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Council of State backs measures at stabilising cedi

BY: Joshua Bediako Koomson
Nana Otuo Siriboe II (right), Chairman of the Council of State, interacting with Elsie Awadzi (left), Deputy Governor of the Bank of Ghana, and Charles Adu-Boahen (middle), Minister of State, Finance. Picture: EBOW HANSON
Nana Otuo Siriboe II (right), Chairman of the Council of State, interacting with Elsie Awadzi (left), Deputy Governor of the Bank of Ghana, and Charles Adu-Boahen (middle), Minister of State, Finance. Picture: EBOW HANSON

The Council of State has given support to measures taken by the government to stabilise the cedi.

Speaking to journalists after a closed-door meeting held between the council and the Ministry of Finance in Accra last Wednesday, the Chairman of the council, Nana Otuo Siriboe II, said as the advisory body to the government, the council was concerned about the rate of depreciation of the cedi against the major foreign currencies.

The council called the meeting to receive briefing on the measures being taken to arrest the depreciation of the national currency.

Approval

“We can’t just sleep; we are the advisors of the government and so we need to be informed to enable us to give the requisite advice and submissions to the government, and that is why we are having this meeting,” the council chairman said.

“We heard what the underlying causes were and they talked about the short, medium and long-term solutions they have in mind and we approve of those measures,” he added.

Assurances

Nana Siriboe said there had been a lot of assurances that things would get better.

He said there were a lot of expectations regarding inflows of foreign exchange to shore up the country’s liquidity to enable the government and the Bank of Ghana (BoG) to pump in more dollars to help stabilise the cedi.

Remain calm

The Minister of State at the Ministry of Finance, Charles Adu-Boahen, who led the team from the ministry, called on Ghanaians to remain calm because the government was implementing measures to arrest the pace at which the cedi was losing its value against major foreign currencies.

As part of the measures, he said, the BoG was making efforts to make more hard currencies available for importers and businesses that engaged in refined products.

In addition, he said, the bank had entered into an agreement with some mining companies, as well as companies within the oil and gas sector, to buy their forex to help support BoG’s reserves.

Speculation

“The currency depreciation is due to a host of issues, but the most important one is speculation. We believe there are a lot of speculative activities that are creating some unnecessary depreciation in the currency, but we are taking steps to ensure that we can address some of the concerns.

“We believe that all the measures put in place, together with the African Export-Import Bank’s $750 million loan, followed by the Ghana Cocoa Board’s (COCOBOD’s) $1.3 billion syndicated loan facility for the 2020/2021 cocoa crop season, will help shore up the currency and stabilise it,” Mr Adu-Boahen added.

He said the impact of the measures would be felt within the shortest possible time.

“The African Export-Import Bank’s $750 million loan should be here by next week and that should begin the first step towards making sure that stabilisation occurs,” he added.

Allegation denied

The minister denied allegations by the Ghana Union of Traders Association (GUTA) that the government had deliberately caused the cedi to depreciate.

“Under what circumstance will we intentionally depreciate the currency?” he quizzed.

According to him, travelling on that path would not serve any purpose.

“Rather it will create a situation where our debt becomes more expensive, our debt-to-gross domestic product goes up and we need to find more cedis to service our debt. There are so many reasons it is not in our interest to have a weaker currency,” Mr Adu-Boahen said.