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Archive for June 16th, 2012

Election Year Excesses, Cedi Depreciation, and Inflation The Current Experience

Posted by Business in Ghana on June 16, 2012

Source: Center for Policy Analysis, Ghana.  http://www.cepa.org.gh

Every election year in the Fourth Republic, especially the hotly contested ones, has been associated with excesses (in spending and behavior), rapid depreciation of the cedi, and accelerating inflation. The most recent to such years is election year 2000 when the excesses led to an exchange rate depreciation (number of cedis per US dollar) 0f 100 percent from 3,500 old cedis at the beginning of the year to 7,000 at the end of the year.

The next after that was election year 2008 when election year excesses led to a fall in the value of the cedi from 1.0152 cedis / dollar in June 2008 to 1.4524 cedis / dollar in June 2009  a year-on-year depreciation of about 43 percent which was halted only by the stabilization program agreed with the IMF. Read the rest of this entry »

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