Ghana’s head of treasury, Yao Abalo, has declared that the country’s local currency, the Cedi, will be much more stable this year, after it fell 31 percent against the dollar in 2014. The senior central bank official told Reuters that the Cedi will be propped up by robust interventions.

Abalo said the central bank viewed the current pressure on the cedi as seasonal and temporary, and had begun boosting liquidity support to calm market nerves. “We have started increasing our support for the market and we will continue to do so vigorously this year, in addition to other plans to ease foreign exchange uncertainties,” Reuters quoted him.

Miserable 2014

Ghana’s 2014 was characterised by economic storms of huge budget deficit, currency free-fall, spiralling government debt, as well as rising costs of living which drew protesters to the streets. Ghana was once hailed as the shining star of ‘Africa Rising’ during its economic emergence in the mid-2000s, driven by exports of gold, cocoa and oil, which culminated in its successful re-denomination of its currency.

But things have since gone sour despite several measures by the government to stem the decline. The Cedi, re-denominated in July 2007 to a rate of GH₵0.9315 to US$1 – the highest valued currency unit ever issued by a sovereign country in Africa, fell over 250 percent to GH₵3.35 as of August 04 2014. However, it gained some strength by the end of the year, closing at GH₵3.18 to a dollar. Despite this little recovery, 2014 was still the re-denominated Cedi’s worst year, as it lost over 35 percent of its value between January and December.

Ghana’s economic woes have led the government to seek an IMF bailout of about $1.5 billion as part of efforts to stabilise the economy and halt a slide in the cedi. The goverment is hopeful that with the IMF bailout plan and the several cost cutting and revenue boosting economic reforms it is putting in place, the currency can begin to recover in 2015. The increase of domestic gas supplies to the market is one of the measures the government is implementing in order to provide cheaper fuel for power generation and minimise the burden of oil imports on the currency. it has struck a $500 million deal between Quantum Power Ghana Gas and Golar to build an LNG Terminal. When completed, the facility is projected to save power producers in Ghana more than a quarter of a billion dollars annually in fuel costs.