Cedi depreciation troubling - Traders lament

Traders in the country say the current trend of depreciation of the local currency (the Cedi) against its major trading partner, the Dollar, is affecting their capital, with many businesses operating at a loss.

They said the decrease in value of the Cedi, which had caused their capital to dwindle by 16 percent from December 2021 could cripple businesses if the Government failed to urgently address it.

Depreciation of the Ghana cedi almost doubled in the first week of March to 14.21 percent since the beginning of the year. This is against 7.6 percent recorded at the end of February 2021.

Dr Joseph Obeng, President of the Ghana Union of Traders’ Association (GUTA), told the Ghana News Agency that in December 2021, when the rate of the Cedi to a dollar was GH¢6.40, a trader could use GH¢640,000.00 to buy US$100,000.00.

However, he said: “Today, as the rate is about GH¢7.60 to a dollar, the same GH¢640,000.00 can buy only US$84,000.00, thereby, making a loss of US$16,000.00, which is the 16 percent depletion. Therefore, if one still wants to buy US$100,000.00, he/she needs to find additional GH¢120,000.00 to top up within this short period.”

Charles Gyan, a kitchenware importer, said: “As we speak, we’re losing about 16 percent on our capital… If you lose your capital in this manner, and borrowing is very expensive then you’re at a loss.”

He indicated that though the Government had done some work to stabilise the local currency, “the current trend at which the Cedi is depreciating is very worrying, because it is going to increase prices.”

He noted that the development: “Is worsening the cost of doing business, and it will make consumers run away from our products, which is a big problem for us. Because we cannot even do any proper projection as the rate keeps changing.”

He said: “This is pushing us to import less; sales is bad because the Ghanaian do not have that capacity to buy much, and this is eating into our capital, so we’re likely to reduce our import by about 20 to 30 percent soon.”

Mr Samson  Awingobit Asaki, Executive Secretary of the Importers and Exporters Association of Ghana, also said: “One cannot say he’s able to move in cargo in this first quarter compared to last year same time because of the Cedi depreciation.”

He said considering that many businesses were importing from China lately, the Government should introduce the Yuan [Chinese currency] in the commercial banks so that it would promote easy transaction for the traders to get access to Chinese currency.

The traders urged the Government to closely work with all relevant stakeholders to urgently find remedial solutions to the Cedi depreciation to lessen the burden on the business community and consumers.

They also asked the Government to give them some indications at the Port on a monthly basis to help them do projections and plan well.

The President, Nana Addo Dankwa Akufo-Addo, sharing in the concern of traders last month said: “I’m aware of the anxiety there is in the business circles and throughout the population about the recent depreciation of the Cedi.”

He added that: I’m extremely upset and anxious about it too. But I want to assure you that all efforts are being made to arrest the decline and restore the Cedi to stability in order to improve the competitiveness of the Ghanaian industry and I think very soon you will see some results.”