Fresh inflows of dollars are being injected into the foreign exchange market as part of measures to stop the continuous fall of the Ghana Cedi, President Nana Addo Dankwa Akufo-Addo has said.
In addition, he said the Bank of Ghana was enhancing its supervisory action in the forex bureau market and the black market to flush out illegal operators and ensure that those permitted to operate legally abide by the market rules.
“Government is working with the Bank of Ghana and the oil-producing and mining companies to introduce a new legal and regulatory framework to ensure that all foreign exchange earned from operations in Ghana are, initially, paid to banks domiciled in Ghana to help boost the domestic foreign exchange market,” he said.
The President announced this in a televised address to the nation on the state of the country’s economy last night as part of interventions by his administration to restore order in the forex market.
He said the Central Bank had taken a decision to enhance its gold purchase programme, and had given its full commitment to the commercial banks to provide liquidity to ensure the wheels of the economy continued to run in a stabilised manner till the IMF programme kicked in.
“I am confident that these immediate measures designed to change the structure of our balance of payment flows and sanitise the foreign exchange market to ensure that the banks and forex bureaus operate by international best practices, together with strengthened supervision, will go a long way to sanitise our foreign exchange market, and make it more resilient against external vulnerabilities going forward,” he said.
The recent turbulence on the financial markets, he explained, was caused by low inflows of foreign exchange, and was made worse in the last two to three weeks by the activities of speculators and the black market.
“An anonymous two-minute audio message on a WhatsApp platform predicting a so-called haircut on Government bonds sent all of us into banks and forex bureaus to dump our cedis, and, before we knew it, the cedi had depreciated further.
“All of us can play a part in helping to strengthen the cedi by having confidence in the currency, and avoiding speculation. Let us keep our cedi as the good store of value it is. To those who make it a habit of publishing falsehoods, which result in panic in the system, I say to them that the relevant state agencies will act against such persons.
“Indeed, some steps have been taken to restore order in the forex markets and we are already beginning to see some calm returning. We will not relent until order is completely restored,” he said
President Akufo-Addo assured the public that no individual or institutional investors, including pension funds, would lose their money in government treasury bills or instruments as a result of the ongoing IMF negotiations.
“I urge all of you to ignore the false rumours, just as in the banking sector clean-up, Government ensured that the 4.6 million depositors affected by the exercise did not lose their deposits.
“It is obvious, fellow Ghanaians, that you have a government that cares. We are determined to restore stability to the economy, and provide relief. We are all in this together, and I am asking for your support to rescue Ghana from the throes of this economic crisis,” he said.
To restore and sustain debt sustainability, he said the government had planned to reduce its total public debt to GDP ratio to 55 per cent in present value terms by 2028, with the servicing of external debt pegged at not more than 18 per cent of the country’s annual revenue.
“We are committed to improving the revenue collection effort, from the current tax-revenue to GDP ratio of 13 per cent to between 18-20 per cent, to be competitive with our peers in the West Africa Region.
“The GRA is rolling out an extensive set of measures to support this enhanced revenue mobilisation. All of us must do our patriotic duty, and support the GRA in this exercise.
We are aiming to restore and sustain macroeconomic stability within the next three to six years, with a focus on ensuring debt sustainability to promote durable and inclusive growth while protecting the poor,” he said.
President AKufo-Addo further announced plans by the government to review the standards required for imports into the country, prioritise the imports, as well as review the management of the country’s foreign exchange reserves, in relation to imports of products such as rice, poultry, vegetable oil, tooth picks, pasta, fruit juice, bottled water and ceramic tiles.
With intensified government support and that of the banking sector, he said the products could be manufactured and produced in sufficient quantities in Ghana.
“We must, as a matter of urgent national security, reduce our dependence on imported goods, and enhance our self-reliance, as demanded by our overarching goal of creating a Ghana Beyond Aid.
“Much as we believe in free trade, we must work to ensure that the majority of goods in our shops and market places are those we produce and grow here in Ghana. That is why we have to support our farmers and domestic industries, including those created under the 1District-1Factory initiative, to help reduce our dependence on imports,” he said.
The President urged the public to support and have confidence in the government’s ability to work its way out of the current difficulties.
“We will triumph, as we have triumphed many times before. Let us unite, and rally around our Republic, its institutions and its democratic values, and insist that under God, we will emerge victorious from our current difficulties,” he said.
BY YAW KYEI