Finance Minister Dr. Mohammed Amin Adam has assured Ghanaians that the Ministry of Finance is collaborating with the Bank of Ghana to implement measures to address the depreciation of the cedi.
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Dr. Adam outlined several key measures being taken:
1. Fiscal Consolidation: Fast-tracking the fiscal consolidation process by rationalizing spending and enhancing revenue mobilization.
2. Gold-for-Oil Programme: Intensifying the gold-for-oil programme.
3. Foreign Exchange Interventions: Implementing appropriate foreign exchange interventions by the Bank of Ghana.
4. Gold for Reserve Programme: Intensifying the gold for reserve programme.
5. IMF Support: Disbursing the third tranche under the second review of the IMF-supported PC-PEG after IMF Executive Board approval in June 2024.
6. World Bank Loans: Disbursing funds from ongoing projects, including a $150 million World Bank loan and an expected $300 million under the World Bank DPO2, possibly in the third quarter of 2024.
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Dr. Adam emphasized that there is enough foreign exchange supply, urging Ghanaians not to rush to buy forex. He noted that the fiscal consolidation program is on track, with the primary balance on a commitment basis improving to a deficit of 0.3% of GDP by the end of 2023.
Preliminary data for the first quarter of 2024 showed a primary balance deficit of 0.6% of GDP, against a target of 0.2%. This was due to delays in implementing 2024 revenue measures. The government plans to fast-track revenue mobilization to achieve a primary balance target of a surplus of 0.5% in 2024 and 1.5% of GDP from 2025 to 2028.
Dr. Adam also mentioned efforts to restore debt sustainability by 2028, highlighting that the public debt-to-GDP ratio improved to 71.4% at the end of 2023 from 73.5% in 2022.
The cedi has faced severe pressure in the past eight weeks, losing almost 20% of its value against the US dollar. It is currently trading at about GH15.02 to the dollar on the retail market.
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