Dollar injections can’t fix the cedi – MP warns

The Deputy Ranking Member of Parliament’s Economy and Development Committee, Tweneboah Kodua Fokuo, has warned the government against over-relying on foreign exchange interventions to stabilise the cedi.

Speaking in an interview, Mr. Fokuo noted that the recent appreciation of the cedi was driven by temporary global factors not by any fundamental improvements in Ghana’s economy.

“The reality is what we’re seeing now with the cedi’s depreciation. We had said earlier that the gains in the currency were not the result of real structural changes. Nothing significant had been done to transform the economy to support a stronger cedi,” he explained.

According to him, the temporary strengthening of the currency was largely due to favourable global conditions and reduced government spending, not effective domestic policy.

He further criticised the government’s strategy of injecting dollars into the market to shore up the cedi, warning that such interventions, without a clear economic strategy, are only short-term fixes.

“Foreign exchange interventions are meant to be temporary. You cannot stabilise the cedi just by pumping in dollars without a structured and strategic plan. At some point, market forces must be allowed to function,” he stressed.

Mr. Fokuo urged the government to focus on long-term reforms that address the underlying weaknesses in the economy, rather than relying on quick fixes that offer no lasting solution.