Strong Cedi, weak jobs: Ahiagbah warns of economic mismatch

Richard Ahiagbah, the Director of Communications for the New Patriotic Party (NPP), has raised concerns about the recent appreciation of the Ghanaian Cedi. He believes that celebrating the currency's gains is short-sighted. This approach could harm the domestic job market.

Ahiagbah argues that a stronger Cedi may lower import costs. However, it threatens Ghana’s export competitiveness and local production. Without a strong production base, a strong Cedi could lead to job losses and increased dependency on foreign goods.

He stated, “When the Cedi is strong, it's good for imports but bad for exports.” He noted that while importers might reduce prices temporarily, this comfort is short-lived. Ultimately, it leads to job losses abroad.

Ahiagbah compared Ghana’s situation to China’s policy of maintaining a weaker currency to boost exports. He questioned why Ghana is not following a similar strategy. He warned that there is no long-term plan linking Cedi appreciation to production and export growth.

He asked, “What is that policy’s medium to long-term goal?” Ahiagbah emphasized that a currency's value should be tied to productivity. Celebrating a strong Cedi without industrial output reflects poor alignment with job creation goals.

“It is conflicting for a party that campaigned on jobs,” he said. He warned this trend undermines efforts to reduce import dependency and grow local exports. These factors are crucial for sustainable employment in Ghana.

He asserted, “Any strengthening of the Cedi not driven by production makes achieving import substitution harder.” This situation complicates creating job opportunities for young people in Ghana.

Ahiagbah called for a new approach in evaluating currency performance. Policymakers should focus more on how the Cedi can support an export-led economy.

“We often debate the Cedi's performance from an import perspective,” he noted. “We must explore its export angle because that's where economic growth opportunities lie.”

His comments come as the Cedi has gained against the US dollar recently. While the government claims this shows sound fiscal management, critics like Ahiagbah argue that true success depends on sustainable economic growth and job creation.