Govt’s financial decisions to blame for Cedi’s rapid depreciation – Ato Forson

The Minority Leader, Dr Cassiel Ato Forson, says the government’s financial decisions are significantly contributing to the rapid depreciation of the Cedi.

The business community and trade unions have raised numerous concerns about the free fall of the Cedi against the US dollar which as of Thursday [May 16] morning was trading at GH¢15 to $1.

The Minority Caucus in a press conference on Wednesday, May 15, disclosed that the government paid contractors an amount of GH¢7 billion outside of the 2024 budget, which they say has been used to purchase dollars, further weakening the strength of the Cedi.

Speaking to the host of the Citi Breakfast Show, Bernard Avle, on Citi FM, the Minority Leader said the government’s actions have led to a more than 70 percent depreciation of the Cedi since July 2022.

“Since 2022, the Cedi has depreciated more than 70% and the current problem is primarily a result of how the government is spending.

“In the last month, the government has borrowed over GH¢7 billion from the T-bill market and used this money to pay contractors who have also purchased dollars hoping that the Cedi will depreciate and so even if you go to the market to buy dollars, you struggle to get it and this is because people lack confidence in the economy.”

“The Ministry of Finance is approving these payments, and the contractors are using it to buy dollars and it is easy to track this. Unless you are not watching the fiscal space, you will see that these monies are used to buy dollars.

“My concern is that it is coming at a time when we have defaulted on our external debts, and since we have defaulted on it, one would have thought we should be seeing a lot of forex, but that is not the case,” Dr. Forson added.