Depreciation of the Ghana Currency: Timely advice to Ghanaians, especially the youth

Quit checking the statistics every day! Over the past few months, the Ghanaian economy has been struck heavily, with the Ghanaian cedi drastically depreciating against the US dollar.  The Bank of Ghana states a number of reasons for the depreciation of the Ghana currency, which has resulted in severe price hikes. Some of these include the sharp rise in crude oil prices and the impact on the Oil Bill and the strength of the US dollar.

READ MORE: Reasons for the Depreciation of the currency in 2022 so far, and measures being adopted.

As many Ghanaians rush to open dollar accounts (in spite of the Foreign Exchange Act 2006, Act 723, some institutions and individuals still trade in dollars), others migrate to foreign lands in search of greener pastures. However, one would ask, “Is there a lasting solution to living comfortably?” Let’s discuss this in a bit.

READ ALSO: Ghana hikes rates to the highest level since 2017 on inflation risks

Escaping the Ghana currency: Is opening/ having a dollar account advisable?

It’s not a simple YES! Trying to retain the value of your savings depends on some factors. These include:

1. Your age (how close you are to retirement)

You might probably be wondering, “what has my age got to do with my decision to open a dollar account?”

Assuming you have about 30 more years to retire from active service, this means you’ll have more time to save and to take a riskier investment.

READ ALSO: The most sought-after jobs in Ghana and 4 priceless ways to find them

2. Time horizon for savings.

Saving in dollars makes you susceptible to dollar inflation which is currently 8.2% for September 2022, especially if you don’t intend to make any withdrawals. A depreciation of the cedi against dollar for instance by 20% will affect your savings but will be less advantageous than keeping a cedis investment at 32% after all.

So, the ultimate answer is not a straight yes, or no. Depending on your current circumstances, you can decide whether or not to open a dollar account. Remember that no situation is permanent.

Are there any other options for storing cash, aside from opening a dollar account?

A renowned man once said, “Money has wings, if you chase it, it will keep flying away”. Is it bad to want money and live comfortably? NO!

However, rather than considering the physical tender, money, think about the value it creates.

Invest in physical assets like land, buildings or cars.

READ ALSO: The richest man in Babylon.

Some time ago, spare parts for used or slightly used vehicles were almost unavailable, making used/slightly used cars expensive. Imagine getting one of these at the time, especially if they’re of a popular model like Toyota, selling the spare parts or even the whole car would’ve been profitable.

Again, when you examine the building and construction industry, you’ll realise that the prices of cement keeps skyrocketing, however, this does not, in any way limit some people from building. As long as you have a conducive storage facility for building materials or cement or even a block factory, all things being equal, you’re likely to make a profit in the near future (I’m not talking about hoarding the goods). You might even think of building your own home in the end. Other examples are buying and selling gold jewellery.

The world teaches us to amass wealth to live comfortably, guess what?

3. I bet you haven’t thought about investing in relationships (I mean, people)

Help might not come from the same person you did good to, but it’s a principle that always works, giving, and it should be done with a genuine motive. Relationships are like gold. They build more wealth for you and your descendants, irrespective of the time frame. This is what some people call, connection, others also call it divine favour. Whatever your perspective is on this, it works!

So, in conclusion, the Ghana currency can be stored better when you consider the value of the money, and not amassing wealth, otherwise even having a dollar account can leave you penniless due to inflation. Think in the long run, and advise yourself.