More on the perennial currency crises in Ghana

The Ghanaian government is desperately trying to shore up the value of the cedi so it doesn't become completely worthless versus the dollar. One major initiative by the government is to seek the help of China in guaranteeing the value of the cedi. But, the various measures to shore of the currency taken every year never deal with the fundamental problem that Ghana is a country with an elite that has a huge demand for expensive imports that have to purchased in dollars while at the same time failing to produce enough value in exports to buy those dollars. The result is that the cedi constantly loses value because there is a huge demand for dollars in comparison to the demand for cedis. One possible currency solution might be to peg the cedi to the dollar rather than float it as have a number of other countries such as Lebanon or get rid of the cedi completely and use the dollar instead as Ecuador does. However, ultimately people in Ghana have to be able to produce something in order to have money if they are going to purchase goods from outside the country. To import goods you have to export value added goods to have money. Otherwise there is no way to afford imports.