Reverend Dr. Samuel Worlanyo Mensah, an economist with the Center for Greater Impact Africa, has called on the Bank of Ghana (BoG) to use some strategic policies to fight against the use of foreign currencies in the country.
According to the Economist, until the Bank of Ghana takes bold steps to address the over dollarization of the economy, depreciation will continue to put pressure on the economy and consumers.
“The Bank of Ghana needs to be resilient in stabilizing the Ghana Cedi to compete with other currencies in the global market and also control the use of other currencies as the dominant medium for economic transactions. They can do that by formulating strategic policies to address the situation.”
Dr. Samuel Worlanyo Mensah
Reverend Dr. Samuel Worlanyo Mensah explained that the use of foreign currencies in transacting businesses in Ghana is hugely affecting the value of the Ghana cedi which is subsequently affecting the prices of imported goods.
The Economist said the banning of businesses from using foreign currencies is a step in the right direction. He thus said, “This is because when care is not taken, the Ghanaian currency would be made more vulnerable.”
With regards to the recent BoG Directive banning the use of foreign currency, Reverend Dr. Samuel Worlanyo urged the Central Bank to crack the whip on those who flout the directive. “Any perpetrator when caught must be sternly dealt with to deter others from still transacting business with foreign currency”. He added that, because there has not been any serious action against defaulters, the situation has been the same.
“Most of the volatilities that we experience in terms of currency fluctuations and the cedi losing value against international trading currencies are all because we encourage the use of foreign currencies in our domestic market.”
Dr. Samuel Worlanyo Mensah
Excessive Foreign Currency Leads to Negative Value in Exchange Rate
Rev. Dr. Mensah noted that the use of foreign currencies in local markets increases their demand and that also leads to a negative value in the exchange rate, stressing that it needs to be discouraged with immediate effect.
The Economist asserted that although foreign business communities contribute to the development of the country, their main aim is to make profits and not necessarily seek to promote the welfare of the locals. “At the end of the day, they only look at their interest and not how their actions or inactions were affecting the local currency.”
The Economist opined that transactions between Ghana and another country must not necessarily be in dollars but rather the currency of the particular country Ghana is dealing with.
“If we are buying from China, we should be able to buy from the Chinese Yuan rather than the dollar, if it’s from Nigeria, we use the Nigeria Naira and that will make the cedi very stable and good.”
Dr. Samuel Worlanyo Mensah
Rev. Dr. Mensah made these known in a Boardroom Dialogue event on the topic: “Global economy, Russia and Ukraine war, prospects and challenges for Ghana.”
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