Vice President Dr Mahamudu Bawumia has called for Ghana’s import dependency to be addressed as one of the surefire ways to help get the cedi back on track and end the rapid depreciation against the dollar.
Speaking during the opening of the StanChart Fintech festival on Wednesday, October 26th, 2022, the Vice President said Ghana has had a trade surplus for five straight years yet continues to have a depreciating currency because the majority of foreign exchange earnings doesn’t stay in the country.
“You are seeing Ghana consistently, over the last five years, having more and more trade surpluses but at the same time we have had these trade surpluses on our balance of payments. This is like the first time in about twenty years that we have had consistently, about five years of trade surpluses on our balance of payment, at the same time we are having a lot of current account deficits, which means that a lot of the foreign exchange that we are earning from our trade doesn’t stay in Ghana,” he said.
Bawumia continued: “One of the areas where we have to address this is to reduce the import dependency that we have as a country. There is soo much when you look at the broad spectrum, from toothpick to tomatoes to rice and maze, and so there is a very high dependency but as the global economy is going to realign to the new reality with more self-reliance Ghana cannot be left behind.“We also have to look very closely at how we enhance domestic production and reduce dependency on imports for commodities that we can very easily produce here in Ghana. We also have to look very clearly at our foreign exchange regime. It is very clear that it is quite loose and this is why we are going to be working to see how we can tighten the foreign exchange regime,”
The Vice President said the government is working to put in place measures to address these challenges and the President would brief the public in due time.
“Of course, I think that some of the details around some of these pillars I am talking about, when the president addresses the nation hopefully by the end of the year, some of these details will be fleshed out in more specifics.
“In broad terms, you cannot address the current economic crisis without addressing the fiscal and debt sustainability, without addressing the production side, without addressing the foreign exchange regime and what allows us to lose a lot of foreign exchange. But, more importantly, if we are going to address this, the economy must be digitalized and that is something we have started since 2017.” he concluded.
The StanChart Fintech festival is an annual event to assemble experts to discuss how to use technology to propel growth in the financial sector.