Joe Jackson: Weak export value retention hurting cedi
Joe Jackson, Chief Executive Officer of Dalex Finance, says Ghana’s currency weakness is less about imports exceeding exports and more about weak domestic retention of export earnings.
Speaking on Channel One TV’s The Point of View with Bernard Avle on Wednesday, April 1 on the theme “Debunking Two Myths about Ghana’s Economy,” Mr. Jackson challenged the popular narrative that Ghana’s cedi has fallen mainly because the country imports too much and exports too little.
“For starters, let’s all agree on this. If exports exceed imports, the cedi would normally appreciate. If imports are higher than exports, the cedi would be under pressure because there are not enough dollars. On the flip side, if you import too much, the cedi will depreciate,” he explained.
However, data from Ghana’s trade balance over the last eight years tells a different story. From around $1.1 billion in 2017, the trade surplus grew to over $5 billion by December 2024. Despite this, the cedi fell sharply, moving from 4.5 to a dollar in 2017 to 14.7 cedis by the end of 2024 – a depreciation of more than 200 percent.
“There’s something going on, and it cannot be simply explained by ‘export more, import less.’ We’ve been exporting more for all these years. Nothing has changed. When I drilled deeper, I came to one conclusion: this issue is less about imports and more about weak domestic retention of the export value,” he said.
Jackson also noted that the narrative blaming imports for the cedi’s weakness is widespread, appearing over 60,000 times online across government, private sector, and civil society platforms.
“It is a narrative that demands further examination because the data does not support it,” he added.
Source: citinewsroom.com by Abigail Arthur
