The Government of Ghana has
strongly hit back at claims by some
international news outlets that the
country's economy is a state of
crisis and the cedi “the worst
performing currency in the world in
2014”, saying the reports are wholly
inaccurate.
Government was particularly
unhappy with some publications by
French news agency Reuters as
well as UK-based Financial Times,
accusing the two reputable
international media of
misrepresenting the facts to create
the impression that the Ghana cedi
has fallen by 40 percent this year,
insisting the cedi has fallen by
22.9%.
In a statement issued in Accra on
Tuesday and signed by the Minister
of Communication, Dr Omane
Boamah, which sough to correct "a
few basic errors of fact in these
stories", government clarified that
(based on Bank of Ghana figures),
"the cedi traded at 2.34 against the
US dollar in January 2014, and as of
Friday 1st August, 2014, it stood at
3.035 to the US dollar, reflecting a
cumulative depreciation of 22.9%
over the period”.
Read the full statement below:
CLARIFICATION ON STORIES ON
GHANA AND THE IMF
The Government of Ghana has
taken note of the recent stories in
the international and local media
regarding its decision to open
negotiations with the International
Monetary Fund for assistance.
While we appreciate the continuing
interest of the media in Ghana’s
affairs, we wish to correct a few
basic errors of fact in these stories.
It was reported by Reuters on 3rd
August 2014, that the Ghanaian
cedi had “fallen by around 40
percent against the dollar this
year”.
This is incorrect.
According to Bank of Ghana, the
cedi traded at 2.34 against the US
dollar in January 2014, and as of
Friday 1st August , 2014, it stood at
3.035 to the US dollar, reflecting a
cumulative depreciation of 22.9%
over the period.
It was also noted that the economy
grew by 7.0% in 2013, instead of
the correct figure of 7.1%. While the
difference may seem trivial, it is
important to point out the error for
two reasons: (1) to promote
accuracy as a matter of record, and
(2) to highlight the fact that even
fractional changes in an economy
have significant implications.
Similarly, the Financial Times’
headline of “Ghana Seeks IMF Help
after currency falls 40%" also
repeats some of the misrepresentati
ons in the Reuters story, with some
hyperbole too. The paper makes the
erroneous claim – which has since
been repeated by other media
houses – that the cedi is “the
worst performing currency in the
world in 2014”.
Subsequently, some commentators
have twisted this headline to say
that Ghana’s economy is the worst
in the world, despite strong
positive growth accross all sectors
of the economy last year and so far
this year.
As proof, the Financial Times adds
that the cedi’s fall is “a bigger slide
than even the war-ravaged
Ukrainian hryvnia and the Syrian
pound”. What it failed to mention
was that unlike Ghana, which for
decades has had a market-determin
ed floating exchange rate regime as
well as a liberalised capital account
(which allows unhindered
repatriation of profits), Syria has a
fixed exchange rate regime, with
capital controls. Ukraine also
maintains a “managed float” regime,
after years of a fixed rate regime
that artificially kept the currency
strong. Therefore, any comparison
across these three currencies is
misleading, at best.
The fact that one Ghana cedi, as of
3rd August 2014, could buy 29.5 US
cent, while one Syrian pound could
buy less than one US cent and one
Ukrainian hryvnia bought only 8 US
cents is positive proof that the
Ghanaian economy is fundamentally
strong and has bright medium term
prospects despite its short-term
challenges. We are working
assiduously to address these in a
"Home Grown" fiscal consolidation
plan that we have already
submitted to the IMF.
We wish to assure all journalists,
both local and international, that
our doors are always open for them
to fact-check their stories with
relevant sector ministries before
they publish them. This would do
as much good for their reputation
as it would the quality of discourse
that often relies on their stories.
Signed:
Edward K. Omane Boamah (Dr)
MINISTER FOR COMMUNICATIONS
Source: Peacefmonline.com/Ghana
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