Home Economy If government fails to act, we shall protest over cedi depreciation – GHAFET Warns

If government fails to act, we shall protest over cedi depreciation – GHAFET Warns

We call upon the government to prioritize the needs of businesses and take decisive steps to lower the exchange rate

by Vesta Daily
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If government fails to act, we shall protest over cedi depreciation - GHAFET Warns

The Ghana Federation of Traders (GHAFET) has issued a warning, stating that if the government does not act to lower the exchange rate in the next two weeks from GHC 15.50 to GHC 10 per dollar, they will hold a statewide rally.

In a press release dated May 26, 2024, the seven business associations said that the depreciating cedi is damaging merchants’ and companies’ capital.

“We demand that the government give businesses’ needs top priority and act swiftly to reduce the exchange rate, giving faltering businesses a lifeline.” The statement said, “If the government does not act quickly to address the problem in two weeks, we will organize a massive nationwide demonstration.

Even though the government has promised to stabilize the economy and exchange rates, they feel that not enough is being done to address the issue.

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The Abossey Okai Spare Parts Dealers Association, a traders advocacy group in Ghana, the Automobile Dealers Union, the Ghana Union of Textiles and Garments, the Ghana Union of Beauty and Cosmetics, the Ghana Union of Second-Hand Refrigerator Dealers, and the Ghana Union of Second-Hand Clothes are the seven business groups.

GHAFET examined how the cedi performed against the dollar under different regimes, pointing out that in 2008, it was worth GHC 1.057, in 2012, it was worth GHC 1.972, and in 2016 it was worth GHC 3.945.

It has increased to GHC 15.17 under the current administration, severely hurting consumers, company owners, and livelihoods.

The cedi was worth GHC 1.057 to the US dollar in 2008. GHC was recorded at 1.972 to the dollar in 2012 and 3.945 to the dollar in 2016. Under this present regime, the rate has increased dramatically from GHC 3.945 to GHC 15.17, which is disgusting to all business owners, and customers, and generally affects livelihood, according to the statement.
If the government does not take immediate action to stop the devaluation of the cedi within the next two weeks, the Ghana Federation of Traders has called on all business owners, associations, trade unions, and impacted Ghanaians to join them in protesting against the government.

In comparison to the US dollar, the Ghanaian currency depreciated by 22.73% by April 2023, and as of the first four months of 2024, it has lost almost 10% of its value.

In an attempt to stabilize the cedi, the Bank of Ghana will auction $120 million to BDCs in the second quarter of 2024; but, the need for dollars by businesses could make this endeavour more difficult.

Even with a policy rate of 29% and average lending rates above 32%, concerns about currency volatility persist.

Governor Dr. Ernest Addison, however, has voiced hope, pointing to robust reserves from increased remittance inflows as a safety net for the stability of the Cedi in the upcoming months.

Vesta Daily
Author: Vesta Daily

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