BoG promises to rectify cedi challenges

Ghana will make it a priority to address the downward pressure on the cedi, since instilling confidence in the currency will help generate better opportunities for growth.

This according to the Governor of the Bank of Ghana (BoG) Henry Kofi Wampah.

Speaking to the Oxford Business Group (OBG) during a wide-ranging interview he gave to the global publishing, research and consultancy firm, Wampah acknowledged that the bank had faced a “difficult choice”, given the importance of making credit accessible to the business community.

However, he added, macroeconomic stability represented an essential “first step” towards sustainable growth.

“If there is not enough incentive to invest in the bond market, many of the private sector’s gains could be lost due to market uncertainty,” he told OBG.

The full interview with Wampah will appear in The Report: Ghana 2016, OBG’s forthcoming publication on the country’s economy.

The report will contain a detailed, sector-by-sector guide for investors, alongside contributions from leading personalities, including the Minister of Finance Seth Terkper.

Wampah highlighted the key part that greater coordination in public sector financing could play in improving fiscal management. He also told OBG that further monetary financing on the secondary market would be needed “to increase liquidity, creating appetite for longer-term debt securities”. The central bank, he added, planned to introduce a platform to facilitate secondary market trading. “By reassuring investors that our debt-management strategy is sustainable, while also making sure there is less of a chance of losses when securities are sold for cash, Ghana can rein in its debt,” the bank’s governor told OBG. Wampah said a broad-based approach was required to help mitigate market shocks. Solving Ghana’s macroeconomic imbalances, he continued, marked the first step. “The drop in commodity prices of chief exports like cocoa, gold and oil has widened the trade deficit, and it will take a collaborative effort to end our over-reliance on commodities,” he commented.