Financial Analyst and Chief Executive Officer (CEO) of Dalex Finance, Joe Jackson, is arguing that the ever-depreciating Ghana Cedi has very little to do with the business operations of the Ghana Union of Traders Association (GUTA) but everything to do with debt repayments.
Joe Jackson says the traders have been blamed for cedi depreciation for far too long when, in actual fact, they are not the real culprits.
The financial analyst made this candid observation at an event hosted by the Canada Ghana Chamber of Commerce on the theme “2025 Budget in Perspective.”
Speaking with all frankness, Jackson exonerated GUTA from the frequent blame for the local currency’s struggles. He argues that even the recent trade balance, which has been positive, does not support the claims that the traders are the villains of the cedi.
He is therefore calling on analysts, the government, and all persons who are fond of vilifying the traders’ group to desist from such attacks.
“Our problem in terms of exchange rate depreciation is not about our trade balance because we have been recording a trade surplus for some time now. Stop harassing GUTA for that,” he fired.
The real culprit, Joe Jackson says, is Ghana’s heavy debt burden and the large amounts of foreign currency bleeding out of the economy to service it. He pointed out that it’s not imported goods draining the cedi, but rather the money wired out for debt repayment and dividend repatriation by foreign investors.
He painted a stark picture of the fiscal mess, revealing that by 2020, Ghana’s public debt had ballooned to GH¢291 billion which is about 76.1% of GDP. The government was spending a staggering 47% of its tax revenue just on interest payments.
“It was sad for the government to spend 47% of its tax revenue to service debt. That was how bad the situation was,” Jackson lamented.
In his analysis, Ghana’s consistent trade surpluses should ordinarily have strengthened the cedi. However, the relentless outflow of dollars to meet debt obligations and foreign dividend payments has crippled any gains from trade, leaving the currency vulnerable.
This stance of Joe Jackson puts a spotlight on the urgent need for Ghana’s policymakers to focus on structural reforms, tackle the debt mountain, and shift attention away from traders who, in his words, are wrongly vilified for a crisis they did not cause.
Although the local currency has attained some level of stability in recent days, for Joe Jackson, the country can achieve a a more stronger and a stable cedi if it cuts down its appetite for borrowing, which is accompanied by high interest payments serviced in dollars, which crumbles the cedi.
