A Ghanaian social commentator, Emmanuel Quayson has said that the current state of the cedi all but tells the current government is weak.
In a lengthy post in reaction to the formation of an FX committee to find lasting solutions to the incessant depreciation of the cedi, he wrote:
“The mark of every good governance is the strength of it’s purchasing power (money), the opposite is true. Just as the exams results of a school shows the quality of tutors, the same way the strength of your currency shows the quality of government in place or otherwise. When your currency is strong, you can choose to relocate to another country with a weaker currency and establish a network to spend your currency of origin in that country. You can engage in commerce and make great dividends. That is obviously the strategy most foreigners are using in Ghana. The Indians, Lebanese, Americans, Britons, Syrians, Chinese etc are doing in Ghana.
A country that has a very strong currency attracts quality labour from low class countries who come and make money with their skills. In doing that they help develop the countries of others. Don’t be surprised countries like UK, USA, Germany, Singapore, Japan, China etc are always on top because they have strong currencies and they have expatriates from other countries working for them to improve their economies. Whereas weaker countries have their resources being milked by the stronger ones, the stronger ones have their economies strengthened by the work force of the weaker economies.
The once most educated president in the world presided over the worst currency in the world (Robert Mugabe of Zimbabwe) and one of the most well acclaimed Economist of our time in the person of Dr. Bawumia under NPP government, has delivered to Ghanaians the worst performance of the cedi in Ghana’s development agenda so far. This tells you how God works or how economic management is not about qualifications or education, it takes understanding and the steps in the right direction.
There is nothing wrong in being a copy cat. What has worked for other developed countries can work for us too. Let’s copy their ways of strengthening their currencies. Self dependence is the key to salvage any nation’s currency. Produce, buy, sell and consume your own consumer and capital goods and make your private sector an engine of growth. Empower private business people to excel because they keep money in circulation within your country. This controls inflation and boost local investments. A deliberate effort must be made by government to establish manufacturing companies who manufacture secondary products from your primary produce.
Imports must be less but exports must be high to attract foreign exchange. Reduce exportation of primary produce but export more secondary produce etc. Buying and selling is not the way to develop a country, neither is service. Not to say they are not important because they are intermediaries or middle men. What develops a country is industrialisation, export of secondary produce and consumption of home made products. This is very simple. A committee is not needed to diagnose this, but the question is how do we achieve this? This is a question the government must answer.
It all begins with the attitude of the people and posture of government in allowing the private sector to thrive not foreigners but the citizens of the country. I cannot forget corruption. Corruption is a number one killer of a country’s currency. The amount of money lost through corruption in Ghana can be used to open several factories that will employ more people. Unemployment is also another cause of acweak currency. You don’t suppress your private sector and expect your currency to be favourable to you. Check the records of all Socialist states if their currencies are something to write home about?
Should we politicise this? This is an open truth. The cedi has not only abysmally depreciated but it is frustrated. Have you seen a frustrated currency before? The frustration of the business community tells you that your currency is equally frustrated. To an extent a committee has been set up to investigate why the Cedi keeps on falling. What is the purpose of the economic management team? This is what happens when you think you know too much and no one can teach you. What happened to the exposition of the weak fundamental theory? Why hasn’t the weak fundamentals being corrected as of today but we need a committee.
A Committee to do what? Drink tea, sit in air conditions and pay themselves fat allowances? We all know where this is heading towards. The committee will be a fruitless one. Are the members of the committee not all NPP members? Let’s get serious as a country. This committee undermines, the vice president, the economic management team, the finance ministry and bank of Ghana. Once again Nkrumah has been proven wrong by his own people that the black man is incapable of managing his own affairs.
I think the committee has been given a wrong direction, they should rather be made to investigate why other countries are stronger. These two objectives are not the same. Other countries are doing the right things that is why their currencies are stronger. USA spends trillions of dollars every year on war but their currency is second to none. Most of their military weapons are produced in the country both by government and private organization so these trillions stay in circulation in USA.
You don’t need a sea of bald headed and grey headed old men and women to investigate why a currency is fallen if your central bank and Finance ministry is a serious institution. I think the committee must rather be formed to appraise the work force in these two institutions whether some people need to be at post or not. If you have a vice president who has touted that he can solve the Cedi crisis and it still persist or has even gotten worse, I don’t see why he must maintain his post. If you have a ministry of finance or governor of central bank yet the Cedi is ‘misbehaving’, I don’t see why they must be at post for us to spend another money on committee that we all know cannot solve the problem.”