In the wake of the discussions raging over the level of depreciation of the local currency against the major foreign trading currencies, particularly the United States dollar, the Chief Executive Officer (CEO) of Dalex Finance, Mr Ken Thompson, has asked the government to allow the cedi to fall in order to reflect its true value.
“Supporting the cedi prevents the right investment decisions from being made, and also prevents us from changing our consumption habits and put our food security at risk by reducing the price of imported food and making our local food production expensive and uncompetitive,” Mr Thompson said in a statement issued on April 2 in Accra.
That, he said, damageed our agricultural sector and put the nation’s food security at risk.
“Let the cedi fall to reflect its true value to help promote local food crop farming and exports.
“Unemployment and poverty will continue to rise unless we start reducing the level of food imports and increasing local food production. If we continue to import food, one day we will lose our ability to produce food altogether and if our trading partners get upset with us, we will starve.
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“We are importing everything and producing virtually nothing. This is the same country that took cocoa, which is not indigenous to Ghana, developed it, and at a point, became the number one exporter in the world, so don’t tell me Ghanaians do not respond to economic incentives,” he said.
Impact on agric
According to him, agriculture was the silver bullet and so making agriculture attractive by providing rural areas with roads, health facilities, potable water, good schools and extension services was necessary to develop the sector.
He also emphasised the need for the provision of tax and other incentives to exporters.
“Let us provide market development, capacity building and access to finance to exporters. Just focusing on replacing the food and livestock that we import such as rice and chicken will make a huge difference to Ghana’s foreign exchange reserves and food security,” he stated.
He took the opportunity to clear the myth that blamed the fall of the cedi on Forex Bureau operators.
He said, “these operators do not have the resources to undertake the kind of speculation we mistakenly credit them with.”
He stated that the operators should rather be appreciated for making the value of the cedi even lower.
The CEO observed that the woe of the cedi was purely a structural problem that would require a long-term effort and a painful process to address.
“Instituting kneejerk measures to arrest the downward slide of the currency will fail. How can we expect to correct a structural problem without pain?” he questioned.
According to him, the country was exporting Ghana’s wealth and jobs overseas by continuing to support imports of goods and services.