Deloitte, a leading international audit and consultancy firm operating in Ghana says whilst they acknowledge the various policy interventions intended to mitigate the country’s foreign exchange risks, including streamlining gold sales through the GoldBod, intensifying forward FX auctions, reducing public spending and the budget deficit, and prioritizing import substitution, they have identified the declining cocoa production as a major issue that must be addressed.
The professional services firm says addressing the declining cocoa production issue will help in boosting Ghana’s forex reserves and reduce the FX demand pressure.
“Overall, we expect the slowdown in cedi depreciation in recent times to continue for the rest of the year primarily due to the expected inflows of forex from the IMF programme and the World Bank Development Policy Operation (DPO) funding,” Delloitte said in its analysis of the 2025 budget statement.
Deloitte further noted that the projected decline in inflation by the end of 2025 can be achieved if the government can follow through with the various measures designed and intended to be deployed for addressing the issue of high inflation.
In particular, Deloitte said, the Agriculture for Transformation Agenda promises to address key inefficiencies along various food value chains, thereby spurring production and taming food inflation, which has been the main driver of the high inflationary pressures the country has faced.
“We further recommend that government considers the impact of emerging geo-political risks in Europe, America and Russia and the potential trade wars that may result from these and, to the extent feasible, put in measures to address any excesses from these geo-political risks that may impact adversely on our pricing developments,” the professional services firm suggested.
According to the Economist Intelligence Unit, the relative slow down in depreciation can be largely attributed to improved foreign-exchange liquidity and a strong and growing current-account surplus.
Going forward, the government plans to implement the following measures to reduce pressure on the exchange rate: Establishment of the Gold Board (GoldBod) to enhance the generation of forex; Intensifying forward auctions of forex to stabilize the exchange rate; Fiscal consolidation that focuses on reducing public spending and budget deficit; and; Ramping up domestic production of key imports items to reduce pressure on the exchange rate.
