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Energy crisis blamed for Ghana’s economic challenges

Ghana Cedis

Ghana Cedis

An Economist at the University of Cape Coast, John Gatse is blaming the current challenges facing Ghana’s economy on government’s inability to mobilize Internally Generated Funds (IGF) and on the rampant energy crisis.

He was speaking with the Afia Pokua the Vim Lady on Adom FM’s “Burning Issues” program which was also transmitted live on Asempa FM.

The fast fall of the local currency has baffled managers of the economy and frustrated import and export businesses, and also affected students pursuing international programmes that depend on foreign currencies.

Currently, the US dollar, which sold at Ghc2.20 on the local foreign exchange market before Christmas last year, now sells at Ghc2.60. The British pound, which sold at Ghc3, now sells at Ghc4.20. The euro and CFA are also selling at Ghc3.50 and Ghc4.80 respectively.

The Bank of Ghana (BoG) has therefore announced additional measures to shore up the cedi against the major foreign currencies.

As part of the measures, it has banned commercial banks and other financial houses from issuing cheques and cheque books on Foreign Exchange Accounts (FEA) and foreign currency accounts (FCA).

It has also directed that no bank should grant a foreign currency-denominated loan or foreign currency-linked facility to a customer who is not a foreign exchange earner.

The central bank has also prohibited offshore foreign deals by resident companies, including exporters in the country.

But John Gatse said government must do its best to stabilize the economy by strengthening its ability to manage the internally generated revenue to cushion the effect of other economic programs the country has.

“Actually if you want to proffer specific solutions, then you would be talking about tackling the structure of the economy but I will say clearly what we are facing now is currency crisis or currency challenge and financial challenge so if you want to deal with such an issue, then we should deal with the issues of deficit to avert the situation” John Gatse emphasized.

He noted that all the sector ministries have a master program for all the projects in the country and capable human resource to manage such policies but the implementation needs a critical attention.

Gatse said some countries had gone through challenges like that of Ghana and their economy broke down but he believes Ghana’s economy is “very resilient”.

Commenting on the controversial prayer by the General Overseer of the Action Chapel, Archbishop Nicholas Duncan-Williams to save the local currency, he said “we manage economy with policies, focus, determination and programs but it will be naïve for me to say people cannot pray for clear directions on how the economy should be managed.

He stated that no one can discount the value of prayer in nation building and economic management but it does not mean that prayer can do everything for the nation.

The economist says Ghanaians should not ridicule men of God who can pray for the leaders of the country to be able to have a clear foresight to manage the economy.

Source: Myjoyonline

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  • ejoma / 2014-07-23 09:58:10

    APC party!!! what is your problem with jonathan at least by now you should have agreed that he will...

  • frank / 2014-07-22 17:51:05

    The potag president must be firm and request for the book & research. If indeed Ghana is broke...

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