The New Patriotic Party(NPP) government has offered sympathy to businesses hurting from the cedi’s depreciation but the Minority in Parliament has offered a playback of NPP criticisms in opposition saying it is coming back to haunt it.
Deputy Finance Minister, Kweku Kwarteng told Joy FM Friday, the government is working on a long-term strategy to tackle an old problem of depreciation after the Cedi reached ¢4.7 to a dollar.
But the sympathy attracted criticism from Minority spokesperson, Casseil Ato Forson, who remarked “Karma is a bitch” referring to the NPP’s criticisms of the National Democratic Congress (NDC) government over its handling of the Cedi in 2014.
Ato Forson, who was a Deputy Finance Minister under the John Mahama administration, pointed to comments made by Vice-President Dr. Mahamudu Bawumia while he was in opposition that the depreciation of the Cedi was to due to weak fundamentals of the economy.
“The lesson from history for governments is that you cannot manage the economy with propaganda. In fact, you can engage in all the propaganda you want but if the macroeconomic fundamentals are weak, the exchange rate will expose you,” Dr. Bawumia criticised in May 2012.
The Cedi was ¢1.92 to a dollar then and ended at ¢4.17 by the time the NDC lost the 2016 general elections to the NPP.
Under Nana Akufo-Addo government, the June currency report shows it is experiencing another bout of depreciation with the dollar selling for ¢4.7 from¢ 4.2 in January 2017 when the NPP government took over.
Former President John Mahama on twitter, posted a video replaying Dr. Bawumia’s criticism about weak fundamentals exposing government’s propaganda on the Cedi’s decline.
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The tweet appears to have energised the NDC into a point-scoring debate over the depreciation of the Cedi.
The Minority spokesperson on Finance, Ato Forson wondered how the cedi would be depreciating after the Finance Minister, Ken Ofori Atta, came to parliament in November 2017 to declare the government had turned the economy around within a year.
Ato Forson predicted that the depreciation could get worse by Christmas when imports drive demand for the Dollar against the Cedi.
“We have not even got to the season where we all have to be worried…we are yet to see the peak,” he told Joy FM presenter, Evans Mensah on Newsnight Thursday.
He explained, the currency stablised in 2017 because of a major increase in revenues from oil production and the $2.25bn Eurobond government issued.
But in 2018, no bond of the stature of the 2017 Eurobond has been issued although government went in for some $1bn from the money market.
“It helped Central Bank to shore up the Cedi,” he analysed.
Revenue from export commodities like cocoa is also declining, he observed. From $2,700 per metric tonnes, cocoa is now selling for $2,300, a situation he said would affect government’s expectation of at least $1.5bn from cocoa.
Ato Forson’s successor as Deputy Finance Minister, Kweku Kwarteng, said the Minority spokesperson was engaging in “unfounded speculation”.
He explained that Bawumia’s comments about weak fundamentals of the economy are “still valid” and noted these fundamentals cannot be improved overnight.
He said it will take time for government to achieve greater exports of goods that help increase the supply of Dollars and ease pressure on the Cedi.
He said government is also checking its expenditure because a widening deficit could lead to depreciation.