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Good News To Ghanaians As The President Is Planning To Do This, To Revive The Cedi Against Dollar

Bright Simons, the founder and president of mPedigree, has accused the Ghanaian government of taking an unconventional approach to maintaining the stability of the weakening Ghana Cedi.

The Nana Addo Dankwa Akufo-Addo-led administration is negotiating a deal with Ghana's gold mines, the social innovator and political analyst stated in a tweet on August 9, 2022.

According to his sources, these conversations are intended to strengthen Ghana's weakening cedi, but he also indicated that certain problems may result from the action.

"As a measure to sustain the depreciating currency, the government of Ghana is negotiating a contract with the nation's gold mines to purchase a share of the output in local currency.

Three issues stand out:

"A. The reserves to liquidity ratio will continue to be a problem unless the Bank of Ghana (BoG) trades actively.

B. The amount of Cedi risk that the large miners are prepared to take on is constrained by their high costs & liabilities in USD.

"C. The small miner's hedge in dollars in order to dodge increased regulatory attention and the tax limelight. Thus, they rarely take the current PMMC route, Bright Simons tweeted.

As of the end of June 2022, according to information from the Bank of Ghana, Ghana's debt stood at 393.4 billion dollars or nearly 78.3% of its GDP.

Out of this, external debt totals 203.4 billion ($28.1 billion).

In comparison to a 29.5% growth in total debt issuance between June 2020 and June 2021, the government's total debt issuance climbed by 17.6% between June 2021 and June 2022. The government now faces higher borrowing costs on both the domestic and foreign markets as a result of this increased debt issuance and the high level of global inflation in 2022.

Due to investor apprehensions regarding the government's financial situation and the depreciation of the Ghana cedi versus other currencies, the issuance of debt and payment of interest have become more expensive on the international markets. Due to these unfavorable market conditions, the government was unable to issue sovereign bonds in 2022.

Content created and supplied by: Francisca (via Opera News )

Bright Simons Cedi Ghana Ghanaian Nana Addo Dankwa Akufo-Addo-led


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