Director of research at the Institute of Economic Affairs, Dr John Kwakye, has debunked claims by the Deputy Finance Minister, John Kumah, that the cedi is the third strongest currency in Africa.
In a series of tweets to tackle the contentious claim, Dr Kwakye said the cedi having the third highest value against the dollar is not the same as being the third strongest currency on the continent.
Dr Kwakye said value can be artificially created, which Ghana did in 2007 by redenomiating the cedi, hence the Deputy Finance Minister’s comments on the cedi are wildly inaccurate.
“The cedi is not the third strongest in Africa. It is the currency with the third highest value. They are two different things. Just because a currency has a high value doesn’t mean it is strong. The value can be artificially defined through redenomination.
“Let it be made clear that you can create an artificially high-value currency through redenomination. But you can’t create an artificially strong currency. Your currency is as strong as your economy is,” Dr Kumah explained on his Twitter handle.
Dr Kwakye continued: “Let it be made clear that the GHc was given an artificial high value when it was redenominated in 2007. Since then, the exchange rate in old cedi terms, has moved from 10,000 to 100,000 to the dollar. That tells you how weak the currency is.”
He concluded: “However, over time the test will be to what extent the currency maintains its value vs the $. Since 2007 when Ghana made its new cedi artificially equal to the $, in old cedi terms the exchange rate has moved from 10,000 to 100,000. How can you call the cedi a strong currency?”
Ghana Cedi Is The 3rd Strongest Currency In Africa
Speaking on the Business Edition of Joy News’ ‘PM Express’, the Deputy Finance Minister fought back against claims that the Ghana cedi is one of the worst performing currencies worldwide.
He said: “Don’t believe those propaganda. I just returned from Tunisia on a programme, and Tunisia has the second strongest currency in Africa.
“Ghana is third actually according to any global ranking of currencies. I am talking about the strength of currencies in Africa. The Libyan Dinar, followed by Tunisian Dinar and then Ghana cedi is the third strongest currency in Africa. But maybe they were talking about the rate of depreciation.
“I just saw what is happening in Nigeria and they are equally complaining that their Naira is not just four hundred and something to the dollar, but sometimes it’s even 700 depending on where … sometimes they can’t even find the dollar. So this is a global situation.”