Bawumia feared Sri Lanka-style food crisis as Ghana battled forex shortages

Dr Mahamudu Bawumia, the flagbearer of the New Patriotic Party, expressed concern that Ghana could face a crisis similar to Sri Lanka's due to severe foreign exchange shortages. The country was grappling with a balance of payments crisis following the Russia-Ukraine war, which restricted access to international capital markets and limited foreign exchange availability.

Bawumia particularly noted the situation in Sri Lanka, where people faced shortages of essential goods, including food, due to a lack of foreign exchange. He feared that Ghana might also experience a similar situation because the country did not possess enough foreign exchange to cover its economic needs. The problem was further exacerbated by restrictions on the Bank of Ghana's ability to intervene in the foreign exchange market, with the central bank limited to interventions of approximately $80 million per month, while monthly demand for foreign exchange significantly exceeded this amount.

This resulted in a depreciating exchange rate, causing concerns about Ghana's capacity to finance imports and maintain economic stability. To mitigate the crisis, the previous government introduced the Gold-for-Oil programme and the Gold-for-Reserves initiative, which helped stabilize the currency and build reserves. By the end of 2024, Ghana had accumulated significant foreign exchange reserves following the implementation of these measures.