Ghana's balance of payments deficit worsens to $3.64 billion

Ghana's balance of payments further deteriorated to a deficit of $3.64 billion in December from a $3.4 billion deficit the previous quarter, central bank data showed. The West African nation is facing an economic crisis that saw consumer inflation rise to 54.1 percent last month. The cedi currency has depreciated around 50 percent annually, and interest payments on government debt have swelled to between 70 percent and 100 percent of GDP.

Recent balance of payments woes have been largely driven by a sharp reversal in capital flows, with Ghana's capital account deficit having worsened to $2.18 billion in December from $1.64 billion in September.

At the same time last year, Ghana had a capital account surplus of more than $3.3 billion. Ghana secured a $3 billion staff level bailout from the International Monetary Fund late last year, but must restructure its debts in order to obtain executive board approval. The country has requested to restructure its bilateral debt under the Common Framework platform supported by the Group of 20 major economies, and is currently negotiating terms for a domestic debt exchange programme with local bond holders.

According to an earlier report, Ghana's producer price inflation slowed to 52.2 percent year-on-year in December from 78.1 percent the previous month, statistics service data showed. The crisis-hit nation's consumer price inflation accelerated to 54.1 percent year-on-year last month, data released last week showed, driven by rising fuel, utilities and food costs. International reserves have dwindled to less than two months of import cover.

Anthony Krakah, head of the statistics service's industrial statistics division, said the steep decline in month-on-month producer inflation could bode well for next month's headline inflation figure. "Consumer inflation is likely to decline if the cedi stabilises, but we don't know for sure," Krakah told Reuters.

Ghana's troubled cedi currency saw rapid appreciation against the dollar in December after a staff level agreement for a $3 billion IMF support package was reached at the start of that month. It has since fallen back towards record lows.