Cedi stability not artificial; backed by solid policies- Finance Minister
Finance Minister has said the sustained appreciation of the country’s currency, the cedi, against the major trading currencies is no fluke.
Ken Ofori Atta said a clear thought out policy to raise revenue and manage the expenditure underpinned by a solid agricultural policy intervention is responsible for the recent stability of the cedi.
Ghana’s currency had only, months ago, depreciated against the dollar and some of the international currencies, at an alarming rate.
Just last month, it was trading close to 5 cedis to a dollar, a rate that was depressing to many importers and business men as a whole.
Within weeks however, the cedi is enjoying some stability and is actually appreciating against the dollar and the pounds sterling.
At the interbank market rates, the cedi is now trading at 4.17 to a dollar and 5.2246 to a pounds sterling.
In 2014 it traded at over six cedis to a pound and inched even closer to seven cedis to a pound, the country’s worst currency performance.
Some critics have suggested the recent stability is artificial and may soon depreciate.
But speaking to Joy News’ Elton John Brobbey, the Finance Minister Ken Ofori Atta said the cedi’s rise is backed by policy and hardwork.
“The budget clearly indicated what I termed a preferential option for the poor, at the same time a private sector led growth.
“By abolishing those taxes and creating the tax relief, it created economic freedom for people to feel energised and for the entrepreneurship spirit of the Ghanaians to come up.
“With that energy we began to see a pickup in productivity. The Bank of Ghana went on to reduce the interest rate by 200 basis points and that was a good indicator of where thing are going,” he explained.
The Minister said the ability of the government to use its network and relationships to renegotiate its debt of about $2 billion cemented the fact that there is momentum building in the economy.
“There is both domestic and international confidence in what we are doing,” adding the planting for food policy in the agric sector would only consolidate the gains made thus far.
The minister cautioned against cynicism, insisting there is nothing artificial about the gains made.
“I am not sure there is any issue about artificiality in this. All we have done has been consistently tackling the variables of revenues and expenditure.
“..As we focus on the debt and it continues to come down, we should be able to sustain it, undergirded by agriculture and the one district, one factory. I think we are on the path that is irreversible and I don’t think people should be this cynical.