Some economists have impressed on the government to cut down on its expenditure for the remainder of the year if it is to sustain gains in stabilizing the cedi against the dollar.
The comment comes as the Finance Minister, Ken Ofori Atta prepares to present the midyear budget review to Parliament next month.
They explain that the perennial issue can be rectified when efforts are geared at improving revenue while controlling expenditure.
According to the General Manager for GN Research, Samuel Ampah, the need to cut down on expenditure where necessary is to allow it space to reduce the access to money in circulation.
By this, inflation which is the rise in the general prices of goods and services as well as possible shortfall in supply of dollars, will be tamed to an extent.
“So we should see what really it is to help the government meet the revenue target because there is the high possibility for the government to spend. However if the government is unable to meet its revenue, it might have its own implications especially on the cedi side, we might have a lot more pressure on that,” he stated.
The depreciation of the cedi against major trading currencies for the past one month, has drawn a lot of concerns over claims that the government had tamed the depreciation of the currency.
As at Tuesday June 26, 2018, the cedi traded at 4 cedis 48 pesewas to the dollar on the interbank foreign exchange market.
The development has compelled the Bank of Ghana to disclose measures to stabilize the cedi’s losing streak.
According to the Director in Charge of Financial Markets Department at the Bank of Ghana, Steve Opata, the development is temporary.
He explains to Citi Business News the central bank is stepping in to prevent it from continuing.
Meanwhile like other economists, Samuel Ampah believes targeting long term goals of improving agriculture and tourism, will reduce imports and perennial shortage in dollar supply.
“So agriculture is one of the key things that we want to see a lot more investments in because that is where we could export some of our non-traditional exports to get foreign exchange.”
By: Pius Amihere Eduku/citibusinessnews.com/Ghana