Chief Executive Officer of Dalex Finance, Joe Jackson has said external factors like the reduction in oil prices on the global market and the US tariff have significantly impacted the rise in the Cedi against the dollar.
Joe Jackson explained that the US trade war has led to the depreciation of the dollar against all other trading currencies, leading to a significant reduction in oil prices on the global market.
He noted that this has led to less pressure on the Ghanaian cedi as more dollars will no more be needed to import fuel, one of the biggest imports for Ghana.
Speaking on TV3’s Key Points, May 17, he noted that the dollar depreciation on the market has caused investors to turn to Gold which is one of Ghana’s natural resources that we export, the reason there has been a sharp increase in our export of gold from the beginning of this year and now strengthening our cedi.
“External factors have been good to Ghana and we have put ourselves in a position where we can take advantage of the external factors and it is very important to appreciate both sides if the divide.
“The Trump tariff war has had three effects on us. One, the dollar has depreciated against all major trading currency.
“Because of that war and Trump wanting the price of crude oil to be low as $40 per barrel, that means that the single biggest import for this country which is fuel product where we are importing $400 million a month, the cost of that has come down so there is less pressure on the cedi.
“The price of oil has also been falling. This same instability global cause has meant that investors have move their dollars from other currencies into Gold because they want somewhere safe,” he stated.
Although, he acknowledged that the dollar has depreciated on the global market, Joe Jackson believes that government’s commitment to reduce public expenditure and the cost of servicing debts has attracted more external investors to turn to the country’s economy.
He stressed that government’s reduction in public expenditure commitment and other measures instituted also account for the appreciation of the cedi against the dollar.
“Have the external factors aligned? Yes. Have we also done the right thing? Yes. Look across West Africa, the CFA has appreciated against the dollar but nowhere near what has happened to the dollar. Close in Nigeria, even in the midst of the dollar depreciating on the global market, the Naira is still depreciating against the dollar.
“You cannot write off everything and say it is global. If it is so why are the other West African countries not getting the same effect we are getting. Why are some even going backwards?” he questioned.
