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Cedi’s rise great, but you cannot save the economy by borrowing – Casely Hayford

source : Sidney Casely Hayford

Financial analyst, Sydney Casely Hayford says the excitement brought by the recent rise in the value of the cedi may be temporary because the gains could be artificial.

For many individuals and business owners, the recent rise in the value of the cedi is good news, but Mr Casely Hayford says the excitement must be tempered.

“We have to be sensibly cautious about the cedi appreciation and not create any false impressions,” he warned.

Speaking on Peace FM’s ‘Kokrokoo’, Mr Hayford said it will be appropriate to wait for the appreciation of the cedi to persist for about four months before any conclusions are drawn.

“It is better for us to wait for four months to really establish if the currency will stabilize or not before we get excited about it”.

The Ghana cedi since the beginning of this year has depreciated against the major foreign trading currencies by an alarming 40 percent, and there were even predictions that it might go further down to 60 percent by the end of the year.

However, recent developments have indicated that the cedi has started appreciating against the major foreign trading currencies after the government released the $1 billion it accrued from the Eurobond issue and additional $1.7 billion from the cocoa syndicated loan.

But Mr Hayford said the real value of the cedi has not really changed but has only been influenced by monies from the Eurobond and the cocoa syndicated loan and that “you cannot save the economy by borrowing”.

He indicated that the fundamental problem facing the economy has not been solved and until that is done, the cedi will only appreciate for a short period.

According to him, even the government’s partnership with the International Monetary Fund (IMF) is not the solution and does not solve the problem.

He said “government should rather create employment opportunities so that people can generate income through which it can earn income taxes to enable it solve problems of the economy”.

He advised the government to be steadfast in implementing policies related to the economy and that, until this was done the problems of the economy would persist.

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