Businessman and CEO of the African Tiger Holdings Limited, Henri Wientjis has suggested that Ghana’s devalued currency is a blessing for the country. He argues that the depreciation of the cedi should serve as an opportunity to develop the country’s agric sector and increase exports to the advantage of exporters.
Speaking at the Investment Opportunities Forum as part of this year’s Citi Business Festival, Mr. Wientjis bemoaned the apparent lack of utilization of such abundant opportunities and charged the state and its people to work to reverse the trend.
“For the majority of the farming communities here as well as the hospitality industry, a devalued cedi is a blessing for Ghana….Imagine that the rate of exchange is 10 percent, all these traders from Ashanti, North, Fante who go as illiterates all over the world to buy tooth picks, plastic shoes, if those people know that the rate of exchange is 10, then I can tell you that Ghana will be exporting food in the next two years,” he stated.
Cedi depreciates by 9.7% in 2016
Latest figures by the Bank of Ghana have revealed that the cedi depreciated by 9.7% as at the end of 2016.
The Bank of Ghana’s Summary of Economic and Financial Data also revealed that the cedi depreciated by 1% to the dollar as at May 2017.
The local currency also depreciated by 6% and 5.8% to the Euro and British Pound respectively for the same period.
The value of the Ghana cedi has been falling in relation to major international currencies for some years now.
The development in the years past, has prompted the introduction of monetary mechanisms by the central bank to stem the free fall.
Some importers have been lamenting the impact of the cedi depreciation on their operations.
For instance, traders at Abossey Okai early this year threaten of increased prices if the cedi failed its losing streak.
Allow cedi to devalue
Economist and CEO of Dalex Finance, Ken Thompson has however made a strong case for the cedi to be allowed to devalue to its natural state. In his view, though the importers suffer within the short term, the long term benefits for the economy would be more beneficial than the short term interventions to stem the cedi’s free fall. Even though Mr. Wientjis admits that the move to shift attention to agriculture may affect other sectors, he believes the benefits accruing should be of primary concern to grow the economy.
“Of course there is a very negative side of that as certain portions of societies suffer. But if we are serious and for the past forty-four years that agriculture is important, we should understand why the US is criticizing China and Germany for different reasons but for manipulating their currency,” he queried.
“The two major labour intensive areas in terms of our economy is not gold nor oil gas but hospitality potential and agriculture. Let’s make it a little bit more attractive for them,” Henri Wietjis also asserted.
The Investment Opportunities Forum brought together key stakeholders in the private and public sectors to discuss challenges confronting Ghana’s investment regime and proffer solutions to address them to make the country an attractive investment destination.
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