An Economist Dr. Nii Moi Thompson has predicted that unless there is a drastic interventions to arrest the fall of the cedi to the dollar, the struggling Ghanaian currency, which is currently above GHS7 to a dollar, will hit the GHS10 to $1 before the end of this year. Read Dr Nii Moi Thompson’s full article below: On 4th March 2022, the Bank of Ghana reported that the cedi had reached 7.00 to the dollar. Compared to the rate of GHc4.2 at the end of December 2016, this meant the cedi had depreciated by 40.02% against the dollar since January 2017, when the government took office amidst flamboyant promises to usher the cedi into a golden age of stability. In mid-2017, the vice president, Dr. Mahamudu Bawumia, who now chairs the economic management team and had been hailed as the ultimate saviour of the long-suffering cedi, proudly declared that he had “arrested the cedi” (or its “rate of depreciation”?), locked it up, and given the key to the IGP. There appears to have been a jailbreak since then, and the IGP must answer some questions. As to be expected, the rates at forex bureaus were higher than the BoG’s rate, with one bureau quoting US$/GHc7.6 on the same day; it was likely higher still at Cow Lane, the engine room of the underground currency market in Accra. Clearly, unless drastic action is taken – and soon – the cedi may well reach the 10:1 mark before year’s end, dragging with it the already-struggling economy. We can’t afford that. How did things go so horribly wrong between 2017 and now? What happened to those flamboyant promises and the vice president’s smoke-and-mirrors lectures on the cedi, complete with insults for anyone who dared disagree with him? And how do we get the cedi out of this quicksand and back on firm ground to prevent the imminent implosion of the economy? To answer these questions, we need first to revisit an article that the vice president wrote on his Facebook page in 2018 when the cedi started wobbling; briefly look at the cedi’s beleaguered history; and then review the key recommendations of the 40-Year Development Plan (2018-2057) to stabilise the cedi that the government ignored in favour of a special committee in 2020 to “investigate the depreciation of the cedi”. That committee almost immediately faded into oblivion and left the cedi to its fate. The vice president began his article with his trademark insults, noting that former President Mahama, who as vice president before becoming president once chaired the economic management team, had been talking about exchange rate depreciation, but “sadly demonstrate[d] his lack of understanding on (sic) key aspects of our economy”. He then promised “to try to simplify the explanation for him”. Rather condescending. What followed was a potent mix of crass propaganda, grammatical blunders, and a shocking inability of the vice president to calculate the depreciation of the cedi, or, worse still, distinguish between currency depreciation and appreciation. He was, of course, once the deputy governor of the Bank of Ghana, which is responsible for managing the stability of the cedi. The propaganda had begun in the months leading to the 2016 elections. He and the entire campaign team behind him proclaimed, erroneously, repeatedly, that the cedi had depreciated by 247% under “NDC’s Mills-Mahama (8 years)”, from GH¢1.2 to GH¢4.2, compared to what he claimed to be a depreciation of 72% under “NPP’s Kufour-Aliu (sic) (8 years)”. These claims were reproduced in his Facebook article. Since nothing can lose all its value and remain in existence, it is impossible for a currency too to lose 100% or more of its value without ceasing to exist. Even if the cedi were to exchange for a million to the dollar, so long as it can buy something, it can’t be said to have lost 100% of its value. This is basic financial economics. What the vice president presented as the depreciation rates of the cedi against the dollar under the two governments, therefore, were in fact the appreciation rates of the dollar against the cedi (something, after all, can be worth several times its value). The correct depreciation under the Kufuor-Aliu Mahama government was thus 41.7%, and not 72%, which was actually the appreciation of the dollar against the cedi. And the Mills-Mahama depreciation rate was 71.4%, still unacceptably high, but certainly not 247%, which was the dollar’s appreciation against the cedi (the exact figure is 250%, allowing for the decimal places that he omitted). He concluded: “Although it is early days, there is much optimism for a more stronger (sic) currency under the leadership of Nana Addo Dankwa Akufo-Addo”, continuing with his habit of brown-nosing. What he didn’t say was the role of Eurobond proceeds in the relative stability of the cedi under his watch up to that point. The Bank of Ghana had reported in May 2018 that “the recently issued Eurobonds raised the levels of international reserves to US$8.1 billion (4.4 months cover for imports) as at 17th May 2018, providing enough cushion against any potential external vulnerability” – that is, cedi deprecation, in layman’s language. It was when the Eurobond proceeds ran out and the cedi started tumbling that the former president spoke and incurred the wrath of the vice president. He had been exposed over his famous claim that the exchange rate would always expose weak economic fundamentals. Clearly, he didn’t like that. Between 2018 and 2021, the government borrowed an eye-popping US$11 billion through Eurobonds, compared to US$4.5 billion under Mills and Mahama; the US$11 billion represented 71% of all Eurobonds since President Kufuor. By early 2022, investors had seen through the government’s Ponzi scheme and pulled the brakes on further lending. The scheme collapsed and the cedi has been disintegrating since then. The vice president has been in hiding. Or at least quiet about the cedi. Now, to the demons that have plagued the cedi for decades. Busia was overthrown in 1972 for devaluing