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General News of Thursday, 30 November 2000

Source: GNA

Ghana hit by cedi shortage

First, it was a shortage of foreign currency, especially the US dollar, which hit Ghana in the first quarter of the year. Now, the Bank of Ghana, the country's central bank, is reporting a shortage of cedis, the local currency.

Reports from the Ghanaian business community say demand for cedis is not being met by the central bank. One foreign investor puts it this way: "If you call at the central bank with cedis now, the bank will be prepared to give you any quantity of forex you want."

Earlier in the year, looking for US dollars in Ghana was a nightmare people in business spent their time searching for dollars to pay for the foreign inputs required to keep their businesses going.

They were uncertain where the next dollar was coming from, and at what rate to the cedi, which was depreciating at a fast rate.

Analysts say the cedi it started the year at 3600 to the US dollar, but by last Friday had been trading at 6880 is enjoying some level of stability now.

Reacting to concerns about the current situation, the central bank said recently: "As an interim measure to improve the situation pending delivery of fresh currency, steps have been taken to put back into circulation slightly used currency notes." It explained that the demand for cash had increased as a result of the 2000-2001 main crop season, which has attracted an increase of about 40% over last year's producer price.

Another reason for the high demand was the withdrawal of large amounts of cedis for political party campaigns, the statement said. Ghanaians go to the polls on December 7 to elect a successor to president Jerry Rawlings and a 200-member legislature.