Cedi depreciation bites hard – Businesses call for urgent interventions

Businesses which bear the brunt of the local currency have called on the government and the Bank of Ghana (BoG) to act urgently to save the falling Ghana cedi.

Companies in manufacturing, commerce and other sectors said the persistent depreciation of the Ghana cedi against major international currencies, especially the US dollar, must be checked immediately because it was slowing their businesses and pushing a lot of cost on the consumer who must pay higher for products whether essential or luxury.

The Ghana Union Traders Association (GUTA) and the Chamber of Automobile Dealership Ghana (CADEG) said the depreciating cedi had pushed the cost of goods and services to rise, making it difficult for businesses to stay afloat.

The Ghana cedi is in a record-breaking weakening cycle, depreciating 14 per cent against the dollar this year, fuelled partly by foreign exchange (forex) supply shortfalls. The local currency, which was trading in January at GH¢11.97 to a dollar on the interbank market and at GH¢12.33 in the retail market, is currently being bought at GH¢13.9000 and sold at GH¢13.9140 to the dollar at the interbank rate as of yesterday.

At some forex bureaux in Accra, the dollar is being bought at GH¢15.00 and sold for GH¢15.30. According to the Bank of Ghana’s (BoG’s) January 2024 Summary of Economic and Financial Data, the cedi started 2024 better than the same time in 2023, when it lost 20.6 per cent to the US currency, and in 2022, the cedi depreciated by 30 per cent against the dollar.

But the Governor of the Bank of Ghana, Dr Ernest Addison, told the Daily Graphic that the central bank was keeping a vigilant eye on the developments on the foreign exchange market.

The businesses want the government to take urgent steps to salvage the situation. The cost of vehicles, their parts, building materials and hardware, imported semi-finished and raw materials, electrical appliances, materials for the printing industry, among others, have all taken a hit in the recent spiral of cedi’s depreciation.

Growing concerns
GUTA in a statement signed by its President, Joseph Obeng, said the cedi’s depreciation had created a big mess for the business community, especially the trading sector. “The purchasing power of the consuming public has been affected, thereby reducing the turnover of businesses,” he said.