A Ghanaian Economist and consultant Dr John Kwakye has attributed the cedi’s depreciation against major foreign currencies to Ghana’s planned exit from the International Monetary Fund (IMF) programme next month.
In an interview on Citi TV, Dr Kwakye said the uncertainties among some investors have contributed to the fall of the cedi against the dollar.
He explained that some investors who are willing to bring their funds into the country are uncertain of how events will turn out after an Extended Credit Facility programme with the IMF ends in April.
This he said is causing some investors to hold back.
“Investors are thinking of how we will be able to manage the economy when the IMF is gone,” he said, adding that “the investors are getting it wrong, I don’t see why they are thinking that way, we cannot have the IMF with us forever. We should be able to graduate”
He added that the cedi’s depreciation is due to weak structural fundamentals in the country.
He further argued that even though the economic fundamentals show good indicators with growth and inflation all pointing in the right directions, the structural fundamentals which is designed to support production is weak.
The cedi has seen over 12 percent depreciation this year.
“We are an import driven economy and that is the fundamental challenge,” he stressed.
Meanwhile, a Former Director of the National Development Planning Commission, Dr. Nii Moi Thompson has said that taxes on trade-related activities also serve as a disincentive to export.
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