Ghanaians Help to Devalue Their Currency
By Ebenezer Awuah
Foreign visitors entering Ghana for the second time during the past six months or so or shall definitely find a big difference in the cost of goods and services. The difference is a big leap in prices and one may wonder if a trader or service provider is cheating him/her because one has to pay more cedis now for the same service or product one bought about six months ago.
The remote cause of this change has been attributed to a war going on between two far-off countries, and the resultant effect of that war is the increase in prices of imported products and subsequent rise in local prices that we all see.
Ghana is not an oil producing country. She imports crude oil from foreign countries that produce crude oil. The disturbing factor is that the prices are not stable and keep increasing always due to factors known to the producing countries.
Whenever prices go up on the international market prices automatically go up on the local market; that is fuel and other lubricants’ prices go up at the filling stations. This causes transportation fares to be increased and subsequently affect the prices of goods and services. It is a spiraling sort of thing in an economy they call inflation.
A lot of hullabaloo has already taken place about the cause of the increasing prices of goods and services in the country. Whilst the government blames it on the effects of the war many believe it is bad management from the ruling government.
Traders always want ways of making extra profit and so situations like this bring opportunity for them to increase prices and turn round to blame the government. This is truly what is happening in Ghana now.
The price of every godamm thing has been increased and you will marvel at what is happening in the country. You need to spend more cedis now for the same service or product you purchased some six months ago. Citizens everywhere are now complaining about high prices of goods and services.
Another way Ghanaians have devalued their currency is the dollarization of the economy by which some big-time companies designate their products or services prices in dollars. The Central Bank fights periodically against this practice but some companies remain adamant to the Bank’s directives.
Of late the rate of exchange for the US dollar has risen beyond tolerable limits, causing some level of anxiety among Ghanaian importers and local traders.
Some Forex bureau operators and black market dealers also compound the problem in subtle ways to make the price of the dollar high in a strategy to make more profit.
All these have gone beyond the control of Government and compelled it to seek foreign assistance to mitigate the problem. They have contacted the IMF to come to Ghana’s assistance with substantial amount of dollars to help revive the economy. It is hoped that the amount shall be prudently managed to achieve the objective of going to the IMF for the bailout.