Economist and lecturer at the University of Ghana, Patrick Asuming, has warned that Ghana cannot rely on short-term gains in the value of the cedi without making bigger changes to
The report indicates that economist and University of Ghana lecturer, Patrick Asuming, has warned that Ghana cannot rely on short-term gains in the value of the cedi without implementing deeper structural reforms to diversify the economy.
It further notes that speaking on Joy FM’s Super Morning Show while discussing the recent depreciation of the cedi, Prof Asuming stated Ghana had managed to stabilise some financial pressures in the short term but remained vulnerable due to its heavy dependence on gold exports.
According to him, concern should arise when the local currency begins to suffer sharp and sustained losses within a short period.
“If we begin to see so much pressure on the currency that, within a short period, we experience massive losses, then you begin to worry because that is when things get out of control,” he said.
Prof Asuming explained that recent stability in the cedi had largely been driven by fiscal and monetary measures implemented by authorities.
“We’ve done part of what we could do to make the currency stable. We’ve implemented the short-term measures,” he stated.
He noted that short-term currency movements are often influenced by financial flows, speculation, monetary policy and fiscal interventions.
“Those have been somewhat stabilised,” he added.
However, he emphasised that the long-term strength of the cedi would depend on Ghana’s balance of payments, export performance and the level of diversification within the economy.
“But over the long term, movements in the currency are determined by what happens on our balance of payments account,” he explained.
“That is how much we are exporting, how much we are importing, and how diversified our export base and economy are.”
Prof Asuming argued that Ghana had not done enough to build a resilient economy capable of withstanding external shocks.
“In terms of making the economy more resilient, sustainable and diversified so that our exports become less susceptible to global shocks, I think we have not done much yet,” he said.
During the discussion, he acknowledged that rising gold prices and increased gold exports had contributed significantly to the recent appreciation of the cedi. However, he cautioned against overdependence on a commodity whose price Ghana does not control.
