'Don’t celebrate cedi gains if prices remain the same' - Prof. Baah Boateng

Professor William Baah Boateng, an economics lecturer at the University of Ghana, has challenged importers and traders. He wants them to reflect the gains of the appreciating cedi in their prices. Otherwise, they risk showing a double standard.

Speaking on Joy News’ PM Express Business Edition on May 8, he questioned business owners. They often raise prices when the cedi weakens but do not lower them when it strengthens.

He expressed hope that if prices go up during depreciation, they should also go down during appreciation. This comment followed remarks from a representative of the Ghana Union of Traders Association (GUTA), who welcomed the cedi's rise.

Prof. Baah Boateng warned that if price adjustments do not match the cedi's appreciation speed, caution is needed. He described a common behavior among importers: they assume the worst when the cedi weakens and adjust prices accordingly.

“When the cedi appreciates, importers should reduce prices,” he stated. His comments come amid public frustration over rising goods and services despite a stronger cedi.

He emphasized that market discipline should apply both ways. If businesses raise prices when currency falls, they must lower them when it rises. There should be no different standards for losses and gains.

The professor praised the Bank of Ghana’s cautious approach in this environment. “They are watching how things unfold,” he noted, calling this wise.

He stressed that economic realities involve more than just supply and demand. “Every market has some level of regulation,” he said.

While acknowledging improvements in government fiscal discipline, he pointed out that economic fundamentals remain unchanged since last year.

“The economy’s structure is still similar to what it was last year,” he explained. However, he recognized efforts to control spending by the government.

“Government is managing expenditure without cutting it entirely,” he observed. This management ties spending to economic activity.

He argued that effective fiscal management stabilizes the economy. “If fiscal policies are sound, the central bank can focus on monetary policy.”

Prof. Baah Boateng's message was clear: The appreciation of the cedi should lead to price reductions in a fair market system. Traders must not rely on fear-driven pricing models while enjoying currency gains.