The Mahama Administration appears to have been hit by confusion over the free-falling of the local currency, as personalities within the ruling party give curious explanations for the situation.
Anita De Sooso, the National Women’s Organiser of the governing National Democratic Congress (NDC) is the latest to diagnose a curious cause for Ghana’s free-falling local currency, saying the Cedi’s depreciation is caused by ‘voodoo’ or juju and dwarfs.
Ms. De Sooso, now a Deputy National Coordinator of the National Disaster Management Organisation (NADMO), claimed the witch doctors who use dwarfs are stealing Ghana’s foreign currencies from banks and other financial institutions, and this inadvertently affects its stability.
‘Do we know where they get the money from? Do we know what they do with it? These dwarfs…the black magic, is what has made the Cedi lose value,’ she told Accra based Adom FM yesterday.
Anita’s prescription is the latest in strange diagnostics made to explain the fast depreciating local currency that has forced the Bank of Ghana (BoG) to issue a number of stringent directives to stabilize the local currency which has fallen sharply against all the major foreign currencies it trades with.
The US Dollar may hit the GH¢3 mark by the close of the week if the BoG does not pump more dollars into the system, with the Governor being summoned before Cabinet at a crisis meeting over the economy, which is in disarray.
Minister of Water Resources, Works and Housing, Alhaji Collins Dauda, speaking at Obuasi in the Ashanti Region over the weekend, reportedly advanced reasons why there is little President Mahama can do to address the falling Cedi and the tattered economy, since both the Qur’an and the Bible have predicted hard conditions at the End Time.
‘The truth is that, Ghana is not destroyed. And one cannot blame the President for the hardship in the country because both the Bible and the Qur’an have predicted that at the end time, there will be hardship and we are faced with it,’ he reportedly stated, raising questions over the Mahama Administration’s capability to address the gloomy situation.
Another perspective that recently attracted much criticism was the one given by the General Overseer of the Christian Action Faith Ministries (CAFM) Archbishop Nicholas Duncan-Williams, who asked Ghanaians to pray for divine intervention in halting the Cedi’s free-fall.
Last Wednesday, the BoG put caps on foreign account and currency transactions in the country, slapping serious restrictions on holders of Foreign Exchange Accounts (FEA) and Foreign Currency Accounts (FCA). The new regulations put a ban on all cheque books issued in FEA or FCA.
Also, cash withdrawals over the counter for foreign accounts can only be permitted for ‘purposes outside Ghana’ and it shall not exceed $10,000. Transfers from one foreign account to another have been disallowed and anybody seeking to transfer foreign currency outside Ghana would have to be run through the bureaucracy. To top it up, all offshore foreign exchange deals by individuals and companies have been banned.
While slapping these directives, it emerged that the Bank of Ghana (BoG) did not adequately apprise the cabinet of President John Dramani Mahama with details of the regulations, forcing a crunch cabinet meeting with the central bank yesterday.
A similar meeting over the economy was held on Friday where a decision was reached to invite the Governor, Henry Kofi Wampah, to throw more light on his confusing panic measures to arrest the falling Cedi.
The Minister of Information and Media Relations, Mahama Ayariga conceded that there was confusion in the BoG measures in a statement released and signed by himself on Monday
In the statement, he wrote, ‘Cabinet however was concerned about the lack of clarity in some of the directives announced by the Bank of Ghana especially those aspects that affect the operations of foreign currency accounts and their impact on the operations of exporters and businesses in general.’
Mr. Ayariga’s statement went further to fuel criticisms that the central bank’s decision was a knee-jerk reaction to a complex situation.
Indeed, the Mahama cabinet is still left scratching its head about the central bank’s regulations as it awaits a formal clarification from BoG. According to the Information Minister, ‘…the Bank of Ghana has agreed to address any ambiguities in the measures announced and provide more clarity.’
The central bank’s regulations have attracted intense chagrin from individuals and the business community who have suddenly been saddled with the reality of not having access to their hard-earned currency because the directive orders all withdrawals from foreign currency accounts to be converted to Ghanaian Cedis for customers, in a bid to stem ‘dollarization’.
There are impending law suits following the action of the BoG directives as some forex account holders threaten to go to court.
Fitch Ratings, an international credit rating agency, has criticized the directives, saying the central bank’s measures are unlikely to ease pressure on the Cedi.
The agency rather thinks an accelerated fiscal consolidation to address growing domestic macroeconomic imbalances would suffice to ease the pressure on the local currency.
By Raphael Ofori Adeniran
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