Ghana cedi depreciates by 7.06% to US Dollar
The Ghana cedi, according to a 15-nation ranking, has now been ranked as the worst-performing currency in Africa within just two months into 2022, a Joy Business report has said.
According to the portal, the development is due to the cedi’s depreciation of about 7.06 percent to major trading currency, US Dollar.
This also means the cedi’s current struggles against the US Dollar have overtaken the Zambian kwacha which was some two weeks ago, ranked as the worst-performing currency in Africa according to the same ranking.
Already, Ghana and Zambia are facing economic challenges due to increasing public debts, expenditure management and revenue generation constraints. In addition, Ghana’s exchange rate regime coupled with inflation and possible interest rake hikes is said to place more burden on government.
On the international capital markets, investors have signaled uncertainty about Ghana’s economic outlook and prospects. Key rating agencies such as Moody’s Investor Services and Fitch Ratings have all downgraded Ghana’s creditworthiness.
Already, government is struggling to approve key legislation in Parliament despite presenting its 2022 budget statement in November last year.
The announcement of the Electronic Transaction Levy by the Finance Minister [Ken Ofori-Atta] has courted controversy and widespread condemnation by lawmakers and a cross-section of the public.
Some market analysts, however, believe the cedi’s current woes against major trading currencies are likely to impact trading activity, disposable income of consumers and budgetary allocation of key corporate and government institutions.
Meanwhile, the World Bank has entered a five-year partnership with Ghana which will see the injection of US$4.5 billion into the economy over the period.
The move is under the Country Partnership Framework which will span from 2022 to 2026, with a view of supporting Ghana’s post-COVID-19 recovery and medium-term development.