Economist, Courage Boti has attributed the free fall of the Cedi to among other things, the excessive expenditure before and during the advent of COVID-19 as against the poor revenue mobilization targets through the e-levy and others.
The cedi has depreciated against the dollar, trading at 9 cedis per dollar.
The sharp fall from 6 cedis at the beginning of the year, to 9 cedis now, has had a major impact on importers in particular, with a far-reaching effect on the purchasing power of consumers.
Courage Boti tells Citi News that managers of the economy failed to take remedial measures to revert the poor performance of the cedi.
“I thought we missed an important opportunity in November when we were reading the budget to try to address the market. Clearly, during the Covid-19 era, we spent monies we did not have, coupled with the energy sector problems and financial sector clean-up. We exceeded our budget. It will take about 3 to 4 years of rationalization to bring things back to normal.”
“After Covid-19, we could have streamlined expenditure to make up for the excess expenditures we had in the past.”
Courage Boti shares, with Citi News, some ideas the government should adopt, to arrest the cedi.
“Having done all these, the natural thing going into consolidation would have been to have an IMF bus stop, where we had policy guidance and balance of payment support. If we were under such programs in 2021 and 2022, it would have guaranteed fiscal discipline which the market will trust and balance of payment support that can reassure investors that they are safe.”
“The harm has been caused, the first solution is to accelerate the conversations with IMF. This will depend on our transparency and the amount of information we are willing to give.”