US$2 billion syndicated loan to provide relief for budget, balance of payments – Governor
Cedi depreciated against US Dollar by 15.8% in the year to May 18 – Bank of Ghana
Governor of the Bank of Ghana, Dr. Ernest Addison has highlighted the impact of developments in the global economy and its impact on Ghana.
According to him, developments such as the Russia Ukraine war, supply chain disruptions, inflation hikes and among others, have resulted in Ghana not being able to access the capital markets to raise money as it has usually done over the years.
Speaking at the sixth edition of the Ghana CEO Summit in Accra, Dr Ernest Addison said further ratings downgrade on Ghana’s Long-Term Foreign-Currency Issuer Default Rating (IDR) has impacted on the economy.
“This has elevated Ghana’s external vulnerabilities and translated into balance of payments pressures, although, the trade surplus improved somewhat, due to higher crude oil export earnings. However, the significant net portfolio reversals and weak inflows into the capital and financial account resulted in a widened balance of payments outturn and loss of reserves in the first quarter of 2022,” the governor explained.
He further indicated that the prevailing tight global financing conditions and persistent policy rate hikes in advanced economies, have continued to make Ghana's external financing conditions rather unfavourable.
The Governor stressed that these developments however pose real risks to the country’s external outlook.
“The developments have also impacted Government finances and created financing challenges for the budget. The issuance of bonds and securities have not been met with significant uptakes by the market. In response, the Government announced a series of expenditure cuts of up to nearly 30 percent to deal with the situation,” Dr. Addison added.
Touching on moves by government to raise some US$2 billion to sustain the economy the BoG governor said the move will provide some relief to both the budget and the balance of payments.
