Government has announced it will inject a capital of US$2 billion into the economy to curtail the sustained depreciation of the cedi against major trading currencies.
This was captured in a circular released by the Presidency on March 23, 2022.
The Presidency said the move forms of measures adopted by government to mitigate the current economic challenges in the country.
In a Twitter post on Wednesday, the Presidency outlined four measures government has approved during its crunch cabinet meeting held at the Peduase Lodge last weekend.
1. Cabinet agrees border reopening within 2 weeks
Ghana’s land borders are set to reopen within 14 days.
This is part of agreements reached at the three-day crunch Cabinet meeting led by President Nana Addo Dankwa Akufo-Addo.
The land borders, which were shut in March 2020, are to be reopened subject to land protocols.
2. Government cuts salaries appointees by up to 30%
Government says it will reduce the salaries of appointees by 30%.
The move is to protect social interventions such as the School Feeding Programme.
Salaries of ministers, heads of state enterprises as well as heads of municipal and district assemblies are to be affected.
3. Policy rate increased substantially to 17%, cost of loans to go up
The Bank of Ghana on Monday, March 21, 2022, announced that the monetary policy rate has been reviewed from 14.5% to 17%.
In the face of a rising economic crisis and increasing inflation, the bank of Ghana seeks to control the cedi’s depreciation by controlling the inflows and outflows of money into the system.
Factors including high inflation, depreciation of the cedi, and global financial constraints among others have been the major causes of the increments in the policy rates.
This will lead to an increase in the cost of loans in the country.
4. Government to pump US$2 billion to rescue cedi
The country is planning to inject an amount of US$2 billion into the country’s dollar reserves towards stabilizing the exchange rate.
This is to help the ailing economy which has continued depreciating and is currently being sold above 8 cedis at various forex bureaus.
Meanwhile, the Chairman of the Economic Management Team, Vice President Mahamudu Bawumia is expected to address the country on the status of the economy in April.