A stabilised exchange rate of GHC12 to the dollar does not indicate a rebounding economy – Gatsi

The Dean of the University of Cape Coast (UCC) Business School, Professor John Gatsi, has said that the current exchange rate of the cedi to the dollar does not indicate an economy that is rebounding.

The cedi is currently exchanging for GHC12.00 to $1.00.

According to Prof Gatsi, such a high exchange rate to the dollar is not indicative of economic growth.

“You do not just say that because exchange rate has stabilised at the highest level from about GHC6.00 last year to about GHC12.00, so, if it’s stable around GHC12, you don’t use that to tell Ghanaians that things are better for them and things would be better in 2026,” the Finance lecturer told Martin Asiedu Dartey on TV3’s Ghana Tonight Show on December 25.

He was reacting to an assertion by President Nana Addo Dankwa Akufo-Addo in his Christmas message that Ghana’s economy is rebounding.

The Finance lecturer contended that even the current inflation and policy rates do not show that Ghana’s economy is rebounding.

“When we say an economy has been messed up, and to correct that economy, it doesn’t take inflation reducing from 54% to 26% to indicate that things are better. When policy rate has increased from 14% to 30%. You don’t just look at headline inflation falling to 26% to think that you have solved the problem of the country when hardship, unemployment and poverty have doubled,” Prof Gatsi explained.

Reducing inflation from 54% to 26% does not mean economy is rebounding – Gatsi

The President, in his Christmas address to the nation had said Ghana’s relatively stable exchange rate with a drop in inflation is an indication that the economy was bouncing back.

“Fellow Ghanaians, I am particulary glad that our nation has turned the corner following three difficult years, we and indeed, the world have faced. Inflation is being reigned in, we are experiencing a relatively stable exchange rate, and growth in our economy is rebounding.

“We continue to attract investments, domestic and foreign, reinforcing our position as the  gateway to Africa and we remain a beacon of democracy, peace and stability in Africa. The country is not yet completey out of the woods, but there is a growing confidence that with hard work and determination, Ghana will make it and collectively, we will secure our future,” he said in his statement.

President Akufo-Addo continued that, “I remain committed to the mandate you freely gave me. I will use the last year of my stay in office, to do all in my power to continue to help create a free and prosperous nation of opportunities where every Ghanaian child, no matter the circumstances of his or her birth, has a fair chance to strive for a happy and dignified life and realise his or her aspirations.”

But the Professor of Finance and Economics said the President made that assertion because he needed to provide some assurance to the citizens as a Christmas message.

“He is giving a Christmas message, so he is only talking to just assure people. So what he is saying is not the reality,” Prof Gatsi stressed.