Cape coast: Dr Philip Abradu-Otoo, the Director of Research at the Bank of Ghana (BoG), has emphasized the urgent need for structural reforms to tackle the bottlenecks in the Ghanaian economy to ensure the resilience of the country's currency. At the official launch of the University of Cape Coast's (UCC) School for Development Studies Alumni Association, Dr Abradu-Otoo highlighted the adverse effects of excessive currency volatility on inflation, pricing behavior, and the cost of living, advocating for practical measures to strengthen the real economy, enhance export activities, and build foreign reserves.
According to Ghana News Agency, the launch coincided with a roundtable discussion by the Alumni Association on the theme: 'Monetary Policy Responses to Exchange Rate Volatility in Ghana: Implications for Cost of Living.' Dr Abradu-Otoo pointed out that the structure of Ghana's economy significantly influences the exchange rate, noting that import-dependent countries are more prone to currency depreciation and high living costs. He explained that businesses often pass on additional costs from currency depreciation to consumers, driving up the prices of goods and services.
Dr Abradu-Otoo remarked, 'The central bank is mandated to stabilize inflation, not necessarily the exchange rate. However, excessive volatility, whether appreciation or depreciation, creates uncertainty that affects investment, competitiveness, and cost of living.' Prof Samuel Kwaku Agyei, Dean of the School of Business, supported the view, stressing the need for prompt and measured monetary policy responses to counteract inflation. He noted that exchange rate instability invariably leads to inflationary pressures, impacting the prices of essential goods like food, transport, and utilities.
Prof Agyei added, 'In Ghana, even a tomato seller attributes price hikes to the dollar. This shows how deeply exchange rate volatility trickles down to households.' He expressed concern that many businesses and traders had not reduced their prices despite the recent appreciation of the cedi, meaning consumers were not experiencing the benefits of the currency's strength. 'Market players must complement government efforts by ensuring that price reductions are reflected in the pockets of households,' he said.
Mr Stephen Adjei, the pioneering President of the Alumni Association, noted that the Association would serve as a network for mentorship, collaboration, and lifelong learning, leveraging members' collective expertise to drive national development and support the university. He emphasized that alumni are an integral part of the university community, whose professional experiences and expertise are crucial for the institution's progress. The Association plans to raise funds for various development projects, spearhead digital innovation, and support postgraduate training, research, and capacity building for members and the school.
Mr Adjei urged members to actively participate in the development of the School for Development Studies, stating, 'We must build a network that inspires, empowers, and elevates every member, making a tangible difference in society.'
