Vice President of IMANI Africa, Bright Simons, has highlighted the need for a stable exchange rate, describing it as a critical factor for effective business planning and sustained private sector growth.
According to Mr Simons, persistent volatility in the cedi undermines confidence, disrupts operations and makes it difficult for businesses to forecast costs and revenues.
He argued that the exchange rate should remain relatively steady against the currencies of Ghana’s major trading partners to support predictable economic activity.
He made these comments during an interview with Channel One TV on Monday, January 5, where he stressed that stability, rather than currency appreciation, should be the primary policy objective.
“What is important is that it shouldn’t fluctuate wildly. Stability of the exchange rate is the most important thing, not necessarily appreciation,” he said.
Mr Simons explained that business cycles are often multi-layered, involving the sourcing of inputs, production, sales and the eventual recovery of revenue.
For businesses to plan effectively, he said, these stages must align with a predictable exchange rate environment. “It’s good that my planning sequence aligns with an exchange rate that is stable,” he noted.
He added that while firms can manage internal operations, abrupt changes in macroeconomic variables such as exchange rates and inflation are outside their control and can quickly destabilise businesses.
“If the exchange rate, which I can’t control, radically changes, or inflation shifts suddenly, it doesn’t matter what I do as an entrepreneur or corporate leader — everything goes awry,” Mr Simons said.
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