Dr Thompson said in an interview with Citi TV that the government must cut down on expenditure to save the currency which has depreciated against major trading currencies.
Ghanaian economist, Dr Nii Moi Thompson wants the government to freeze public sector recruitment to arrest Cedi depreciation
A Ghanaian economist Dr. Nii Moi Thompson has said that the government must halt public sector recruitment in order to stop the rapid depreciation of the cedi.
“If government wants to restrain this runaway depreciation thing, the first line of action will be to cut government spending. Freeze hiring across the board.”
Using the United States of America as an example, Dr. Thompson said, “this is what is done in other parts of the world. During the last financial crisis, there are cities in the US that actually sold their city halls to private businesses because they could no longer afford to do that and then they rented from them.”
“Whenever you run into a crisis, you are supposed to reprioritize your spending but here we are spending as if we have a bottomless pit of money,” he added.
He complained that the state was “putting so many people on government payroll who shouldn’t be there.”
He cited the creation of new districts as an example. He described the creation of 44 new districts and six new regions as “non-productive expeditions.”
“The role of government spending; excessive and reckless government spending is perhaps one of the most important of all the factors [affecting the cedi].”
The cedi has seen over 12 percent depreciation this year.
Meanwhile, the Finance Minister, Ken Ofori-Atta, said the free fall of the cedi against major foreign currencies especially the dollar, will be curtailed in the coming weeks.
He said the government expects some fresh injection of capital such as the $750 million Standard Bank bridge facility to deal with the challenges the cedi is currently facing.
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