The Director of Business Operations at Dalex Finance, Joe Jackson, has called upon the government to exercise fiscal discipline in the run-up to the December 7 elections to stem the further depreciation of the Cedi.

During an appearance on the Citi Breakfast Show on Wednesday, May 15, Joe Jackson emphasized the importance of avoiding a budget deficit, which he argued would exacerbate the challenges faced by the struggling Cedi and the Ghanaian economy.

He stressed the need for the government to adhere to its budgetary commitments and reduce spending, cautioning against exceeding promised expenditures, especially during an election year.

“What the government needs to do at this moment is to be fiscally disciplined and spend within its budget. The government must cut down on its spending. Make sure that you don’t spend more than you promised in this election year.

“Remember, people like Bloomberg and others do not see that this government can spend within its budget,” Joe Jackson added.

Joe Jackson attributed the current free fall of the Cedi against major trading currencies to the unplanned injection of Dollars into the economy after Ghana's expulsion from the international market.

He pointed out that the deficit financing had contributed significantly to the currency's depreciation, highlighting it as a consequence of Ghana's expulsion from the international market.

“It [The Cedi depreciation] is the lapse effect after we fell out of the international market. If we had not pumped that much money into the economy, we would not be facing this situation. The major reason is that when we pumped in deficit financing, this is the effect we are now experiencing.”

The year-to-date loss on the Cedi currently stands at about 14 percent, with the Dollar trading at GH¢14.90 on the forex market, a significant increase from the GH¢10.97 recorded for the same period in May 2023.

According to Bloomberg reports, the Cedi's depreciation has been worsened by a decline in cocoa earnings due to poor weather conditions and the swollen shoot disease, leading to a $500 million drop in exports in January and February 2024.

Bloomberg analysts anticipate a further weakening of the Cedi due to elevated risks associated with election-year funding and stalled debt deals.

Contrary to Bloomberg's projections, Fitch forecasts that the Cedi will end 2024 at GH¢12.25 to a dollar.