David Ofosu-Dorte, the Executive Chairman of AB & David Law, is worried about something happening in Ghana's money world. He thinks that if the value of the dollar keeps dropping too much, it could lead to a lot of dollars being sold off quickly. This is important because it could shake up the financial markets in Ghana.
Recently, the cedi, which is Ghana's currency, has been doing really well against the US dollar. Since January 2024, it has gone up in value by 22%! But even with this good news, prices for things we buy (inflation) are still pretty high at 23%. This means that even though the cedi is stronger, the cost of living is still tough for many people.
Right now, banks in Ghana have enough dollars saved up, and they’ve noticed that the demand for dollars has dropped by 40% since March. Importers, who bring goods into the country, are feeling a bit hopeful but are still being careful with their dollar holdings.
Experts are saying that instead of rushing to sell off dollars, it’s better to convert them slowly. If everyone panics and sells their dollars all at once, it could mess up the progress that has been made.
Mr. Ofosu-Dorte believes that Ghana needs to make some big changes to its economy. He pointed out that we rely too much on bringing in goods from other countries (imports). He mentioned that while it’s important to sell more things to other countries (exports) and make more stuff ourselves (manufacturing), he didn’t hear any clear plans on how to do this from former President John Dramani Mahama’s recent ideas shared at a summit.
He also talked about three important things that need to be addressed in our economic discussions:
He asked, “What are we doing to change our attitudes as a people?” When the dollar goes up, we quickly raise prices, but when it goes down, we don’t lower them. This shows a problem in how we think about buying and selling.
Mr. Ofosu-Dorte prefers to have rules and plans that help us stick to good practices instead of relying on outside help from organizations like the IMF every few years.
He agreed with the Governor’s point about needing stability but emphasized that we need clear guidelines to avoid sudden changes in the market.
In summary, while the cedi is doing better against the dollar, there are still many challenges ahead. It’s important for everyone, from banks to everyday people, to think carefully about how they handle money and to work together for a stronger economy.