Cedi's continuous decline due to huge govt spending
 
Posted on: 2013-Nov-05        
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ECOBANK is attributing the Ghana cediís continuous decline to excessive spending by government.

The state as at August this year has spent 7 percent more than what it has generated as revenue.

Analysts say this is likely to go up by the end of this year because of pressure from organized labour for higher salaries, which would in turn increase the wage bill.

ECOBANK is currently putting the local currency rate of depreciation at almost 17 percent. This was after it ranked the Ghana Cedi together with South African Rand and the Swazi lilangeni as the most depreciated currency in Africa.

Speaking to Joy Business from London, Head of research at ECOBANK GROUP, Angus Marcus however suggested some measures the country can adopt in the short term to stabilize the free fall in the cedi's value including revenue mobilization and cost recovery measures such as removing subsidies.

He however justified the Bank's report which ranked the Ghana cedi as one of the most depreciated currency in Africa.

According to figures from the Bank of Ghana, one would need 2 Ghana cedis 41 pesewas (GHc2.40) to get a dollar from a commercial bank.