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Cedi fall taking a toll on our businesses, says Traders’ Federation

The federation, comprising eight groups, argues that the rapid depreciation of the cedi is severely depleting their capital and endangering their businesses.

The Ghana Federation of Traders has issued a stern ultimatum to the government, demanding immediate measures to reduce the exchange rate from GHC15 to GHC10.

The federation, comprising eight groups, argues that the rapid depreciation of the cedi is severely depleting their capital and endangering their businesses.

Eric Kwaku Boateng, the chairman of the Ghana Federation of Traders and president of the Automobile Dealers Union warned that if the government fails to respond promptly within the next two weeks, the federation will organise a nationwide protest.

“Ghanaian businesses have collapsed, and I am a victim”, Boateng told Asaase Business in Kumasi. The dollar is making things difficult for us as a business community. The dollar is under people’s houses and that is why we can’t get the dollar to operate.

“Now three years down the line, I have imported only three containers. What we, the traders are telling the world, our leaders, and the Ghanaian community as a whole, a lot of unions are coming out to join to demonstrate.

“We are pleading, urging our president and the vice president that in two weeks, as we said, if we don’t hear anything from them about the dollar from GH15 to GH10… we will let the world hear about us again. Tinubu of Nigeria has done it, and we know they can also do it”, Boateng warned.

Proposal

Meanwhile, a development economist, Dr Frank Bannor has proposed some measures aimed at addressing the seasonal depreciation of the cedi.

Bannor wants government to ban the import of some products into the country and also take a critical look at how forex is traded in the country to address the problem.

The cedi has depreciated by about 14% against the dollar this year, fuelled partly by foreign exchange (forex) supply shortfalls.

The local currency, which was trading in January at GHC11.97 to a dollar on the interbank market and at GHC12.33 in the retail market, is currently being bought between GHC13.9000 and sold at GHC13.9140 to the dollar at the interbank rate.

Speaking to Kwaku Nhyira Addo on the Asaase Breakfast Show on Monday (27 May) Bannor proposed for the banning of some imports and relook at the trading of forex in Ghana.

“We can ban imports of some goods into the country. It is one of the critical measures we need to take and also at how we trade dollar within our economy,” Bannor said.

Commitment

The Bank of Ghana (BoG) has affirmed its commitment to stabilizing the cedi’s exchange rate, following its rapid depreciation against the dollar. In a press release issued by the Monetary Policy Committee on Monday (27 May) the BoG announced that it possesses sufficient foreign exchange reserves to support the market.

The central bank advised economic agents to refrain from speculative purchases, warning that such actions could lead to economic losses when the market corrected itself.

“The Bank of Ghana remains fully committed to providing stability in the exchange rate for the cedi. The Bank has enough foreign exchange reserves to support the market, and economic agents should stop engaging in speculative purchases as they will suffer economic losses when the correction occurs,” the BoG stated.

The BoG acknowledged that the exchange rate has recently faced pressure, particularly in the forex bureaux market. The increased demand for higher imports, energy sector payments, and uncertainty surrounding the progress of debt restructuring negotiations with external creditors have contributed to this pressure.

“These conditions have influenced sentiments and led to additional pressures,” the BoG noted.

Reporting By Jonathan Ofori, Asaase Newsroom, Kumasi

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