GUTA advocates for renewed confidence and stability in the Ghanaian cedi
The Ghana Union of Traders Association (GUTA) is calling for renewed confidence and stability in the Ghanaian cedi to help the local currency stand firm against the dollar and other foreign currencies. In response to concerns about the dollarization of the Ghanaian economy, GUTA’s President, Dr. Joseph Obeng, emphasized the importance of Ghanaians exuding confidence in their currency.
The Bank of Ghana reports that from the beginning of the year to July 19th, 2024, the Ghanaian cedi depreciated by 19.6 percent against the US dollar, a slight improvement compared to the 22.1 percent depreciation during the same period last year. Despite this, Dr. Obeng highlighted that the primary issue is not about people trading in dollars but using the dollar as a benchmark for pricing.
If the cedi appreciates in value, there would be no need for traders to benchmark prices against the US dollar, leading to greater confidence in the local currency. This benchmarking often happens because traders import goods using dollars and find it safer to price their goods against the more stable US currency. Dr. Obeng noted that with a more stable cedi, traders would not need to rely on the dollar to determine the worth of their products.
The key to overcoming this challenge lies in boosting the value and stability of the cedi. When the currency stabilizes over a longer period, traders will be less inclined to use the dollar as a benchmark. The current fluctuation in the cedi’s value prompts traders to benchmark with the dollar to protect their capital and investments from depreciation.
Dr. Obeng’s call to action underscores the need for economic policies that enhance the stability and value of the cedi. By instilling confidence in the local currency, Ghana can reduce its reliance on the dollar for trade and foster a more resilient and self-sufficient economy.
