Business News of Wednesday, 24 June 2015
The head of research at Group Ndoum says until the fundamental structure of the country’s economy is fixed Ghana’s wobbling economy will persist.
Samuel Kofi Ampah believes the whole economy is import dependent which is putting so much strain on the country’s cedi and which is ultimately affecting the economy.
“Everything used in this country is imported. The effect is that everybody is looking for the dollar to import something to sustain their businesses” and that affects the cedi, he pointed out.
Ghana’s economy is in crisis with its currency depreciating at a faster rate to the dollar. The cedi is now selling at four cedis to a dollar with fears it could hit the five cedi mark by the end of the year.
“One of the symptoms of an ailing economy is the depreciation of its currency,” Kofi Ampah pointed out.
He was particularly worried that the country over the years has failed to add value to its primary commodities and continue to export cocoa, gold and now oil without any attempt to add value.
“How many of our cocoa beans have been turned into product? Gold and even oil. How much of it have we added value? he asked.
Even dire, Ampah noted is the excessive borrowing, needless expenditure by the governments as well as the capital flight by foreign investors.
“When you sit here and have a debt to GDP ratio of 70 per cent then we have a problem. How much of GDP is owned by Ghanaians? he asked, adding, “if more than half of GDP is owned by foreigners there is capital flight; the business will transfer their proceeds back to their home country.”
“We must go back and do the things we were supposed to do and correct the structure of the economy,” he advised.
But the Executive Secretary of the Importers and Exporters Association, Ghana Samson Awingobit says the country’s economic crisis cannot be blamed on activities of importers.
Rather than blame the importers for the country’s woes, Awingobit would rather the Governor of Bank of Ghana as well as the Finance Ministry bring out policies that would solve the depreciation of the cedi.