Ghana is one of the star performers of Sub-Saharan Africa. It recently revised its GDP accounts and now, “Ghana is recognized as a lower-middle-income country rather than a poor country as it had previously been classified (World Bank 2011).”
And it’s starting to have middle income country problems!, its current account deficit was 12.3% of GDP last year, and inflation is running well over its not-too-stringent target of 9.5%.
Given the surge of foreign financial investment into Ghana (the flip side of the big CA deficit and the probably welcome emerging market problem I referred to), its currency should probably be appreciating.
But it isn’t, and the Central Bank has curbed currency trading and raised its discount rate to 18% to defend the Cedi.
Welcome to the world of being an emerging market, Ghana. For all the headaches that come with it, I wish more SSA countries achieve this status very soon.