Deputy Minister for Finance, Dr Stephen Amoah, says the depreciation of Ghanaian cedi is a ritual problem caused by the import-driven economy.

Speaking to the media on Wednesday, he highlighted that with importation putting demand on the dollar, cedi depreciation is a problem requiring national attention, beyond the scope of any single government.

He assured that Vice President Dr Mahamudu Bawumia if elected, will develop a long-term framework to address the cedi's depreciation.

“Cedi depreciation is a ritual problem, I agree with you. It's not because of one particular government…It's an issue that has nationalistic or that needs nationalistic attention,” Dr Amoah said.

The Deputy Finance Minister added “so far as we keep on being an importer-driven economy, we'll be having problems with the cedi because we import almost everything. But Inshallah, Alhaji Dr. Mahamudu Bawumia, next year if he comes, we're going to design a long-term framework to deal with the cedi.”

Cedi depreciation: Issue is a ritual problem; Bawumia will design a long-term framework to deal with it. - Deputy Finance Minister #ElectionHQ pic.twitter.com/XrzETrpi2u

— JoyNews (@JoyNewsOnTV) May 29, 2024

The Ghana cedi in the past month has weakened further against the US dollar and other major foreign currencies.

Although many have blamed importation, the Director of Operations at Dalex Finance, Joe Jackson disagrees stating that Ghana’s exports in the past few years have exceeded its import.

Speaking on JoyNews’ PM Express, on Thursday, he explained that the depreciation of the Ghanaian cedi can only be reined in when the country owns its exports.

According to him, despite Ghana’s exports outweighing the imports, the cedi continues to suffer because ownership of the exports has been given to foreigners, who take resources out but do not bring in any of the money.

Referring to statistics from other countries, Mr Jackson highlighted the disparity in the return of export earnings to Ghana compared to nations like Botswana and Nigeria.

“Botswana, when they export oil, 51.8% come back into the country. In Nigeria, when they export oil, 51% of the money comes back to the country. Check out Ghana. I'm telling you that the problem is the ownership. In fact, for our non-oil, it's as low as 6.5%. This is the problem.”

Mr. Jackson emphasized the need for Ghana to retain more of its export earnings within the country to stabilize the currency.

Meanwhile, on May 24, the Finance Minister, Dr Mohammed Amin Adam, assured that the Ministry of Finance is working with the Bank of Ghana to implement measures to address the depreciation of the cedi.

• Read More: Ministry of Finance, BoG working to address cedi depreciation – Amin Adam assures

These measures, he said, include fast-tracking the fiscal consolidation process through rationalizing spending and enhancing revenue mobilization; intensification of the gold-for-oil programme, and the appropriate foreign exchange interventions by the Bank of Ghana among others.

Also, on Monday, May 27, in response to regulatory concerns, the Bank of Ghana (BoG) established a task force dedicated to overseeing all foreign exchange bureaus and enforcing compliance with regulatory standards. 

The primary objective of this taskforce is to tackle the activities of illegal operators within the foreign exchange market and promote enhanced market transparency. 

• Read More: Cedi depreciation: BoG forms taskforce to combat illegal forex market operators

By closely monitoring the operations of these bureaus, the BoG aims to mitigate unauthorised practices and foster a more regulated and transparent environment within the foreign exchange sector.