IF government is unable to deal with the woes of the Ghana cedi, its flagship programme, the ‘One-District-One-Factory’ will flop, Chief Executive Officer (CEO) of Dalex Finance, Mr Kenneth Thompson has warned.
The plain-speaking Dalex Finance CEO claimed that the cedi’s overvaluation made imports cheaper and exports uncompetitive and would thus inhibit the success of the 1-D, 1-F initiative.
Mr Thompson in an imaginary conversation with Finance Minister, Mr Ken Ofori-Atta dubbed “Facing up to realities” on the economy of Ghana reiterated his call for the local currency to be allowed to fall to its “real value.”
This was at a forum organised by the Chartered Institute of Marketing, Ghana (CIMG) in Accra last week.
According to Mr Thompson, “the One-District-One-Factory is too important a programme for such a compelling argument of a serious risk of failure not to be addressed.”
Mr Thompson undertook analysis of the value of the Cedi using the ‘Big Mac’ Index of the ‘The Economist’ magazine. The index suggested that the true value of the cedi could be as low as GH¢13 to 1USD, meaning it’s overvalued by as much as 139 percent and as such inferring that the cedi is grossly overvalued.
The effect of the overvalued cedi put a constraint on Ghana’s economic growth and caused extensive unemployment and resulted in poverty.
According to him, for so long as the cedi was overvalued, all the proposed industries would be uncompetitive and the current NPP administration’s flagship ‘One-District-One-Factory’ initiativewould bea potent risk of failure.
The ‘One-District-One-Factory’ programme is aimed at establishing, at least, one factory or enterprise in each of the 216 districts of Ghana as a means of creating economic growth poles that would accelerate the development of those areas and create jobs for the teeming youth.It proposes to undertake a massive industrialisation campaign across the country, to equip and empower communities to utilise their local resources in manufacturing products that are in high demand both locally and internationally
The policy aims to transform the structure of the economy from one dependent on production and export of raw materials to a value-added industrialised economy, driven primarily by the private sector.
Source: Isaac Aidoo || The Finder