Gov't Pins Hopes On Cocoa Loan -To Arrest Cedi Fall

Dr Kofi Wampah

Dr Kofi Wampah
Government intends to use the cocoa syndicated loan and the Eurobond issuance, which are estimated at almost US$3 billion, to help stabilize the cedi in the second half of this year, Dr Kofi Wampah, the Governor of the Bank of Ghana (BoG) has stated.

Managers of the country's economy have also pinned their hopes on the onset of gas production in the fourth quarter of this year to help reduce oil imports going forward.

In a speech read on his behalf by Dr Issahaku, 2 nd Deputy Governor at the 33 rd Annual General Meeting (AGM) of the Ghana Association of Bankers o Wednesday in Accra, the Governor of the Central Bank noted: 'Pressures on the local currency still persist although there is some moderation in the pace of depreciation on a month-on-month basis. The pressures are a major concern due to the adverse sequences of the depreciating currency on the economy.'

However, he asserted that the current depreciation of the cedi against major currencies, which is inimical to import-driven businesses and on the flip-side supports export-oriented companies, lent itself to profitable funding opportunities for banks to foster economic growth.

Touching on ongoing reforms in the banking industry, he said inherent vulnerabilities and risks, coupled with lessons from the global financial crisis, called for a re-think of the legal and regulatory regime of our industry. Following that, a draft proposal of the bank and Specialised Deposit-Taking Institutions Bill has been prepared and is currently undergoing review.

Again, the Governor said the new bill attempts to incorporate some of the missing links in the current Act, including but not limited to Consolidated Supervision, reinforcement on Exposures of Connected Nature, Prompt Corrective Actions, Islamic Banking and detailed Resolution Framework.'

The aforementioned form part of the revision of the Banking Act, 2004 (Act 673) as amended by the Banking Amendment Act 2007 (Act 738) and the development of a Deposit Protection Bill.

At end-May 2014, the banking and non-bank financial institutions industry was made up of 1,051 institutions comprising 27 class 1 banks, 57 non-bank financial institutions (NBFIs), 139 rural/community banks, 435 licensed microfinance institutions, 388 forex bureaux, three credit reference bureaux and two representative offices of foreign banks.

The total number of bank branches as at end-May 2014 was 892 with the average population per branch being 28,027.

By Samuel Boadi