A lecturer at the Department of Economics at KNUST, Dr. Prince Boakye-Frimpong, has cautioned the Ghana Union of Traders Association (GUTA) against compelling its members to reduce prices following the recent appreciation of the cedi. Speaking on the TeknoKrat Show on Focus FM with Audrey Sika Dzifa, Dr. Boakye-Frimpong stated that although the strengthening of the local currency is a positive development, its impact on market prices may take time to manifest.
“I am sure if this whole change is maintained for a long time, we might see some changes. But generally, it is not only the appreciation or exchange rate that determines prices.
If global supply chain factors remain unchanged, reductions in consumer prices may not reflect immediately in our daily lives,” he explained. The economist’s comments were in response to GUTA’s directive, urging its members to reduce prices to cushion consumers.
However, Dr. Boakye-Frimpong believes such directives undermine free market principles. “This is not the first time GUTA has issued such instructions.
In 2022, when the cedi was depreciating, GUTA urged its members to increase prices. But they are not mandated to dictate how traders should operate,” he noted.
He attributed the cedi’s recent gains to positive external shocks and internal fiscal interventions such as the Gold-for-Oil initiative and monetary discipline by the government. “Trade tariff wars involving the U.S. and other countries have indirectly benefited us.
As a small economy, this presents a positive shock. If we sustain operations of the Gold Board and enforce fiscal discipline, we can maintain this momentum,” he said.
On speculations about the dollar rate possibly falling below 10 cedis, Dr. Boakye-Frimpong remained optimistic. “If we properly manage physical leakages and the external environment remains favorable, we could see the rate hit 9 by the end of May,” he predicted.
He concluded by urging the government to prioritize long-term economic strategies, particularly strengthening exports to guard against future external shocks.