Freeze public sector recruitment to arrest Cedi - Nii Moi Thompson to gov't

Economist Dr. Nii Moi Thompson says the government should halt public sector recruitment to halt the rapid depreciation of the cedi.

He said on Citi TV‘s The Point of View that, the government must focus on cutting down on expenditure to save the currency which has depreciated against the dollar and other major trading currencies.

“If government wants to restrain this runaway depreciation thing, the first line of action will be to cut government spending. Freeze hiring across the board.”

Using the United States of America as an example, Dr. Thompson said, “this is what is done in other parts of the world. During the last financial crisis, there are cities in the US that actually sold their city halls to private businesses because they could no longer afford to do that and then they rented from them.”

“Whenever you run into a crisis, you are supposed to reprioritize your spending but here we are spending as if we have a bottomless pit of money,” he added.

He complained that the state was “putting so many people on government payroll who shouldn’t be there.”

Citing contemporary examples, he described the creation of 44 new districts and six new regions as “non-productive expeditions.”

“The role of government spending; excessive and reckless government spending is perhaps one of the most important of all the factors [affecting the cedi].”

The cedi has depreciated against the dollar from GHc 4.9 to over GHc 5.5 since the turn of the year sparking concern in the business community, among others.

In 2018, the cedi depreciated by 8.4 per cent against the dollar.

In 2015, the three-year loan agreement concluded between the Government and the International Monetary Fund (IMF) contained agreements to freeze employment in government departments except for those under Education and health.

The agreement also expected the government to limit the nominal increase in the total wage bill to no more than 10 percent.

Cedi depreciation: ‘We should be okay’ in a couple of weeks – Ofori Atta

Finance Minister, Ken Ofori-Atta, last week said the free fall of the cedi against major foreign currencies especially the dollar, will be curtailed in the coming weeks.

He said the government expects some fresh injection of capital such as the $750 million Standard Bank bridge facility to deal with the challenges the cedi is currently facing.

 

By: Delali Adogla-Bessa | citinewsroom.com | Ghana
Follow @delalibessa

Source: citifmonline.com