The World Bank in its Latest Global Economic Prospects Report has forewarned Ghanaians against the cedi’s susceptibility to more pressures in 2023.
The Bank attributed this pressure to the country’s current account deficit and has thus, advised that government puts in place measures to control and direct the country’s current account deficit to sustainable levels.
The World Bank in the report upheld that developments present government with the opportunity to take stringent measures to manage the current account deficit this year in order to ensure that things don’t go out of hand in the succeeding months.
There might be the need to institute policies that will boost exports, the bank advised. This, it believes will be a move that will go a long way to check the current account deficit whilst controlling the larger imports.
World Bank trusts that introducing some of these actions together with instituting policies to check inflation in the coming months will help in stabilizing the economy as well as deal with some of the threats that will negatively affect the local currency.
The Ghanaian currency as it stands now, has started feeling the first quarter pressure as it goes back into the highs after performing well in the fall of December, 2022.
The cedi is presently in the GH12 range against the dollar even for some of the major commercial banks.
The World Bank fears that, should Ghana not succeed in securing its support loan from the International Monetary Fund (IMF), the country will be back to its macroeconomic challenges by the end of the first quarter or latest by the second quarter of the year, 2023. The outlook will be even more severe on the local currency, the bank noted.
According to the 2023 Budget reading, Ghana’s current account during the first 9 months of 2022 stood at US$1.83 billion.
World Bank to Support Countries Pursuing Economic Transformation
Despite the prevailing macroeconomic challenges of the country, the World Bank has expressed satisfaction of Ghana’s economic transformation over the last 10 years.
This is after the country has made some progress in some of its economic indicators as well as grown its Small and Medium- Scaled Enterprises (SMEs) Sector.
Speaking at the launch of the bank’s growth program for SMEs, Mehnaz Safavian, the Lead Financial Sector Specialist for Finance, Competitiveness and Innovation Global Practice (FCI) in the South Asia Region (SAR) at the World Bank, noted that the bank will encourage countries pursuing economic transformation.
“It has been so interesting to see the transformation from when I left and said goodbye to my Ghanaian colleagues in France to coming here a few months back and really seeing a structural change in the economy. After watching that shift and that growth, I’m just feeling a sense of pride from the World Bank because we’ve been truly a part of this story…
“We are not just here for the money, we’re here to see the outcomes and to see the transformation and it’s just so gratifying.”
Mehnaz Safavian
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