Next BoG governor must stabilise cedi – CEPA

The Centre for Policy Analysis (CEPA) says it expects the next Governor of the Bank of Ghana (BoG) to immediately arrest the current slide in the value of the cedi against the other trading currencies, particularly the dollar, or risk running what it described as an economic stabilisation programme after the December 2012 general elections.

“The immediate challenge for the incoming governor will be to stop the slide in the cedi,” the Executive Secretary of CEPA, Dr Joe Abbey, told Daily Graphic in an interview in Accra.

The position of Governor of BoG became vacant following the elevation of the Governor, Mr Kwesi Bekoe Amissah-Arthur, to the position of a Vice President.

The first deputy, Dr Henry Akpenamawu Kofi Wampah, is currently acting and has been highly tipped to succeed his former boss.

“If the incoming governor does not succeed in that regard (stop the cedi from further depreciation), then he/she will have to stabilise the economy next year and that will have dire consequences on growth and job creation,” Dr Abbey added.

The cedi has since January this year lost more than 20 per cent of its value to the US Dollar. The fear is that the situation could worsen into the year.

Given that a continuous depreciation of the cedi has direct consequences on economic stability and investor confidence in the economy, Dr Abbey said solving it is more eminent than any other issue, a task the next Governor should not belittle.

He has, however, added that the root cause of the depreciation was not a monetary issue but “as a result of excess expenses and anxiety in an election year.

“The problem is a fiscal one and the next governor will definitely need support from the Ministry of Finance and Economic Planning as well as Ghanaians,” he said.

Source: Daily Graphic