Answer to Question #246154 in Macroeconomics for Richie

Question

How is Ghana positioned to increase the value of the cedis?

Answer 1

'Ghana cedi is the best performing currency against US dollar' - Bawumia

The cedi is the best performing currency in the world against the US dollar. This is according to Vice President Dr. Mahamudu Bawumia.

The cedi depreciation, which has been a major problem in the country over the years, has even led to the inauguration of the FX Development Committee to tackle issues relating to the depreciation of the cedi and find solutions to them.

The cedi last year depreciated by more than 12.7 percent, the worst performance since 2015 when the cedi depreciated by more than 14.6 percent.

But commending the governing New Patriotic Party (NPP) for the good work done in sustaining the cedi at the Town Hall meeting held at Kumasi on Tuesday, the Vice President said there has been a major change in the cedi's performance since the NPP got into power.

"Indeed for us, if the cedi is to match what the NDC record is, in terms of the nominal change in the currency, we'd have to do quadruple jump which means we have to move from 4 close to 16 to be able to match their record. We have only gone from 4 to 5.35 and they are making noise."

"So thankfully, this year, the cedi is performing quite well and reflecting the fundamentals and currently, the cedi is the best performing currency in the world against the US dollar. As we speak this year, with an appreciation of 3.4%, the data shows that Ghana's macro-economic fundamentals are strong," he indicated.

Bawumia on cedi depreciation

Dr. Bawumia at a town hall meeting in 2019 similarly took a jab at the NDC for an explanation of the cedi depreciation.

The opposition party had trumpeted a popular quote from Dr. Bawumia that "if your fundamentals are weak, the exchange rate will expose you" to show that the NPP government had also failed in the management of the cedi.

But the Vice President insisted that the fundamentals are strong and described such arguments as warped.