The Ghana International Trade & Finance Conference (GITFiC) has discounted the idea of Ghana trading in the Chinese Yuan, while stressing that issues of trade must be approached scientifically with accurate calculations to arrive at a consensus for the betterment of Ghanaians.

Mr Selasi Koffi Ackom, Chief Executive Officer of GITFIC, commenting on the suggestions from some stakeholders that Ghana should trade in the Chinese yuan instead of the dollar, indicated that “Trading in the Chinese Yuan at this moment is currently not feasible.”

“The Ghana International Trade & Finance Conference (GITFiC) is of the view that the Ghanaian Central Bank should not be compelled into entering such an agreement, especially at this period of Ghana’s economy… Serious Economic issues require serious comments and analysis especially in this era.”
Mr Selasi Koffi Ackom

Mr. Ackom cited a 2015 Bilateral Currency Swap Agreement between the People’s Bank of China and the South African Reserve Bank which was worth some 30 billion renminbi (RMB). The purpose, he said, was defeated in the long run as US dollar still emerged the winner. He thus, observed that “The economic determinant factors go beyond import and export. This, we believe, should be underlined.”

The Chief Executive Officer of GITFIC moreover, indicated that Egypt also tried to do the same thing but it amounted to nothing as the issue of the US dollar went beyond just import and export. He further added that Africa’s largest economy, Nigeria, had in the past and present signed the same agreement with People’s Bank of China (PBOC) with the same purpose without meaningful results.

“This agreement was first signed in 2018. The two countries agreed to swap up to 15 billion RMB against over 700 billion naira. The winner has, again, been the US dollar. In January 2022, the Nigerian Minister of Finance admonished in a statement that the Nigeria-China Currency Swap deal was not working.”
Mr Selasi Koffi Ackom

Data Does not Support the Calls

According to Mr Ackom, records available to the Ghana International Trade & Finance Conference (GITFiC), indicated that between July and December 2018, 13 auctions were conducted and the Renminbi worth CNY669.66m was sold from the drawdown of CNY1bn. Similarly, he stated that in PBOC’s 2019 Activity Report, the apex bank said 26 auctions were conducted and Renminbi worth CNY782.66m was sold in 2019 from the drawdown of CNY1bn.

“The Central Bank of Nigeria also disclosed that it sold 1.45bn yuan since the inception of the currency swap deal with China at the end of 2019. In a similar report for the first half of 2020, the Central Bank of Nigeria said it sold CNY1.746.40bn from inception to the end of June 2020.”
Mr Selasi Koffi Ackom

Based on the above, Mr Ackom averred that even in the sub-region with adequate data available to GITFiC, trade volume between China and the 15 countries of the ECOWAS was $34.55bn, a year-on-year decrease of 0.3 percent. “China’s exports to ECOWAS were $27.61bn, an increase of 1.2 percent; imports from ECOWAS were $6.94bn, at a decrease of 5.8 percent.”

“We further suggest to the Central Bank of Ghana that the GHC-RMB Cross Border Payment & Settlement Programme should still be shelved until further notice. First steps first. The Chinese Yuan is already trading on the Ghanaian Forex space. Traders can buy the Yuan with cedis and proceed to trade in China and vice versa.”
Mr Selasi Koffi Ackom

The CEO thus, “called on all well-meaning Ghanaian citizens and the entire business community to trust in Ghana’s current Economic Management Team (EMT).” He opined that the EMT’s abilities and capabilities are solid and able to handle the depreciation of the cedi and bring it back to its past glory in the coming months.

“We further advise our distinguished traders to stay put and advance in their various trading activities on an economic-scientific basis. Ghanaian traders should adapt to new formulas and changes in global trade. In areas that they lack the technical understanding and know-how, prudent avenues such as: the technical teams in our various sector ministries and other private entities are available to help them out.”
Mr Selasi Koffi Ackom

As such, he reiterated that the calls to start trading in yuan is not scientific and must be discarded.