Professor Lord Mensah has spoken out about the continuous free fall of the currency amidst the poor performance of the Ghanaian economy.
This week, the local currency has suffered another setback on the exchange market. A $1 is trading at GHS 9.46 with the possibility of crossing GHS10 by the close of the week according to finance experts.
Professor Mensah, who is the Associate Professor at the University of Ghana Business, stressed that critical measures should be taken to cushion the cedi to perform better.
He proposes that among other things, the government should encourage more exports and reduce the importation of goods, especially ones that can be manufactured locally.
He said, “Our policies have failed because they are not making the impact we want.”
“We need to reduce importation and do a lot more exportation. Another thing is that we must reduce expenditure.”
While the cedi continues to perform badly, the Bank of Ghana has increased the Monetary Policy Rate from 19 percent to 22 percent.
The last change in the policy rate was in May 2022.
This development follows a Monetary Policy Committee meeting earlier on Wednesday because of Ghana’s recent economic challenges.
The Bank of Ghana in a statement said it considered risks to the inflation outlook before increasing the policy rate.
In addition, the central bank raised the primary reserve requirement of banks from 12 percent to 15.
This increase is to be done in phases starting from 13 percent from 1st September 2022, 14 percent by 1st October 2022 and 15 percent by 1st November 2022.