Cedi Stability Reduces Cost Of Imports, Eases Debt Burden – Economist

An economist, Mr. Osei Kwaku Tuah, says stabilising the Ghana cedi plays a critical role in making goods more affordable and reducing the cost of servicing the country’s debts.

Speaking in an interview with Kofi Boakye on Nkwantannanso on Opemsuo FM, Mr. Tuah explained that a stable currency lowers the cost of importing essential items, especially machinery needed for industrial growth.

“When the cedi is stabilised, it makes goods less expensive. We are able to buy machines that are not produced in the country at a cheaper price, which supports industrialisation,” he said.

He further noted that currency stability has significant implications for Ghana’s external debt obligations, particularly those denominated in foreign currencies.

“We have both international debt and domestic debt. When the cedi is stable, it prevents us from using a large amount of cedis to service our international debt,” Mr. Tuah explained.

According to him, although the foreign debt amount remains unchanged, exchange rate stability reduces the pressure on government finances.

“Even though the amount owed is the same, you will not need many cedis to convert into foreign currency to settle the debt,” he stated.

Mr. Tuah added that the reduced need for excessive cedi conversions ultimately allows government to conserve funds that could be channelled into other sectors of the economy.

He stressed that maintaining currency stability is essential for managing both import costs and debt obligations effectively.