Business News of 2014-05-23

Ghana begs EU to help solve economic crisis

Trade Minister, Haruna Iddrisu has called on the European Union to help Ghana solve the country’s current economic crisis.

Ghana close to two years now has been facing some economic challenges including high inflation rate, rising budget deficit and increased cost of borrowing among others. Inflation currently stands at 14 .7 percent the highest rate since February 2010.

The World Bank, International Monetary Fund (IMF), Stanbic bank among others have projected that the country’s inflation is likely to end with double digits for this year.

While the local currency the cedi since the beginning of the year has depreciated by over 20 percent against major foreign currencies like the US dollar, British Pound and the Euro. In the midst of the challenges there have been reports that government may seek a bail out from the International Monetary Fund (IMF).

President John Mahama has however dismissed the reports saying he is yet to decide on whether Ghana should make that move. It however appears the country may seek help form donor countries instead of donor institutions to solve its problems.

Trade minister Haruna Iddrisu addressing an EU- Business Forum said Ghana will require the support of European Union to restore macroeconomic imbalances to keep it attractive for investment.

It’s about time you help government out of its eminent crisis in terms of managing our fiscal deficit, you don’t have to wait and keep covering the wound. You want economic stability so that your investments don’t suffer tomorrow if we don’t check the current challenges immediately we will be opening it up to more risk.’ He said.

This is the second time government has publicly appealed for help to donor countries to solve the current economic crisis. Early this week President Mahama receiving the U S Secretary of Commerce on a visit to Ghana stressed the need for the country’s international partners to support Ghana, as it strives to solve its crisis.

So far the US government has expressed its willingness to support government’s home grown solutions in resolving the economic challenges confronting the country. According to the US Secretary of Commerce, Penny Pritzker, America will help Ghana to rectify its fiscal challenges and aid with financial reforms that the government would roll out.

Trade minister Haruna Iddrisu believes the EU can do same. ‘I trust that the EU commissioner as he awaits our signature to complete our EU partnership will be more generous. The EU must release the 60 million Euro that our minister of finance has been asking for the last 2 months so he can support his budget which will get him out of the current challenges facing our economy’.

President Mahama late last year conceded that the country was facing some economic challenges but described them as short-term fiscal challenges, according to him the country’s medium term prospects were bright.

Source: Citifmonline.com
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