Cedi depreciation: Don’t panic, says Ken Ofori-Atta

As the local currency continues to depreciate against major international currencies, especially the US dollar, Ofori-Atta said Ghanaians should not panic

The Minister for Finance, Ken Ofori-Atta has given assurance to Ghanaians that the government is working around the clock to get the economy back in shape.

As the local currency continues to depreciate against major international currencies, especially the US dollar, Ofori-Atta said Ghanaians should not panic because the economy will bounce back soon.

The International Monetary Fund (IMF) has started talks with Ghana over a US$3 billion deal and last month IMF officials said they expected to reach an agreement before the end of the year.

“It’s quite perplexing to see where it’s going, of course, typically in October, people are importing for Christmas and maybe there’s a rush for that (the dollar) but my expectation is that once we also conclude with the Fund (IMF), that will lead to the fund’s disbursement early next year to do that,” Ofori-Atta told Asaase Radio’s Nana Oye Ankrah in Washington.

“The support we are getting from countries like Germany and France, we are confident that we will get the resources needed, so we really would want people to know not to panic or be rushing in order to put pressure on the currency, I think it’s unnecessary and we are in good shape,” he added.

The MD of the International Monetary Fund (IMF), Kristalina Georgieva, has stated that a deal between Ghana and the Fund should be reached and finalised before the end of the year.

In a close door meeting with President Nana Addo Dankwa Akufo-Addo on Monday (5 September) on the sidelines of the Africa Adaptation Summit, in Rotterdam, Netherlands, the IMF boss told the Ghanaian leader that “we understand the urgency, and we will move as quickly as possible.”

Describing Ghana as a “superb country”, she reiterated the determination of the Fund to work with the government and the Ministry of Finance, and ensure that an agreement is in place before the end of the year.
On his part, President Akufo-Addo indicated to the IMF boss that a lot of work has been done by his cabinet and the Ministry of Finance, and the document to be presented by the Ghana side “is ready for the scrutiny of the IMF.”

External factors

Meanwhile, Georgieva has said that Ghana’s current economic challenges are not locally generated but from external shocks.

She said that the factors are exogenous.

“We have started very constructive discussions already and to the people of Ghana, like everybody on this planet, you have been hurt by exogenous shocks,” she said.

She mentioned the extraneous factors which have contributed to Ghana’s economic woes, leading to the West African country seeking a programme from the IMF.

“First the pandemic, then Russia’s war in Ukraine. We need to realise that it is not because of bad policies in the country but because of this combination of shocks, and, therefore, we have to support Ghana,” she said.

She also indicated that Ghana is a member of the IMF, “a strong country with fantastic people”, and as such it is incumbent on the Fund to lend the country support.

Georgieva also indicated “we have to support Ghana because your strength contributes to the strength of your neighbours; it contributes to a stronger world.”

Ghana is before the IMF for US$3 billion to help the country navigate through the hostile economic crisis it finds itself in as a result of the adverse effects of the deadly coronavirus pandemic and the ongoing conflict between Russia and Ukraine.

President Akufo-Addo has stated, on occasion, that “we have decided to seek the collaboration of the International Monetary Fund (IMF) to repair, in the short run, our public finances, which have taken a severe hit in very recent times as a result, whilst we continue to work on the medium to long-term structural changes that are at the heart of our goal of creating a Ghana Beyond Aid, that is building a resilient, robust Ghanaian economy.”
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