By: Nyima Sillah
Ba Lamin Darboe, a Financial Consultant has said that the value of dalasi has depreciated compared to other currencies.
Saying this during an interview with The Voice newspaper, Mr Darboe said “the value of Dalasi has depreciated in comparison to other currencies. Weak currencies are often thought to be those of nations with poor economic fundamentals or systems of governance.”
He noted that businesses community will now increase their prices in terms of goods and services which causes the purchasing power of the citizens lower. Giving an example, he said the price of fuel in December 2021 and the price of fuel in December 2022 are quite different.
Meanwhile, when asked what impact high debt will have on the economy of the country, he said: public debt that’s too large causes investors to drive up interest rates in return for the increased risk of default. “That makes the components of economic expansion, such as housing, business growth, and auto loans, more expensive.
“This usually results in taxes being high and when it happens, the prices of goods and services increase. That also affects the purchasing power of the average individual causing inflation,” he said.
More so, he went on, in other to reduce high debts as a country, there should be a reduction in unnecessary spending that does not affect economic growth. Adding that, public spending should be backed by something.
“Spending cuts are very influential in this case and the government must do more and devise mechanisms to improve efficiency and reduce spending which has no bearing on development. Prices are high and the purchasing power is very low. That being said, it is very difficult for the government to service these loans as more businesses are failing because of rising prices and taxes,” he explained.