The interest rate on government’s 91 day T’ Bills increased from 13.3 per cent in 2017 to 14.6 per cent in 2018, while the interest on the 182 day T’ Bills rose from 13.8 per cent to 15 per cent in 2018. Interest on the seven-year bond also rose from 16.3 per cent to 21 per cent, with the 10-year bond increasing from 16.7 per cent to 21.2 per cent.
The interest on the 15 year bond rose from 17.2 per cent to 21.4 per cent.
Increasing consumption imports
Mr Adongo also blamed the depreciation of the cedi on the increasing consumption imports.
“It is worrying that Ghana’s non-oil imports are now shifting towards increasing consumption imports and declining capital and intermediate goods imports. Imports of capital goods to expand manufacturing and productive capacity to support local production and job creation declined from US$2.2 billion in 2016 to US$ 2 billion in 2017 and further to US$1.9 billion in 2018,” he explained.
“Similarly, imports of intermediate goods for production, contrary to the promise to eliminate import duty on intermediate goods to increase it imports, has declined from US$5.8 billion in 2016 to US$5.2billion in 2017 and further down to US$5.1 billion in 2018,” he added.
Strangely, imports of consumption goods have been increasing from $2.1 billion tin 2026 to $2.4 billion in 2017 and $2.6 billion in 2018.
He said the government was gradually reversing all the gains of local manufacturing and creating an import of consumption goods economy.
“This puts more pressure on the cedi as importers are demanding dollars,” he noted.
Low levels of net international reserves
Mr Adongo also pointed out that the country’s low level of net international reserves, which currently stand at US$3.2 billion, was increasing external vulnerabilities.
He said that was also creating uncertainties for the country to deal with increasing demands.
Source: Daily Graphic