Dr. Nii Moi Thompson, a former Director General of the National Development Planning Commission (NDPC), has urged the government to work to reduce the dollarization of the Ghanaian economy.
This, in his opinion, is one method of dealing with the challenges confronting the economy, particularly the local currency, the Cedi.
He explained that a country that gives its officials US dollar car loans to import luxury vehicles in the midst of a pandemic should be the least surprised when its currency later collapses due to a lack of dollars.
“Indeed, during the crisis, the public was treated to periodic reports of public officials seeking ‘medical reviews’ abroad, despite the presence of the Bank Hospital, built by the Bank of Ghana to provide world-class health services and thus help relieve the cedi of the constant pressure of dollar demand from those seeking medical treatment abroad.
“Everything from hotels to business and residential accommodation to port charges is priced in dollars, while politicians make campaign promises in dollars without regard for their effect on the cedi.
“Even the Black Stars are paid in dollars (while the cocoa farmers who bring in the dollars are paid in a depreciating cedi). Government must launch an ambitious agenda for dedollarisation as part of a broader agenda for transformation and resilience,” he said in a write up.
He further explained that in the 2020 budget to Parliament in November 2019, the Minister of Finance announced declining economic growth rates from 7.0% in 2019 to 6.8% in 2020 all the way to 4.6% in 2022, before rising slightly to 6.5% in 2023.
These forecasts followed negative growth in key sectors of the economy, such
as construction and water and sanitation sectors (-4.4% each), and the near collapse of the financial sector, which posted successive negative growth for 24 months (between 2017 and 2019), he said.
“Clearly, the economy was in a state of distress long before Covid and later Ukraine. Acknowledging this fact and identifying the policy flaws that dealt such body blows to the economy in three short years is critical to understanding the policy prescriptions of the 40-Year Plan and implementing them for the successful transformation of Ghana’s economy,” Dr Thompson stressed.
