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The Ghanaian Economy
bility in oil prices together with better crop yields have
resulted in a reduction of inflation (CPI) from 20.5% in
March 2009 to 9.52% in June 2010. The trend in infla-
tion led to the lowering of the policy/prime rate by 200
basis points to 16% in February 2010 and as at the
end of the first half of 2010, the MPC had reviewed
its policy rate further down to 13.5%. The impact of
this trend on cost of borrowing has been positive. It
has led to many of the banks in Ghana to reduce their
base rates to between 24.7% to 32%.
Exchange rates
The first half of 2009 saw a Ghanaian cedi that
continued to depreciate against the major foreign
currencies; US Dollar, British Pound and Euro. Cur-
rently, the exchange rate of the cedi to the US dollar
ranges between GH¢1.45 to GH¢1.50.
In 2008, the cedi depreciated against the US dollar
by 22.17% which was the highest rate after it depre-
ciated by 49.9% in 2000. (source: B&FT). Presented
below is trend of exchange rate movements January
2004 to July 2010.
Employment
Ghana’s population is estimated to have grown by
about 1.928% to 23,382,848 at 2009 since the last
census in 2000. Constituted in this is an economical-
ly active population estimated at about 10.33 million
(Source: IMF, World Economic Outlook Database,
October 2009). The current minimum wage stands
at 2.655 GH cedis which is generally considered low
compared to that of the ECOWAS sub-region.
Government is embarking on a wage policy reform
and has agreed with labour on the implementation
of the Single Spine Pay Policy, effective July 2010.
This is to implement new comprehensive pay policy
and structure, spearheaded by the Fair Wages and
Salaries Commission, in order to reduce the pay ad-
ministration fragmentation and pay disparities that
currently exists. Jobs from the different service clas-
sifications will be mapped for the first time to a single
pay spine. Job evaluation will identify equivalent job
values across the service classifications and enable
the establishment of appropriate pay ranges which
will provide the foundation for bringing more equity
considerations into pay awards and negotiation. This
outcome will be measured by the implementation
of new pay salary ranges, by the completion of all
wage negotiations earlier in the financial year, and
by the proportion of public sector workers paid in ac-
cordance with the unified pay spine. (Source: World
Bank).
Balance of Payments
Ghana’s balance of payments improved significantly
over the first three quarters of 2009, recording an
Source: Ministry of Finance
Source: IMF Country Data on Ghana (World Economic
Outlook Database, October 2009)
25%
20%
15%
10%
5%
0%
Jan ´09Feb ´09Mar ´09Apr ´09May ´09Jun ´09Jul ´09Aug ´09Sep ´09Oct ´09Nov ´09Dec ´09Jan ´10Feb ´10Mar ´10Apr ´10May ´10Jun ´10 Units
Parameter
Inflation
(average)
Inflation
(end-of-year)
2010
10.15
9.21
2011
8.43
8.00
2012
4.45
5.00
2013
5.00
5.00
Trend in Exchange Rate Movements
Forecast Growth - Inflation