The Executive Director of the Institute of Economic Research and Public Policy (IERPP), has questioned the sustainability of the cedi’s recent appreciation, suggesting that the government’s claim of prudent economic management may be masking artificial interventions.
Speaking in an interview, Professor Isaac Boadi said while the currency’s reported 40% appreciation was a welcome development, the government had failed to explain what had truly driven the gains.
Prof Boadi argued that the appreciation may have less to do with sound policy and more to do with reduced public spending and controlled interventions in the forex market.
“Tell me the activities that have contributed to this. People say prudent management, they should tell us what that is,” he said.
“When you’re not spending huge amounts on projects, these are the things you talk about,” he noted.
“Even the IMF questioned this. Their report asked the government to review its footprint in the forex market. That tells you something – some of the gains may be artificial.”
The mid-year budget review, presented by Finance Minister Dr Cassiel Ato Forson, has been met with mixed reactions, particularly around claims of macroeconomic stability.
While the government credited its fiscal discipline and external support for the currency’s strength, critics like Prof Boadi argue that market forces have been suppressed, skewing the real picture.
“Let the demand and supply interact. If you don’t, what you’re doing is artificial,” he warned.
