GUTA President, economist urge caution and structural focus amid cedi stability

The President of the Ghana Union of Traders Association (GUTA), Joseph Obeng, and economist Kojo Poku of the Centre for Social Policy Studies at the University of Ghana have weighed in on the recent stability of the Ghanaian cedi, offering contrasting but complementary insights on how the country should navigate the moment of economic calm.

Speaking on the Asaase Breakfast Show on Friday (9 May), Obeng commended the recent strengthening of the cedi, describing it as a development that offers hope and relief to the business community.

He noted that the stability is fostering positive speculation and encouraging traders to reduce their reliance on foreign currency, which in turn may feed further gains for the cedi.

“This is going to ensure that people bring their money back into the market,” Obeng said. “It’s a good sign for the economy, but it must be sustained through discipline—both fiscal and monetary.”

He credited the Bank of Ghana and the Finance Ministry for working in unison following the recent National Economic Dialogue, where GUTA and other stakeholders offered practical recommendations.

“There is some kind of discipline that is going on. We believe they are listening and working towards the recommendations,” he said, adding that recent increases in Ghana’s reserves have contributed significantly to the cedi’s performance.

However, economist Kojo Poku took a more critical view, warning that the cedi’s stability could be short-lived if not properly managed. He pointed to external factors—particularly global crude oil prices and the weakening of the U.S. dollar due to Trump-era tariffs—as the main drivers of the cedi’s recent performance rather than local policy.

“This is not the highest we’ve ever had in reserves. When turbulence comes, we’ll need those dollars,” he cautioned.

Poku expressed concern about the Bank of Ghana’s policy posture, stating, “The Bank of Ghana is the weakest link in Ghana’s development.” He argued that the central bank’s current approach favours short-term exchange rate gains over long-term productivity and employment generation.

“What we need is not an appreciating cedi. What we need is a stable cedi,” he emphasised, adding that stability allows producers and exporters to budget and plan better, which drives job creation and economic growth.

He also challenged the impact of the domestic gold purchase policy introduced by former Vice President Mahamudu Bawumia, saying, “There’s no empirical evidence that it’s had a real impact. It’s a neutral policy—it’s just converting one currency into another.”

Both experts agreed that food inflation remains a persistent problem driven more by supply-side constraints—like poor road infrastructure and transportation bottlenecks—than monetary factors.

“Even if I earn more, I won’t suddenly buy two bags of rice,” Poku said, pointing out that food demand does not scale linearly with income, and therefore inflation in that sector must be addressed through agricultural investment and logistical improvements.

The two voices, while differing in tone, offered a united front on the importance of policy coherence, fiscal discipline, and long-term structural reforms to secure and sustain economic gains.

“If we don’t take advantage of these gains now, we’ll slip back again,” Obeng warned.

Their comments come as the Bank of Ghana and economic managers face growing public pressure to ensure that recent improvements in the exchange rate and inflation figures are not just temporary reprieves but the start of a broader recovery.