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Install a Currency Board to save depreciating Cedi –  Prof. Hanke to Ghana govt

Professor of Applied Economics at Johns Hopkins University, Steve Hanke, has advised the government of Ghana, as a matter of urgency, to set up a currency board to help manage the cedi’s fall in value.

Professor Steve Hanke, in a series of tweets on Tuesday, October 12, 2022, explained that a Currency Board will help with the appreciation of the Ghana Cedi, which has been in free fall against major trading currencies since the beginning of January 2022.

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He revealed that the Ghanaian Cedi has depreciated against the USD by 41.64% since January 2022, “which is why Ghana takes the 5th place in this week’s Hanke’s Currency Watch list.”

According to the Bank of Ghana, as of September 30, 2022, the Ghana Cedi had depreciated by 37.5% to the United States Dollar.

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Under the same period of review, the Cedi had also depreciated by 24.1% and 27.5% against the Pound and Euro respectively.

Per information from forex bureaus in the country, a dollar is selling a little above ¢11.62 as of October 13, 2022.

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The concerning value of the local currency is not the only issue Professor Hanke has opposing reports on.

He also contests information provided by the Ghana Statistical Service (GSS) which indicates that as of September, the country’s inflation rate stood at 37.2%.

“Today, I measure Ghana’s inflation at a stunning 89%/yr,” he wrote.

Meanwhile, Professor Steve Hanke remains unwavering in his assertion that the economic programme Ghana is seeking from the International Monetary Fund (IMF) will not resolve its numerous economic challenges.

Ghana’s debt stock is on the rise, as well as its inflation.

The October 2022 Bank of Ghana (BoG) Summary of Economic and Financial Data has revealed that Ghana’s public debt stock went from GH¢9 billion ¢402.4 billion as of July 2022.

According to the report, the external debt remained largely unchanged at $28 billion, equivalent to 35.8% of GDP. 

However, the domestic debt increased from ¢190.1 billion in June 2022 to ¢190.3 billion in July 2022.

Source: The Independent Ghana

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