The Minority in Parliament has criticised the government over what they describe as poor management of the Ghanaian cedi, arguing that despite the injection of billions of dollars into the economy, the currency remains significantly weaker than it should be.
Addressing the press on Friday, November 14, former Finance Minister Dr. Mohammed Amin Adam stated that the scale of foreign exchange interventions should have resulted in a much stronger cedi.
“With the billions of dollars pumped into the market, we expected the exchange rate to be around GH₵8 to the dollar. The weak response from the market shows that currency strength cannot simply be bought; it must be driven by strong economic fundamentals,” he said.
Dr. Adam accused the government of relying on short-term measures rather than confronting structural weaknesses that continue to undermine the currency.
He drew comparisons to the IMF-supervised programme under the previous NPP administration, noting that forex interventions were strictly regulated.
“Under the NPP, the IMF restricted the Bank of Ghana to monthly interventions of just US$80 million, even though reserves were far above target. By the end of 2024, reserves had reached nearly US$9 billion,” he said.
According to him, the relative stability the cedi enjoyed earlier in the year stemmed from the robust reserves inherited by the current administration.
“The new Bank of Ghana leadership has been injecting large volumes of forex into the market using these inherited reserves. The recent performance of the cedi is not the result of any innovative policy but the outcome of the solid groundwork laid under the NPP,” he added.
The Minority estimates that the Bank of Ghana has injected about US$8 billion into the market since January, which moved the exchange rate from about GH₵14 per dollar on January 6, 2025, to approximately GH₵11.
Dr. Adam argued that such gains are “small, fragile, and unsustainable,” considering the scale of expenditure. He also accused the government of manipulating public perception by using the November 2024 rate as a reference point.
“Repeating an untruth does not make it true,” he said.
The Minority warned that the heavy reliance on forex injections is rapidly depleting the country’s reserves, while underlying challenges—such as low productivity, weak exports, and inadequate forex inflows—remain unresolved.
“These resources have been wasted on temporary gains that will vanish once the government is unable to continue intervening,” they cautioned.
Dr. Adam further noted that the Bank of Ghana has now adopted a new IMF-approved intervention strategy, which acknowledges that recent improvements in the cedi were driven by unsustainable and opaque measures. He welcomed the shift, emphasising that future interventions must be “careful and transparent,” as this approach is essential for long-term economic stability.
Source: theghanareport
.jpeg)
.jpeg)
.jpeg)
.jpeg)
0 Comments