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Government Projects to Secure US$ 2.32 Billion to Stem Cedi’s Fall

Government is eyeing $2.32 billion by the year's end to stabilize the national currency, the cedi.

The Ghana government has set its sights on securing approximately $2.32 billion by the year’s end to stabilize the national currency, the cedi. Finance Minister Dr. Mohammed Amin Adam revealed this during a monthly briefing on the economy held on Friday, May 24.

The funds, sourced from various channels including the International Monetary Fund (IMF), the World Bank, and anticipated proceeds from cocoa syndicated loans, are earmarked to be dispersed gradually throughout the remainder of the year.

Dr. Adam detailed the anticipated sources of these funds, citing the expected 3rd Tranche under the 2nd Review of the IMF-supported PC-PEG, disbursement from ongoing projects such as the recently approved US$150 million World Bank Loan, and the projected receipt of US$300 million under the World Bank DPO2, potentially in the third quarter of 2024.

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Additionally, disbursements of US$200 million to Ghana EXIM Bank and GCB by ECOWAS Bank for Investment and Development (EBID) are anticipated later in the year, along with expected proceeds from cocoa syndication in the fourth quarter of 2024.

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In addressing concerns about the depreciation of the cedi, Dr. Adam outlined several measures, including restraints on government spending coupled with enhanced revenue mobilization. He also highlighted plans to intensify the Gold-for-Oil programme and implement appropriate forex interventions through the Central Bank.

Assuring the public of an adequate forex supply to meet demand, Dr. Adam emphasized that citizens don’t have to rush to buy forex.

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The cedi has depreciated by approximately 14.2% on the interbank market and over 18% on the retail market, adversely impacting businesses and individuals who now require more cedis to purchase the same amount of dollars.

Despite government efforts, concerns remain regarding the effectiveness of disbursing the $2.32 billion over a six-month period, given uncertainties surrounding fund arrival and heightened demand for the dollar. 

Meanwhile, the Finance Minister attributed the cedi’s depreciation to various factors, including a strong dollar, seasonal increases in demand by corporate institutions, increased cedis in circulation from payments to contractors and independent power producers (IPPs), and speculative activities.

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