Don’t oversimplify Cedi gains – Prof. Gatsi caution Ghanaians

The Dean of the University of Cape Coast Business School, Prof. John Gatsi, has shared insights on the Ghana Cedi's recent appreciation. He urged Ghanaians not to attribute this change to a single factor. The currency's performance results from various economic and policy elements.

Prof. Gatsi acknowledged initiatives like Gold-for-Oil and Goldbod for improving forex inflows. However, he emphasized that no single policy can take full credit for the cedi’s gains. “You cannot credit the appreciation of the cedi to just one lenient factor,” he stated.

He addressed claims linking the cedi's strength to a gold purchasing policy by former Vice President Dr. Mahamudu Bawumia. While these policies may have helped stabilize reserves, they do not fully explain current market responses. “If the gold purchasing policy was the sole cause, we would have seen similar results when they were in power,” he pointed out.

Prof. Gatsi commended the Bank of Ghana for its strategic market interventions. He noted these actions have significantly shaped investor confidence and improved currency performance. He also highlighted favorable global conditions like declining crude oil prices and rising gold prices.

However, he warned that these trends only benefit Ghana if local policies are effective. “Trade tensions or global price shifts won’t help us unless we match them with smart local policy,” he explained. Effective management and real-time market intelligence are crucial.

On a broader scale, Prof. Gatsi expressed concern about Ghana’s low export competitiveness. He called on the government to invest in local production and add value to exports. This would reduce reliance on imports.

“When imported goods are cheaper than local options, people will choose foreign products,” he said. He urged improvements in quality, pricing, and marketing of Ghanaian goods.

He also stressed stronger enforcement by standard-setting institutions to enhance locally made goods' appeal in domestic and international markets. Concluding his remarks, Prof. Gatsi acknowledged concerns about whether the cedi’s appreciation is sustainable.

He argued that instead of questioning durability, efforts should focus on building a resilient economy. “We need to expand our production base and diversify exports,” he said. Supporting policies that add long-term value is essential for sustainability.

Prof. Gatsi shared his views during an interview on Kessben TV’s Maakyeshow.