Nana Marfo Amaniampong, Chairman of Ghana’s Parliamentary Committee on Trade, Industry and Tourism has called for the private sector to work with the government to halt the depreciation of the Ghanaian Cedi.
Speaking at an event in Accra to inaugurate a Council and Central Executive Committee for the Ghana National Chamber of Commerce and Industry, Amaniampong noted that boosting industry, particularly import substitution, would help the long-term value of the Cedi.
“What Amaniampong notes, that reducing imports will aid in strengthening the Cedi, is noble. Over time, careful attention to monetary and trade policy should bear fruit. Indeed, inflation in the country hit a six year low of 9% in January,” noted Richard Gardner, CEO of Modulus, a US-based developer of ultra-high-performance exchange technology. “That said, in the immediate-term, cryptocurrencies are a viable option to hedge against inflation. And, while inflation is coming down, the Cedi still faces headwinds as it continues to lose ground against the Dollar and Euro.”
According to press coverage, officials noted that depreciation increases costs, lessens the real value of bank capital, and disturbs business planning. Additionally, banks build future depreciation into their costs, driving up the cost of lending.
“President Nana Akufo-Addo has said that he’s upset and anxious about the depreciation. I would humbly suggest that it may be worthwhile exploring the export of talent. Look, Google chose Ghana as the site of its African AI research center. Leverage that and churn out technologists. Technology is the great equalizer. It doesn’t matter where your diploma comes from. What matters is how well you can code and develop technology that’s in demand. If Ghana becomes a center for a burgeoning fintech industry, ripples will be felt throughout the economy,” explained Gardner.
Modulus is known throughout the financial technology segment as a leader in the development of ultra-high frequency trading systems and exchanges. Over the past twenty years, the company has built a client list which includes Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, NASA, Siemens, Shell, Yahoo!, Microsoft, Cornell University, and University of Chicago.
“Does it seem counterintuitive to support cryptocurrencies when dealing with depreciation? Absolutely. But the data shows us that Africa is an early adopter of digital currencies. It makes more sense to embrace that than to fight it. Inertia is your friend here. Smooth the way for digital currencies. Be ground zero for making it a practical payment option. And use that interest in technology to drive a groundswell of energy around Ghana-based tech firms,” opined Gardner.