Ghana's Mahama says to support cedi

2012-09-04 17:17

John Dramani Mahama

Accra - Ghana's president John Dramani Mahama said on Tuesday he had instructed his government to maintain policies targeting reduced inflation and support for the cedi currency, and pledged to break with cycles of election-related overspending.

Mahama was making his first economic policy speech since taking over as interim leader following the death of the late president John Atta Mills in July. He is running as the ruling party's candidate in an election due in December.

"I've instructed the economic management team to continue to execute the following without delay, one: to hold down inflation, two: continue to hold down the depreciation of the cedi," Mahama said.

Ghana's economy has been one of the world's fastest growing since oil production in 2010 but the cedi currency has lost some 17% against the dollar this year, largely on a surge in demand for imports.

It steadied last month having fallen to just over 1.95 to the dollar and has begun to slowly gain ground in recent weeks. Reuters data showed it was trading at just over 1.93 on Tuesday morning.

Mills came to power after a closely-fought 2008 election that boosted Ghana's democratic credentials but he inherited an economy that had been crippled by election-related spending pushed through the by out-going government.

"We are determined to break the cycle of overspending in an election year and we will ensure we achieve that this year," Mahama said.

Shortly before Mills's death, his government asked parliament to allow extra spending this year, which spooked some investors but the International Monetary Fund said had been agreed in advance.

In a move seen as bolstering his economic team, Mahama has named Kwesi Amissah-Arthur, who was Ghana's Central Bank Governor since October 2009, as his running mate.

Ghana's annual inflation rate increased for the fifth month in a row in July to 9.5% but the figure remains in line with the Bank of Ghana's targeted band of single-digit inflation this year and is far from the high 20.50% seen in July 2009.

- Reuters