sinking further is a concern that Dr. John Kwakye, the director of research at the Institute of Economic Research (IEA), has raised.
He claims that while putting in more dollars helps maintain the cedi, much more work is necessary to prevent further devaluation.
According to him, the economy will inevitably keep fluctuating until its structural problems are fixed.
Speaking on TV3’s Ghana Tonight show on Tuesday, August 23, Dr Kwakye said, “The $ 2 billion can make a difference but for how long? Unless you address the structural problems, the fact that we don’t earn foreign exchange on our own…Until we address the underlying structural problem, we can stabilize the Cedi for a while but for how long.”
Recall that on August 23, 2022, Information Minister Kojo Oppong-Nkrumah announced that the government intended to inject $2 billion into the economy.
Kojo Oppong-Nkrumah claims that the Bank of Ghana would get the 750 million dollars from Afremix Bank that was anticipated to happen this week, in addition to an additional $1.3 billion from the syndicated loan for cocoa.
The value of the cedi has regularly decreased against major trading currencies since the start of this year, especially the US dollar.
By July 2022, the cedi had lost more than 20% of its value.
The local currency is now selling for more than GH10.00 to one US dollar on the exchange rate market.
