The Ghana Union of Traders Association (GUTA) has lauded the government on the downward trend of the exchange rate, saying that is crucial for an effective and timeous economic rebound.
A statement signed by the president of GUTA, Dr. Joseph Obeng, urged the government to continue with the efforts at tackling the current economic challenges, and take advantage of the reduction of the exchange rate to further reduce inflation and other costs of doing business in the country.
It also implored the business community to respond positively to the improved economic position of the country and adjust prices accordingly.
GUTA gave the commendation owing to its satisfaction with efforts by the government and the Bank of Ghana to bring down inflation and exchange rate.
Recommendations
Speaking in an interview with the Town Newspaper, Dr Obeng proposed some recommendations to the government to help inform its next action and to sustain the success.
He advised government to streamline the activities of forex bureaus as well as find a way of roping the ‘black market’ into the forex bureau system. He also proposed the adoption of other alternative currencies like the Chinese Yuan to reduce the pressure on the United States Dollar.
“We also want an immediate implementation of the roadmap set out to flush out illegal foreigners in the retail trade sector, and also make the tax system uniform and affordable in order to make compliance easy for businesses,” he said.
He also asked the Bank of Ghana to reduce monetary policy rate to an appreciable level to reduce the commercial lending rate and present a roadmap on how it would bring interest rate with realistic targets and periods.
It also wants the BoG to immediately introduce caps on interest cost, including hidden costs that increase annual percentage rates.
The GUTA president further stressed the need to sustain the appreciation of the cedi, and adjust the Customs valuation rate to reflect the current trend of the exchange rate.
That, he indicated, would give meaning to the gains made, as well as give respite to the business community and all stakeholders, while managing unnecessary speculations.
Having expressed gratitude to the government for its efforts so far, he said GUTA looked forward to relief being brought to businesses, leading eventually to the economic transformation the country so desired.
Dr Obeng bemoaned that inflation still remains high and above targets in the country, hampering the survival of businesses in Ghana.
He said “policies to fight against inflation should be complemented by income support measures such cash or food transfers to protect the most vulnerable from stubbornly high inflation”.
Gains made
Last week, the cedi gained across the major trading currencies in the foreign exchange market following progress on Ghana’s negotiations with its bilateral creditors.
It gained 10.27% week-on-week against the US dollar in the retail market to close at a mid-rate of ¢10.95 to one US dollar on Thursday, April 6, 2023.
Similarly, the British pound and the euro both lost 0.19% week-on-week to the cedi on the interbank market. On the spot market, the cedi gained 5.99% w/w against the dollar to trade at GHC10.85 reducing its year to date (YTD) loss to 1.20%.
Aside from the central bank’s interventions and lower demand for the cedi, Constant Capital – a market observer – believes that commitments from the Chinese government to help Ghana restructure its bilateral US$1.7 billion debt to the Asian giant also aided in the domestic currency’s recent strength.
Also, inflation for March 2023 fell sharply to 45% following some deflation recorded by the Food and non-alcoholic beverages group.
This represents a 7.8 percentage point decrease over the 52.8 percent recorded in February 2023 and higher than the rate recorded in March 2022.
This is the third consecutive decline in the national inflation rate after a marginal drop in February’s rate.
This was conveyed in the Consumer Price Index (CPI) data released by the Ghana Statistical Service (GSS) on Wednesday.
Per the data, food inflation was 50.8% representing a -0.9% decline recorded from an initial 59.1% in February while non-food inflation was 40.6% from an initial 47.9% recorded in February representing a -1.5%.
Per the data, inflation for locally produced items was 41.9% while the inflation for imported items was 51.6% from an initial 49.0% and 62.3% recorded in February respectively.
At the regional level, the Western North region recorded the highest rate of inflation at 67.3% whilst the Volta region was the least with a record of 25.6%.
