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Archive for August 14th, 2014

Getting The Numbers Right. Omane Boamah’s Bad Arithmetic

Posted by Business in Ghana on August 14, 2014

Sydney Casely-Hayford 

Government issued a statement this week, asserting its position on the Fitch calculations of the depreciation of the cedi since the beginning of the year.

In order that we have the correct facts and calculations, it is important to identify the source of the data we use for the calculations and accept that the source is credible and should be accepted as such.

The Bank of Ghana (BoG) website, www.bog.gov.gh has all the historic data on cedi rates and would be the most common purpose source for the calculation of the slide of the cedi.

At the close of December 31, 2013 the quoted rate by the Bank was 2.1628=$1. This is the correct figure to use as the opening rate on January 1, 2014. As at 11th August 2014 the BoG quoted rate was 3.035=$1.

The formula to calculate the extent of depreciation is ((2.1628-3.035)/2.1628).

This calculation makes the rate of depreciation -40.3%.

There is no reason to get this wrong, except for political gimmickry.

Just Saying.

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