Ghana: Depreciation of cedis not unprecedented – Oppong Nkrumah
March 09, 2017
New Patriotic Party (NPP) Member of Parliament for Ofoase-Ayirebi, Kojo Oppong Nkrumah says the current depreciation of the cedi being experienced in the value of the cedis is not unprecedented. He says the fall in the currency’s value in the first quarter of the year is a recurring problem that happens every year. The value of the cedis is estimated to have depreciated by 6 percent since the NPP took over power in January this year, raising concerns among business operators. Quoting statistics from the Bank of Ghana (BoG) Currency Monitoring reports (2000–2016), the MP who is also a Member of Parliament’s Finance Committee said the value of the cedis depreciated at an average of 5 percent over the 16 year duration.
Mr. Oppong Nkrumah attributes this to high levels of importation as the previous year draws to a close, and the practice of multinational companies mobilizing their profit and repatriating it out of the country at the beginning of the new year. He said the value of the cedis depreciated by 18 percent in the first quarter of 2000, 11 percent in 2009, 17 percent in 2014, and 15 percent in 2015. “The average over the years for quarter one is five percent. Nothing untoward has happened. My fear is that in our bid to meet our own exigencies, we may set a lot of panic in the system. And I think we should stay away from that,” he said.
Mr. Oppong Nkrumah was contributing to the debate on the floor of parliament on the 2017 budget statement delivered to the house last Thursday by Finance Minister Ken Ofori Atta. Mr. Oppong Nkrumah expressed confidence the 2017 budget statement has the capacity to fix the economic challenges the country is currently facing including high debt, expenditure overrun, revenue underperformance, falling growth and limited capital investment. “The substantial problems that were identified at the baseline of the budget have been tackled,” he said.
Mr. Oppong Nkrumah also dismissed claims by the minority that the planned scrapping of some taxes will encourage the importation of goods and defeat the plan by the current government to industrialise. “If you look at the taxes we are cutting; on financial services, kayaye, raw materials, these are not taxes that will stimulate imports. Indeed these are taxes which when cut will take the burden off the private sector to enable them be a lot more productive, make profit and pay income taxes,” he said.
The MP also commended the plan by the Finance Minister to establish a National Entrepreneurial Innovative Programme. He is confident this will boost the culture of entrepreneurship and help create jobs for young people. He is thus rallying support from all sides of the house for the 2017 budget statement. “This is a good budget and my prayer is that we all support it so the benefit accrues to the benefit of the people of Ghana,” he said whiles concluding his submission on the budget.