The World Bank Country Director Henry Kerali is urging the government to fast track on-going structural reforms to help Ghana improve its exports and local consumption.
According to Mr Kerali, this could help firmly stabilizes the local currency in the medium term and help deal with the perennial depreciation that hits the Ghana cedi every year.
The cedi’s challenge for this year
The local currency has come under some pressure again selling currently around GH¢5.30 pesewas to one dollar.
According to some of the major commercial banks, the local currency has depreciated by more than four per cent since the beginning of this year.
The development has been linked to a limited supply of dollars on the market, despite the high demand from businesses to finance imports.
There have been calls for the BoG to significantly increase the supply of US dollars to quickly help hold the fast rate of depreciation.
But persons close to the Bank of Ghana have maintained that they need to be strategic with these interventions to ensure that they do not deplete all the country’s reserves which is said to be over $7 billion.
The Bank of Ghana has assured that the sustained depreciation that we have witnessed over the past month would be over very soon.
The Head of Financial Markets of the Bank of Ghana Stephen Opata has argued that this is based on some recent developments witnessed in the past few days.
Speaking to JoyBusiness, Mr. Kerali said some of these reforms should be targeted at the agricultural sector, so that it would help improve Ghana’s exports significantly as well as what the country produced locally “a lot of food import bills in Ghana is about two billion dollars could be substituted by local production, which would go a long way to reduce the pressure on the cedi.”
Fiscal and Monetary measures
Mr Kerali noted that the establishment of the Fiscal Policy Council is in the right direction which should give some assurance to foreign investors which in short to medium term improve Foreign Director Investments (FDI) to Ghana.
He, however, maintained that this should be complemented by improved domestic revenue mobilization and industrialization. This he also believes would help stabilize the cedi in the short to medium term.