Cedi fall: Where are you getting the $2bn from to inject into the economy?- John Kwakye asks gov’t

Finance Minister, Ken Ofori Atta

Director of Research at the Institute of Economic Affairs (IEA) Dr John Kwakye has questioned the government on the source of the 2billion dollars that it intends to inject into the economy.

The Akufo-Addo administration intends to inject $2billion into the economy to shore up the strength of the cedi against the major trading currencies especially the dollar.

Reacting to this development in an interview with TV3’s Alfred Ocansey, Dr John Kwakye said “In fact, when I hear that, I am asking myself, where is it going to come from? The President say they are going to pump 2billion dollars into the economy so my question is what is going to come from?

“The Finance Minister has said that our access to the international bond market is now restricted exactly because of the policy credibility issue that we have here, so I ask myself, is it going to be another Eurobond? Do they now see that they can access international Eurobond?”

Dr Kwakye further noted that he is against borrowing to shore up the strength of the Cedi because the loans will have to be repaid.

“Even talking about Eurobond, I have always had the problem with borrowing to support your cedi because one day the reversal will take place, you will have to repay the loan,” he said.

A Professor at the University of Ghana Business School, Lord Mensah had also said the government will achieve minimal results if it injects the 2billion dollars into the economy to support the local currency.

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Reacting to the crisis retreat by the government which ended over the weekend at Paduasi in the Eastern Region, Prof Mensah explained that “injecting such an amount of dollars into the economy will be minimal on the economy”.

“It is Insignificant to the economy”, Prof Mensah told 3FM Sunrise hosted by Alfred Ocansey on Monday.

Prof Mensah noted that A”a situation where we have about 80% of investments from the foreign companies…where did they get their investments from…the foreign markets…so whatever hits the foreign market affects us [Ghana].

“The economy needs to be restructured because we find ourselves in crisis”.

He explained that “prior to the covid-19 pandemic, internally, we had our own challenges and the global challenges”.

“You cannot say individuals cannot walk to a bank and take a loan for their own business. How many people were comfortable walking to a bank to take a load to build? How many small businesses were comfortable to take loans from the bank to expand their businesses?”

Prof Mensah said “our wives went to the market and told us that the things they used to buy had gone up”.

“These were all signals before the covid indicated that the economy was not getting better. These showed that the economy was not getting to the people. Then covid came in and I believe they [government] overestimated the economy before coming to power “.

By Laud Nartey|3news.com|Ghana