An economist, Prof. Godfred Bokpin, has said that the cedi’s appreciation is not driven by strong economic fundamentals.
According to him, even though it is a good sign, he believes the appreciation will be short-lived.
“Because it is not driven by strong economic fundamentals, you cannot say it is going to last. But at least, what we have seen is good. It means the system is responding to the changes,” Prof. Bokpin said in an interview during a round-table discussion organized by the Citizen’s Coalition in Accra.
Bokpin charged the government to do more as the current debt exchange is not in a good shape.
“We have seen how the cedi is responding, but there is still a lot of work to be done. The Staff Level Agreement with the IMF is not the same as the programme. There is a lot of work because our debt level is unsustainable. The debt exchange in its current form is not in a good shape and may systematically weaken the balance sheet of the participating financial institutions,” he added.
He however urged government to ensure that the debt restructuring protects financial stability.
“If we are not careful, in our attempt to polish our public debt, we may be creating a crisis that will later come to bite us. Let us do the restructuring in a way that protects financial stability,” he noted.
“Because it is not driven by strong economic fundamentals, you cannot say it is going to last. But at least, what we have seen is good. It means the system is responding to the changes,” Prof. Bokpin added