Government’s attempt to get hold of the country’s overall foreign exchange regime through the set up of the Foreign Exchange Developments Committee has been described by economist, Kwame Pianim, as a wrong approach that needs a rethinking.
The celebrated economist and investment consultant in an interview with Citi News said while the structure of the Ghanaian economy creates a disadvantage for the local currency, he believes that the approach in solving the perennial challenge must be led by a technical committee made up of FX experts commissioned by the central bank.
“We could have appointed a technical committee of experts to take a look and come back and give the government of Ghana advice or better still asked the governor to bring together a committee made up of foreign exchange management experts to spend full time to be able to achieve their aim,” he told Citi News.
He explained that the country’s quest to ensure it produces more for export is constrained by the fact that the cost of power is uncompetitive hence it is cheaper to import basic items that can easily be produced here in Ghana.
Mr. Pianim argues that unless the cost of power is reviewed, the country’s desire to boost exports in other to generate foreign exchange will not materialise.
Mr. Pianim said most of the members of the committee are busy people with other equally critical duties even in government and must not be bothered with serving on the committee.
“The focus is wrong. The committee is made up of some very competent people but they are too busy. The Minister for Agriculture [Owusu Afriyie Akoto] should be busy transforming agriculture. The Minister for Trade [Alan Kyerematen] should be busy sitting down with industry to decide the trade protocols.”
“I cannot see them contributing to anything. Let’s dissolve it,” he said.
Kwame Pianim also said the timing of the inauguration of the committee was wrong as the government should at this time be more interested in taking action for development rather than coming up with new ideas.
FX Committee inaugurated
The Finance Ministry last Thursday inaugurated a committee to look into the structural causes of the depreciation of the cedi and propose solutions to the problem.
The establishment of the committee, named the FX Developments Committee, is a fulfillment of a promise made by the Ministry last year to constitute a bi-partisan committee to look into the problem and help address it.
The Deputy Finance Minister, Charles Adu-Boahen who inaugurated the committee said it will work to complement the efforts of the Bank of Ghana in curtailing the usual poor performance of the cedi against other major foreign currencies.
“The formation of this committee is not to infringe on the independence of the central bank in its foreign exchange operations,” he said.
The formation of the committee has generated debate within the political circles as some have described it as unnecessary.
But the Ministry of Finance has justified the establishment of the committee.