Calls for devaluation of cedi stirs up mixed reactions

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There appears to be some mixed views on whether Ghana should devalue its currency or not.

There is an ongoing debate on whether or not the cedi should be devalued.

Vice President, Paa Kwesi Amissah Arthur last week waded into the debate when he called on West African countries to consider devaluing their currencies before establishing a common monetary zone which he believes will ensure currency stability

But a Former Deputy Governor of the Bank of Ghana Emmanuel Asiedu-Mante has rejected the call.

The Former Deputy Bank of Ghana Governor Emmanuel Asiedu-Mante said Ghana’s decision to devalue the cedi should be based on economic fundamentals not for being part of a Union.

Majority of companies in import business risk collapse if Ghana goes ahead to devalue the cedi.

Though the Chief Executive Officer of Dalex Finance, Ken Thompson believes this he has welcomed the Vice President’s call for West African countries to consider devaluing their currencies before establishing a common monetary zone.

If companies in import business collapse with the devaluation of the currency, Ghana will benefit in the long term.

“The currency is depreciating anyway we have a situation where we are importing everything, we need to devalue the currency in a controlled manner which will allow us now to make imports very expensive, to promote export.

But what people are afraid of and I really don’t know why they are afraid because it is something we have to do. All the businesses that are built on import will collapse because suddenly their import will be expensive and we should allow them to do so.”

He adds that ‘the devaluation will allow us to allocate our resources more effectively rather than spending our limited resources to support the currency which is something we can’t support forever, we should allow the import industry to collapse so new ones will take their place like manufacturing which will lead to export as well as devalue the currency’.

By: Norvan Acquah – Hayford / citifmonline.com

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