Ghana Sees About $800 Million Assistance From IMF by JanuaryMoses Mozart Dzawu and Paul Wallace
Ghana will receive about $800 million from the International Monetary Fund as soon as January that will help stabilize the cedi, Minister of Finance Seth Terkper said.
The package will help support the cedi’s recovery and prevent the currency from depreciating as quickly as it has in the recent past, Terkper said in an interview with Bloomberg TV Africa in London on Oct. 20. The world’s second-largest cocoa producer said it aims to conclude talks with the Washington-based lender next month for a three-year program.
“Confidence has gradually returned to the markets,” Terkper said. “We do not expect that the cedi will go back to depreciating as fast as it has done in recent past.”
Even after rebounding in the past two months, Ghana’s currency is still the worst performer in Africa this year. The decline has pushed inflation to the highest level since 2010 and limited the government’s ability to narrow the budget deficit. The government will probably miss its target of cutting the gap to 8.8 percent of gross domestic product this year because of chronic power shortages and other factors, Terkper said.
The prospect of an IMF program has “reduced short-term risks” in Ghana, Fitch Ratings Ltd. said today in a document handed to reporters in Johannesburg. Fitch expects Ghana’s budget deficit to be 10.1 percent of GDP this year. Pressures could “re-emerge in early 2015” if the IMF program is delayed, it said.
The cedi weakened 2.4 percent to 3.3020 per dollar at 9:42 a.m. in Accra, extending its decline to 26 percent this year.
Economic growth will probably accelerate to 7.5 percent next year from about 6.9 percent in 2014 because of higher crude output and improved gas supplies, Terkper said.