Unpredictable cedi appreciation could hurt businesses - Kenneth Thompson warns

Kenneth Thompson, former Chief Executive of Dalex Finance, has concerns. He worries about the sudden rise of the Ghanaian cedi against the US dollar. He believes this unpredictability could harm businesses.

Speaking on JoyNews’ Newsfile, Thompson noted that the cedi's recent gains do not indicate a real change in the economy. This makes it hard for businesses to plan effectively.

Thompson is skeptical about how long the cedi's strength will last. He stated, "The fundamentals of this economy have not changed." If they had, there would be steady improvement.

He questioned whether the Bank of Ghana (BoG) is following a clear exchange rate band. "Is it between 12 and 13 cedis, or 12 and 15? I don’t know," he said.

Thompson highlighted risks for businesses when exchange rates fluctuate wildly. He asked, "If I’m planning now, what figure do I use?" Incorrect numbers could lead to business failure.

He explained that without stability, companies face financial strain. This is especially true for importers and those with dollar obligations.

"I don’t know what the rate will be in July or December," he added. This unpredictability complicates cost and revenue forecasting.

Meanwhile, Prof Godfred Bopkin from the University of Ghana Business School emphasized a need for stronger foreign reserves. He believes this is essential for long-term economic stability.

“What the market needs is stability,” he said. “We need to build our reserves.” He agreed with the First Deputy Governor of BoG about not depleting reserves.