Following the recent arguments over the issue of devaluing the Ghana Cedi, Prince Kofi Amoabeng, the Group Chairman of UT group of Companies, in a recent statement gives 3 reasons why Ghana’s currency should not be devalued. He was of the opinion that it was quite unnecessary to devalue it as it is always in a floating state. Amoabeng as it appears, shares the same opinion with the BoG Governor, who equally said there was no need to devalue the currency. Just like BoG Governor, he said that Cedi’s devaluation was dependent on market forces, stating the three reasons why he thinks it should not be devalued.
First, as was mentioned earlier, he said that the currency is floating, as there are factors of demand and supply. meaning that, the devaluation is also dependent on these factors.
The currency is floated; we have a floating foreign exchange currency regime. So depending on supply and demand, we will move in one way or the other which means it subjected itself to devaluation,” he said on the first reason.
Secondly, the Ghana Cedi has already indirectly been devalued over the years. He pointed out that there has been a 75 percentage of decrease in the Cedi value, as a Cedi was equivalent to a dollar, but currently 1 Ghana Cedi is equivalent to 4 dollars, hence the devaluing is unnecessary.
Thirdly, with Ghana being a country which does more of import than export, he said that the currency should not be devalued as that would increase the rate at which the country imports goods from foreign countries. ‘
Then the third reason is we are an import-based economy. So we don’t export much; everything comes from the import. If we devalue its means imports are going to get more expensive. This is because the fact that you devalue does not mean you will increase your export because it is not elastic enough to respond to the rate of devaluation. And that will make things more expensive as prices go high, therefore why the need to devalue.” he said.
The issue of devaluing of the Ghana Cedi became a matter of importance when Vice President Kwesi Amissah Arthur suggested its implementation to West African Countries.
Mr. Prince Kofi Amoabeng who is also the co-founder of the UT Group of companies announced his retirement in November 2015. He equally trashed the predictions of some financial analysts that Cedi would rise to 6 dollars by the end of 2015.