‘Declines in cocoa, gold prices contributory to Cedi depreciation’

Vice President Paa Kwesi Bekoe Amissah-Arthur has attributed the fall of the local currency to the weakening of the country’s commodity prices in the world market.

According to him, the situation has decreased the country’s earnings from exports and reduced government’s capacity to finance imports, thereby increasing pressure on foreign exchange reserves.

Vice President Amissah-Arthur was speaking at the opening on Tuesday, February 11, 2014 of the 4th American Chamber of Commerce Summit in Accra.

Addressing the gathering made up of business firms from the United States of America (USA), Vice President Amissah-Arthur said one of the major causes of the depreciation of the Cedi is the decline in prices of gold and cocoa, the country’s two major export earners.

He outlined that cocoa price has seen a decline of about 20 per cent since 2011 while that of gold has gone down by 20 per cent since 2011. “In 2013, Ghana lost $1.3 billion potential export revenue due to price declines on these two products,” he said.

“These have put pressure on our foreign reserves and contributed to high rates of currency depreciation,” the former Governor of the Bank of Ghana added.

The Vice President said though the recent measures announced by the Bank of Ghana to stabilize the exchange rates has engendered mixed reactions, it was one of the key economic reforms of the early 1980s and has remained a government policy.

“While in the short term the measures the Bank of Ghana…may be frustrating to importers, we know that the Ghanaian people will appreciate the necessity for them,” he stressed.

He noted that the reforms have yielded significant economic successes. “It is, therefore, not our intention to abandon the policy that has contributed to importantly improving livelihoods.”

The American Summit is scheduled to close on Wednesday, February 12, 2013. It is on the theme: “Building the American Brand in Africa” and hosted by the Africa Bureau of the US Chamber of Commerce.