Accra – Ghana’s government would pump $2 billion (R29.5bn) into the economy to rescue the cedi currency, the presidency wrote on Twitter on Wednesday, adding that it would cut political appointees’ salaries by up to 30% as part of measures to ease its financial problems.
The West African country is facing rampant inflation, a depreciating local currency and a heavy debt burden that has dented investor confidence and could build up into a debt crisis. The cedi has weakened by about 20% against the dollar this year, exacerbating its problems.
The announcement from President Nana Akufo-Addo follows the central bank’s decision on Monday to hike its main lending rate by 250 basis points to 17%, the largest increase in Ghana’s history.
Ghana was long seen as a rising star among Africa’s emerging market economies, but underwhelming oil revenues and supply chain disruptions amid the Covid-19 pandemic have dampened expectations.
The Bank of Ghana raised its main lending rate by 250 basis points to 17%, signalling an aggressive stance against the rocketing price of goods from flour to sugar to fuel, and against a depreciating local currency that has dented investor confidence.