Boosting the Value of the Cedi: A Multi-Faceted Approach
Chris Oppong
Founder and CEO, Glinax || Founder and Director, Hilth Foundation|| Skill Builder
The Ghanaian cedi, our national currency, was introduced in July 1965, replacing the Ghanaian pound. Since its introduction, the cedi has undergone several changes, including redenominations and revaluations, to stabilize its value. Initially, one cedi was equivalent to 0.98 British pounds. Over the years, however, the cedi has experienced significant fluctuations due to various economic challenges, such as inflation, trade imbalances, and external debt.
The cedi's value has been volatile since its introduction. In the early years, it maintained a relatively stable exchange rate against major currencies. However, by the late 1970s and early 1980s, the cedi began to depreciate significantly due to economic mismanagement, political instability, and global economic pressures. To combat this, the government introduced a series of redenominations. In 2007, the Ghanaian cedi was redenominated, with four zeros being dropped, making 1 new cedi equal to 10,000 old cedis. Despite these efforts, the cedi continues to face challenges in maintaining its value.
One effective way to boost the value of the cedi is for Ghanaians to manufacture products and export them. Currently, Ghana rarely exports products to other countries. Instead, we import almost everything, including products that are already being produced in Ghana. This situation raises a critical question: why do we prefer imported goods over made-in-Ghana products? While I will address this question in a later section, let's first focus on two major challenges we face.
i. Establishing Manufacturing Plants
Setting up manufacturing plants in Ghana is fraught with difficulties. Financial constraints, high setup costs, operational expenses, and a lack of skilled labor and technical expertise are significant barriers. These factors make it challenging to get the necessary plants up and running to produce goods for export. Financial constraints include the lack of capital and difficulty accessing loans, which are crucial for establishing plants. High setup costs involve expenses for machinery, technology, and infrastructure. Operational expenses include costs for raw materials, utilities, and maintenance. The lack of skilled labor and technical expertise makes it hard to find workers who can operate advanced machinery and maintain production standards.
ii. Consumer Perception and Quality Assurance
Even if we manage to establish these plants, encouraging Ghanaians to patronize their products poses another challenge. Many Ghanaians have been conditioned to believe that local products are inferior. This perception is partly due to some companies neglecting quality assurance and producing substandard goods. Quality assurance is vital for building trust in local products. When companies cut corners to save costs, the resulting products often fail to meet consumer expectations. This leads to a preference for imported goods, which are perceived to be of higher quality. Changing this mindset requires consistent production of high-quality goods and effective marketing to highlight their value.
To address these issues, we need a multi-faceted approach. Here are some potential solutions:
i. Emphasizing Morality in Business Practices
All Ghanaians, especially entrepreneurs, should adhere to a strict practice of morality. Unfortunately, many are willing to go to any lengths, whether morally acceptable or not, to gain money. This mindset leads to a belief that products developed by fellow Ghanaians are inferior. To curb this issue, we must remember our morals and live by them, caring for and loving one another. This approach will make it difficult for individuals to recommend or manufacture fake products for quick money. While business must bring profits, we can still produce quality products and earn profits. Let's adopt this approach. A strong moral foundation in business encourages transparency, honesty, and commitment to quality. Entrepreneurs who value these principles are more likely to produce reliable products, fostering consumer trust and loyalty.
领英推荐
ii. Investing in Skills and Training
Our education system needs a significant reform. While theoretical knowledge is important, we must also include practical aspects in our education. It's the applied knowledge that makes a difference, not just the theoretical knowledge gained. We need to restructure our education system to meet today's needs, incorporating more practical training to equip students with the skills required in the workforce. Practical training involves hands-on experience with tools, machinery, and real-world problem-solving. By integrating internships, vocational training, and industry partnerships into the education system, we can better prepare students for careers in manufacturing and other technical fields.
iii. Supporting Small-Scale Enterprises
The government and NGOs should invest heavily in small-scale enterprises, which play a vital role in every country's economy. Investing in these enterprises is a fast way to create jobs, provide employment opportunities for many individuals, and reduce theft and robbery in the country. Small-scale enterprises often face challenges such as limited access to funding, lack of business training, and market competition. By providing financial support, business development services, and marketing assistance, the government and NGOs can help these businesses thrive. Successful small-scale enterprises contribute to economic growth and stability by generating income and reducing unemployment.
iv. Promoting Agriculture
Ghana's soil is fertile for planting and growing many crops, yet we fail to encourage young people to venture into agriculture. The common perception is that agriculture is tedious, involving tasks like weeding, irrigation, and spraying. While this is true, we are no longer in the days of manual labor; technology has made agriculture easier. We need to invest in machines and robots that can help us farm efficiently and progressively. Modern agricultural technology includes automated irrigation systems, drones for crop monitoring, and machinery for planting and harvesting. By making agriculture more appealing and accessible through technology, we can attract more young people to the sector. Additionally, government incentives and support programs can further encourage agricultural entrepreneurship.
Implementing these few but significant policies and strategies can boost the value of our cedi in the economic market. By addressing the challenges in manufacturing and consumer perception, investing in skills and training, supporting small-scale enterprises, and promoting agriculture, we can reduce our nation's burdens and pave the way for a prosperous future. When we focus on producing high-quality goods, educating our workforce, supporting small businesses, and modernizing agriculture, we create a strong foundation for economic growth. These efforts will not only improve the value of the cedi but also enhance the overall quality of life for Ghanaians. Let's work together to achieve these goals and build a better future for our country.
References