Grain Imports Amid Potential Drought-Induced Food Shortage Likely to Weaken Cedi – Finance Minister
Ghana’s plan to import grain to make up for a potential drought-induced food shortage is likely to weaken the cedi, says Finance Minister Dr Mohammed Amin Adam.
Adding that, the weakening of the cedi is likely to raise the risk of food inflation contributing to an increase in headline inflation.
The country’s headline inflation for the month of July is 20.9%.
Per recent data, the cedi lost 0.31% against the dollar, 1.82% against the pound, and 3.76% to the euro on the retail market. It sold at GHS 16.28 to a dollar on Monday, August 26, 2024, taking its year-to-date loss to 24.57%.
Ghana is banning the export of some grains including rice, corn, and soy to avert a drought-induced food shortage in the country.
Drought and near-drought conditions over the past two months have increased the risk of crop failure in a part of the country responsible for about 62% of Ghana’s grain production, Agriculture Minister Bryan Acheampong told the press on Monday.
The six affected regions are mostly in the north.
As much as 1.8 million hectares of land are at risk and farmers growing food on roughly half that area have already been impacted, he said.
“We are forecasting a significant shortfall in grain availability,” said Mr Acheampong. “Without any interventions, this could lead to a nationwide food shortage.”
Ghana is following countries such as Nigeria and Ivory Coast to restrict grain exports this year to improve food security. This comes after a swathe of Southern Africa – including Zambia, Botswana, and Zimbabwe – suffered the driest February in at least four decades, wiping out crops.
That particular drought was blamed on the El Niño weather phenomenon.
Ghana further plans to raise $500 million to mitigate the impact of the grain shortage, including about $155 million from the World Bank and other development partners.
Authorities will tap the funding to offer some compensation to affected farmers, with payments of 1,000 cedis ($64) per hectare.
