Ghana may face Forex pressure if food imports become necessary – Amin Adam

Finance Minister Dr. Mohammed Amin Adam has predicted a potential rise in demand for foreign exchange if Ghana is compelled to import food to supplement the existing supply due to the ongoing drought in Northern Ghana.

Speaking at a press conference in Accra on Monday, August 26, Dr Amin Adam expressed cautious optimism that substantial progress will be made in securing the country’s food supply.

However, he acknowledged that importing food to meet market demands could negatively impact the economy.

He also mentioned that he has yet to discuss with Agriculture Minister Bryan Acheampong the most effective strategies for sourcing food to stabilize the markets and provide necessary food relief.

“I’m very optimistic that we will make significant progress, but we also know that our inflation basket is dominated by food inflation. When you see food shortage, and the effect on prices, you should expect that inflation will respond.

He added, “And will respond in a way that you do not want. Then we are also talking about bringing in food for the markets and also providing food relief. I’m yet to discuss with the minister how we are going to source the food, he may be running away from mentioning imports. But we already import a lot of our food. And so, one other way that the economy may be affected is from the perspective of foreign exchange.

“People are complaining the cedi is getting weaker against the dollar, the rate is higher against the dollar. And so, if you are going to bring in more food to support what we already have, you need to back it with forex. And therefore, the demand for the dollar will certainly increase. Relative to what we anticipated if we didn’t have to meet the additional food requirements. Some of which may come through inputs.”

He emphasized that the drought would have far-reaching consequences, impacting the economy in various ways.

“In different ways, the economy is going to be affected.”

Northern Ghana is currently grappling with a severe drought that has sparked widespread concerns about food security and the livelihood of thousands of farmers.

The region has been without rain for over two months, with the extended dry spell stunting crop growth and leaving farmers with little hope for a successful harvest.

Source: Citi Business News