Address cedi depreciation challenges - GUTA to govt
The Ghana cedi has witnessed one of its worst performances in many years having lost more than seven per cent of its value since the beginning of this year alone.
With fears of it worsening in the coming weeks, the development is badly affecting importers though favouring exporters on the flip side of the equation.
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But with Ghana being a net importer of many goods consumed including raw materials for industries in the country, the players in that space have sounded an alarm as to the impact on their businesses.
Consequently, the Ghana Union of Traders Association (GUTA) has appealed to the government to help address the challenges causing the cedi to depreciate in value against the major foreign currencies at a quicker pace.
The association said the quickened depreciation this year had forced the capital of members to erode by 16 per cent, a development which has led to increased cost of production.
Cause for alarm
In a release issued in Accra, the GUTA President, Dr Joseph Obeng, said the rapid depreciation of the local currency against the major trading currencies, especially the United States dollar, gave cause for alarm.
“It is taking a heavy toll on our capital and wreaking havoc on businesses in the country and also increasing financial burden on the consuming public.”
“From December 2021 to date, our capital has been depleted by about 16 per cent,” he said in a statement copied to the Daily Graphic.
“In December 2021, when the rate of the cedi to a dollar was GH¢6.4, a trader could use GH¢640,000 to buy US$100,000. Today, as the rate is about GH¢7.6 to a dollar, the same GH¢640,000 can buy only US$84,000, thereby making a loss of US$16,000, which is the 16 per cent depletion,” he said.
Impact
The GUTA President said should a trader still want to buy US$100,000, he/she would need to find additional Gh¢120,000 to top up within this short period.
“This is very serious and needs urgent solution to save, not only businesses but also the economy. It will require consented efforts by engaging all relevant stakeholders for urgent discussion and immediate solution to this menace,” Dr Obeng said.
Pace of depreciation
The concerns of GUTA come at a time when the cedi has come under intense pressure.
After ending 2021 with a year-to-date depreciation of 4.1 per cent, the cedi started this year on a wobbly note, losing grounds to the US dollar, the British pound and the euro in the first two months.
It ended February with a year-to-date loss of about 7.6 per cent to the US dollar to trade around GH¢6.7.
As of March 4, one US dollar was now worth more than GH¢7, according to Bank of Ghana (BoG) data.