Private legal practitioner, Kofi Bentil has said cash from the Cocoa Syndicated Loan will not help in solving the problem of the depreciating cedi.
If it could, he noted, previous governments would have succeeded at arresting the free fall of the cedi in previous years through the same means.
The cedi has currently crossed ¢5.62 to a dollar compared to GH¢4.42 in the same period last year and GH¢4.27 in January 2017.
For a country that is greatly dependent on imports, many fear the depreciating cedi will only get worse if long term measures are not put in place to check it.
The Association of Oil Marketing Companies has warned that they may be forced to increase their prices at the pumps of the rate of depreciation continues.
President Akufo-Addo has expressed worry over the situation and the Finance Minister, Ken Ofori-Atta has promised relief in the coming weeks as government is expecting large inflows of foreign exchange soon.
He told journalists during the week that government was working at solving the problem and “We have about $300 million coming in from COCOBOD and another $600 million also from COCOBOD in about a month or so. We have officially launched our Eurobond which will be $3 billion and that should close within the next couple of weeks.
“With the kind of fundraising that I have talked about,” he said, “I think that all things will come to an end and we will realise that this is just a blip…and all of this should happen the next two or so weeks,” he added.
But Mr Bentil doubts if this is the solution to the problem.
The Senior Vice President of policy think tank, IMANI Africa said, the claim that the COCOBOD cash will solve the problem is like “having a disease-causing temperature and you are taking a painkiller for it,” he said on Joy News’ news analysis programme, Newsfile.
He said causes of the year on year depreciation of the cedi is yet to be known and government, instead of consistently pumping dollars into the economy and relying on COCOBOD and foreign investments, must look at long term solutions.
“What the cedi rate reveals is that there is something fundamentally wrong with our economy and I don’t think we have understood it.
“Whoever is dealing with it is not doing a good job. If you claim to be working hard at something but you are not solving the problem, you don’t know what you are doing because clearly, the problem is not being solved.”
The Finance Minister’s suggestion for something to be done about the country’s over-dependence of exports as it creates a depreciation of the cedi, has also been critiqued by Mr Bentil.
He said the United States’ ability to maintain a stable dollar despite its large trade deficit is proof that that analogy is moot.
Mr Bentil suggests “We have economists in this country, department of economics, analysts, think thanks…we have people who should take this issue and analyse it.
“Let’s find what causes our cedi to behave this way because if we don’t cure this temperature it will start affecting our brain and start killing everything. We need to study it understand it then we can competently manage it.”
The Executive Director of the Media Foundation for West Africa (MFWA), Sulemana Braimah agrees with Mr Bentil.
He said the problem of the cedi is similar to a number of problems the country faces and government has failed to address it just like they have failed in the other areas.
“We have not had politicians who have said they will take a long term approach which will not yield the results that will make people happy immediately, which will mean that the likelihood of losing an election is real but it is about the interest of the country.”
He is certain that the vice president, Dr Mahamadiu Bawumia – who is the head of the economic management team – is capable of solving the problem and they should take the bold step and damn the consequences.
