Things are falling apart as the $ nears ¢10; Dr Nii Amu Darko writes0
- Ghana Cedi is in tatters, declared the world’s worst performing currency by Bloomberg.
- Cedi had plunged by 2.7% to a record low on Monday on the foreign exchange market.
- Real wages and salaries continue to reduce as prices of goods and services surge upward.
- Ghana Cedi is the world’s worst-performing currency.
My great friend sent me a Ghanaweb news item that quoted Dr. Joseph Obeng, President of Ghana Union of Traders Associations (GUTA) saying that, he suspects the free fall of the cedi is a deliberate government plan.
I share with you my slightly edited response to him.
I disagree with Dr. Obeng, the President of GUTA. This government is catastrophic but not that insanely stupid to cause the free fall of the cedi deliberately. What’s in this for the government? What’s the motive for such a suicide mission?
When the fundamentals are weak, the exchange rate will expose you. That’s true, and that’s what we’re seeing.
1. Our balance of payment is deep negative
2. Our fiscal deficit is deep negative.
3. We have no or limited access to international capital markets
4. We have to print more money to “plug” the hole in the fiscus
5. Deceitful budget leading to loss of confidence in our country
6. Multiple downgrades by credit rating companies causing investor fright
7. Flight of investor capital because of fright above: panic withdrawal-to-safety
8. Speculation and further withdrawals
9. Local purchase and storage of $ by the rich in town
10. Fear of depletion of reserves to shore up the cedi.
All the above will lead to a vicious cycle of depreciation. Things will fall apart. The centre will very soon no longer hold.
All the above are due to the CIA:
1. Corruption
2. Incompetence
3. Arrogance.
All the above were predicted by me a day after the budget was delivered. It’s not hard, is it? I’ve advised ever since how to tackle all the above listed problems, but the government is in CIA custody. It doesn’t know how to come out.
Am l saying China flu and Russia throwing Christmas knockouts into Ukraine have no role to play in the mess? No. They have no role to play. Friends, I live in Melbourne, Australia, the most locked down place in the whole world. Unemployment is 3.5%, lowest in more than 50years. The currency is at the same rate pre- China flu and the Christmas knockout war. Life is back to normal.
The difference between.Ghana (CCC+) and Australia (AAA) is found in Matthew 7:24-27
“Therefore whoever hears these sayings of Mine, and does them, I will liken him to a wise man.who.built his house on the rock: and the rain descended, and the floods came, and the winds blew and beat that house, and it did not fall, for it was founded on the rock.
But everyone who hears these sayings of Mine, and does not do.them, will be like a foolish man who built his house on the sand: and the rain descended, the floods came, and the winds blew and beat that house; and it fell. And GREAT was its FALL.
Yentie obiaa and old dog Presidents create C grade super junk economies. It’s that simple.
AAA economies don’t fall. Super junk C grade economies fall, and great is their fall.
When the fundamentals are weak, the exchange rate will expose you. When you build your economy on sand, China flu and the Russian-Ukrainian war will expose you.
“Wesleyan” Bawumia and Born-again Ofori-Atta should know this truth, shouldn’t they? Dead brains.
Tswa omanye aba.
Nii Amu Darko
President, ARMI
16/08/2022.