The Association of Importers and Exporters of Ghana has implore President Nana Akufo-Addo to sack the Governor of the Bank of Ghana, Dr Ernest Addison over the depreciation of the cedi against the dollar and other major international currencies of trade.
At the BoG’s recent Monetary Policy Committee meeting, Dr Addison said: “Gross International Reserves at the end of February 2022 stood at US$9,547.96 million, providing cover for 4.3 months of imports of goods and services. This compares with US$9,695.22 million, equivalent to 4.4 months of import cover at end December 2021”.
“There was increased volatility in the foreign exchange market during the first few months of the year, driven by demand pressures from offshore secondary market activities, corporate sectors, oil importers, and weakened sentiments due to the downgrade by the rating agencies”, he said.
Dr Addison added: “These factors tightened forex liquidity which was partly eased by the regular foreign exchange auctions and inflows from mining and remittances. Cumulatively, the Ghana cedi depreciated by 14.6 per cent against the US dollar, and 11.6 per cent each against the Pound Sterling and Euro, in the year to 15th March 2022. Comparatively, the Ghana cedi appreciated by 0.6 per cent and 3.4 per cent against the US Dollar and the Euro, and depreciated by 1.0 per cent against the Pound Sterling in the same period of 2021”.
In a statement, however, IEAG said it wants President Nana Akufo-Addo to “immediately dissolve the economic management team and fire the Governor of the Bank of Ghana, Dr. Ernest Addison”.
“We disagree with the position of the Governor of the Bank of Ghana, Dr. Ernest Addison that the Cedi’s depreciation is partly due to the global economic crisis”, the group argued.
“Indeed, it will be recalled that few years ago the BoG closed down some commercial banks as a measure to create a stronger cedi. Also, the prime rate was maintained low over a long period in bid to create a strong cedi but nothing came out of that,” the statement signed by Executive Secretary Samson Asaki Awingobit said.
The group said: “Regrettably, the cedi continues to depreciate even further in the face of all these measures put in place by the BoG and the economic management team”.
The exporters and importers said “numerous appeals made by trade associations in the country asking the Bank of Ghana to compel the commercial banks to reduce their interest rate yielded nothing”, noting: “It is for this reason that those of us in trade and commerce are utterly surprised that the BoG Governor is now indirectly asking the commercial banks in the country to further increase their interest rates following the increment of the base rate to 17%”.
“We believe that this move by the BoG will further worsen the plight of businesses in the country, as the cost of borrowing will shoot up thereby affecting price of goods. We are, thus, demanding that the BoG should immediately review the 17% base rate announced yesterday, 21 March 2022”.
“It is our strongest view that the current Board of Directors of BoG are incompetent and must be replaced immediately because they have failed woefully in managing the cedi. Also, the economic management team system must be abolished as we cannot tell or feel its impact on building a stronger cedi”.