Monday, 8 January 2018

Arrest the ‘free-fall’ of cedi now - traders tell gov’t

Adnan Adams Mohammed

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Business owners and traders are calling on the government to immediately put in place intervention to halt the ‘free-fall’ of the local currency against the international trading currencies, especially the U.S dollar.

The cedi, since the later part of last year, has been falling, after it remained stabilized for some months within the middle part of last year.

Currently, a dollar is changing at almost GHC4.6 on the market.

Dr. Joseph Obeng, President of the Ghana Union of Traders Association has appealed to the government to stabilize the local currency.

Traders lose millions of cedis when the dollar keeps appreciating against the local currency, he said,  adding that, prices of goods automatically shoot up when the dollar keeps gaining more strength over the cedi.

Dr. Obeng in an interview noted that, traders are uncomfortable when prices of goods increase but have no option especially when they are losing millions of cedis.

The call on government comes at a time the Economic Intelligence Unit has also predicted GHC6 to US$1 by end of 2020.

This has generated a number of concerns, with the government showing dislike for the latest predictions.

However, financial analyst, Sammy Ampah, has urged government to pay critical attention to the latest projections by EIU.

According to Mr Ampah, the projection should send a clear signal to the managers of the economy to implement stringent policies that will arrest the local currency from depreciating.

The EIU said their prediction is based on the tighter monetary policy expected in the US from the latter part of this year into next year and the renewal of political uncertainties associated with Ghana’s 2020 elections, as the basis for the prediction.

But, Mr Ampah believes government can reverse the trend only if it invests in the real sectors of the economy.

He said such reports are guides for the entities involved to plan well.

“They (government) need to look at being fiscally disciplined that we do not have those budget overruns that we used to have and government should manage the expectations of the people that they do not overspend.

“Government should look at how they can invest in the real sector to grow the economy because it seems all the programmes that they are investing in are more into the social side,” he added

Further to their 2018 expectations, Dr Obeng urged government to quickly put on hold operations of the the Common External Tariff (CET), in Ghana since traders are currently facing a lot of challenges.

“It shouldn’t be difficult for a government to say that I will defer because of the problems that my country is facing so that we can do it another time. Government must listen the cry of its people if the CET is not helping”, he indicated.

He said some of the tariffs are unbearable and therefore a quick look at it will be of great help.

Dr. Obeng said the CET is a good move since it is one of the main instruments that the West African regional body ECOWAS can use to foster regional integration but added that some of its tariffs must be given a second look.

The Common External Tariff is one of the instruments for harmonizing ECOWAS Member States and strengthening its Common Market. Article 3 of the ECOWAS Revised Treaty defines the aims of the community as promoting “co-operation and integration, leading to the establishment of an economic union in West Africa.

The law is composed of four tariff rates of custom duty. They are basic raw materials and capital goods, 5% with a tariff line of 2146; Intermediate goods, 10% with a tariff line of 1373; Final consumer goods, 20% with a tariff line of 2165; and specific goods for economic development with a tariff line of 130.