As compared to yesterday’s trading of a buying price of 10.8655 and a selling price of 10.8763. At a forex bureau in Accra, the dollar is being bought at a rate of 12.65 and sold at a rate of 12.90.
Against the Pound Sterling, the Cedi is trading at a buying price of 12.2747 and a selling price of 12.2892 as compared to yesterday’s trading at a buying price of 12.3769 and a selling price of 12.3903.
The Euro is trading at a buying price of 10.6848 and a selling price of 10.6965 as compared to yesterday’s trading at a buying price of 10.6909 and a selling price of 10.7007.
At a forex bureau in Accra, Euro is being bought at a rate of 11.70 and sold at a rate of 12.00.
The South African Rand is trading at a buying price of 0.5988 and a selling price of 0.5993 compared to yesterday’s trading at a buying price of 0.6035 and a selling price of 0.6040.
The Nigerian Naira is trading at a buying price of 40.5017 and a selling price of 40.5670 as compared to yesterday’s trading at a buying price of 40.5017 and a selling price of 40.5670.
At a forex bureau in Accra, Nigerian Naira is being bought at a rate of 14.00 Naira for every 1 Cedi and sold at a rate of 16.50.
More than half of banks in the country have approved plans to adopt and integrate Environmental, Social and Governance (ESG) strategies into their business operations, a recently-released study by Price Waterhouse Coopers (PwC) has shown.
In its 2022 Ghana Banking Survey Report – wherein it surveyed 21 out of the 23 registered universal banks – the advisory notes that 62% of bank executives it surveyed confirmed the existence of such plans, with 86% indicating that the subject is discussed at board level, at least, once every year.
“Insights from the survey show a clear-cut interest in embracing ESG strategies by banks, both at the board and senior management levels,” PwC’s Country Senior Partner, Vish Ashiagbor, noted in remarks accompanying the report.
Additionally, 71% of the survey’s respondents believe ESG should be an integral part of their credit decision-making; 63% say the concept is at its nascent stage, and 48% of them describe regulatory leadership and initiative as the main drivers of implementing ESG.
The top executives pointed to customer satisfaction and employee engagement as the top-two non-financial metrics they are prioritising – ostensibly because these have the most direct consequences on their bottom line.
PwC attributes the growing ESG focus, in part, to the Sustainable Banking Principles and Sector Guidance Notes introduced as a consequence of sustained collaborative efforts from key industry stakeholders – including the Bank of Ghana (BoG), Environmental Protection Agency (EPA) and Ghana Association of Bankers (GAB).
“Even though some banks seem to have had some form of ESG strategies in place prior to the release of the principles and sector guidance notes on the subject matter by the regulator, many woke up to the issue only after the regulator’s publication – with only a very few having in place a clear strategy which goes beyond just satisfying the regulator compliance matters required as at now,” Ashiagbor elaborated.
Despite gains made in awareness and adoption of self-initiated ESG frameworks by the banks, the survey showed that only 48 percent of them have more than 50% of their management team with formal training on the subject. This prompted a call from PwC to accelerate training.
“There is a need for banks to intensify training on ESG for their staff to advance the ESG agenda and harness its full potential… It may be difficult to achieve more in ESG if key decision-makers in the industry lack adequate knowledge on the subject,” PwC noted.
This further prompted the advisory firm to advocate the development of a roadmap for implementing sustainable banking practices, with the conviction that “banks will show more commitment and be more accountable to the implementation process”.
On his part, the chief executive officer of the Ghana Association of Bankers (GAB), John Awuah, said the growing interest in ESG is unsurprising, as banks had even before lessons from the pandemic begun shifting away from a narrow focus on shareholder investment maximisation to a broader scope that incorporates long-term sustainability, healthy financial systems and the transition to a green economy.
“Banking institutions’ strict adherence to sustainable banking principles in prior and recent years has seen some demonstrable improvements. The adherence is a reflection of society’s desire to engage and transact business with banks characterised by strong ethical standards and values,” he said, noting that charting this course will see banks lower their costs, have stronger governance structures, attract environmentally-conscious capital and contribute to sustenance of the world.
He is confident that the medium-term will see growth in the subject, as the approach adopted by local banks is not only consistent with global best practices but also fits into the country’s development needs.
Tax lead at PwC, Ayesha Bedwei Ibe, also believes that in addition to policies which incentivise sustainable finance and provide punitive measures for harmful practices, the pressure from investors will see more banks embrace sustainability and enhance their tax transparency.
These developments come as concerns over sustainability of the planet have come into sharper focus, with a growing interest in ESG. Sources such as the ESG and Thematic Investing unit for Europe, the Middle East and Africa (EMEA) at Bloomberg Intelligence is forecasting that ESG assets will grow 10x between now and 2025, from US$530 million to more than US$53 billion.
The 2022 PwC Ghana Banking Survey Report has revealed that 86 % of bank executives confirmed discussing Environmental, Social and Governance (ESG) matters more than once a year.
Beyond having board discussions, 62% of bank executives confirmed the existence of an approved plan to adopt and integrate ESG in the business operations.
Insights from the survey showed a clear-cut interest in embracing ESG strategies by banks, both at the board and senior management levels.
PwC said “we view the general willingness to have ESG strategies as partly due to the collaborative effort between the Bank of Ghana, Environmental Protection Agency (EPA) and the Ghana Association of Bankers (GAB) in drafting the Sustainable Banking Principles & Sector Guidance Notes. It is noteworthy that there seems to be a general willingness for the banks to embrace ESG principles into their operations”.
ESG Motivation
When asked about what motivated the banks in assenting to the Ghana Sustainable Banking Principles Commitment and Endorsement Statement, half of the surveyed banks expect adherence to these guidelines would enhance reputation and relationships with stakeholders and create long term value.
These motivating factors are based on the understanding that several investors presently prioritise ESG information in their investment decisions, much more than in the past.
Obviously, banks were motivated beyond regulatory compliance for ESG, the survey explained.
ESG Implementation
The report said despite the significant attention drawn to ESG, industry players suggest that incorporation of the related principles into the culture of the banks is still low.
63% of the respondents believe that the concept of ESG is in the incipient stages in the banking industry with most banks assessing their implementation needs and putting the necessary structures in place for full integration.
The survey revealed that the banks are, however, optimistic and willing to incorporate ESG factors into their practices with support from the regulator.
Also, 48% of the respondents propose that – for them – regulatory leadership and initiative are the main drivers of the implementation of ESG.
ESG & Risk Management
Insights from the survey reveal the industry’s understanding of how ESG issues impact banks’ lending decisions.
71% of the respondents recognise ESG as an integral part of the credit decisions made during the credit management process and, as such, the respective report and information are obtained as part of the credit analysis process.
Way forward
The report said industry players, international partners and regulators alike admit that there is still more to be done in capacity building, monitoring and implementation in sustainable banking practices. This was confirmed, as only 48% of banks had more than 50% of their management team trained on ESG-related issues in banking with many banks yet to have a comprehensive strategy and implementation plan in place beyond the current regulatory requirements.
The report said there is therefore the need for ESG consultants and other stakeholders with expertise to assist banks to improve on ESG strategy formulation and implementation, risk management, and disclosure and reporting.
In conclusion, PwC said ESG principles and practices may be largely new to the Ghanaian banking sector but same cannot be said of the benefits and opportunities thereof ranging from low cost of funds, improved risk management practices leading to lower non-performing loans and impairment to better internal and supply chain ESG adherence leading to not only investor acceptance but also the acceptability of other stakeholders such as customers and the larger society in which these banks operate.
It therefore shared the excitement expressed by the banking industry in these opportunities and look forward to more collaboration among the stakeholders for the exploitation and realisation of the associated benefits.
21 banks out of the registered 23 universal banks were surveyed.
President Akufo-Addo says the decision to go to the International Monetary Fund (IMF) for a bailout was one of the most difficult choices he had to make to save the economy.
He cited the rising cost of crude oil on the international market as one of the factors that compounded the country’s economic woes, and one of the reasons government ran to the IMF for support.
Despite being a tough choice to make, Akufo-Addo says it was in the interest of the country and the economy to go to the Fund.
“You can imagine the difficulties that there were for the Bank of Ghana. So instead of now finding 64 dollars for each barrel of oil, the Bank of Ghana was now having to find 100 plus [dollars] and it stayed like that. In fact, it is only very recently that the price of crude oil has come down.
“I am just using this one very important fact to tell you what drove the government to this very difficult decision of going to the IMF. I don’t have any difficulty in admitting that it was a difficult decision for me to take but I felt that in the interest of the country, in the interest of our economy, we had to make that decision,” he said in an interview on Kumasi-based OTEC FM.
Amid a free-falling cedi, a rising cost of living, and skyrocketing fuel prices, the government is at the doors of the International Monetary Fund (IMF) to prevent a full-blown economic turmoil.
Meanwhile, the Minority on Parliament’s Finance Committee has cast doubts over government’s chances of closing a deal with the IMF by end of year.
Finance Minister Ken Ofori Atta had indicated that government was working hard to get a deal by November this year.
But speaking to Joy Business’ George Wiafe in Washington DC at the just ended Annual IMF/World Bank meeting, Ranking Member on the Committee, Dr Ato Forson said Ghana can only secure a deal with the IMF by the first quarter of 2023.
On the Interbank forex rates from the Bank of Ghanaon, October 18, 2022, the Ghana Cedi is trading against the dollar at a buying price of 10.8655 and a selling price of 10.8763.
As compared to Monday’s trading of a buying price of 10.7115 and a selling price of 10.7223. At a forex bureau in Accra, the dollar is being bought at a rate of 12.38 and sold at a rate of 12.65.
Against the Pound Sterling, the Cedi is trading at a buying price of 12.3769 and a selling price of 12.3903 as compared to Monday’s trading at a buying price of 11.9916 and a selling price of 12.0057.
At a forex bureau in Accra, the pound sterling is being bought at a rate of 13.30 and sold at a rate of 13.70.
The Euro is trading at a buying price of 10.6909 and a selling price of 10.7007 as compared to Monday’s trading at a buying price of 10.4265 and a selling price of 10.4370.
At a forex bureau in Accra, Euro is being bought at a rate of 11.55 and sold at a rate of 11.85.
The South African Rand is trading at a buying price of 0.6035 and a selling price of 0.6040 compared to Monday’s trading at a buying price of 0.5851 and a selling price of 0.5857.
At a forex bureau in Accra, South African Rand is being bought at a rate of 0.45 and sold at a rate of 0.80.
The Nigerian Naira is trading at a buying price of 40.5017 and a selling price of 40.5670 as compared to Monday’s trading at a buying price of 41.1033 and a selling price of 41.1248.
At a forex bureau in Accra, Nigerian Naira is being bought at a rate of 14.00 Naira for every 1 Cedi and sold at a rate of 16.50.
As compared to Friday’s trading of a buying price of 10.7061 and a selling price of 10.7169. At a forex bureau in Accra, the dollar is being bought at a rate of 12.20 and sold at a rate of 12.50.
Against the Pound Sterling, the Cedi is trading at a buying price of 11.9916 and a selling price of 12.0057 as compared to Friday’s trading at a buying price of 10.8373 and a selling price of 10.8501.
At a forex bureau in Accra, the pound sterling is being bought at a rate of 12.70 and sold at a rate of 13.10.
The Euro is trading at a buying price of 10.4265 and a selling price of 10.4370 as compared to Friday’s trading at a buying price of 10.4653 and a selling price of 10.4767.
The South African Rand is trading at a buying price of 0.5851 and a selling price of 0.5857 compared to Friday’s trading at a buying price of 0.5854 and a selling price of 0.5859.
At a forex bureau in Accra, South African Rand is being bought at a rate of 0.45 and sold at a rate of 0.80.
The Nigerian Naira is trading at a buying price of 41.1033 and a selling price of 41.1248 as compared to Friday’s trading at a buying price of 41.0773 and a selling price of 41.1707.
At a forex bureau in Accra, Nigerian Naira is being bought at a rate of 13.00 Naira for every 1 Cedi and sold at a rate of 15.50.
As compared to Friday’s trading of a buying price of 10.7061 and a selling price of 10.7169. At a forex bureau in Accra, the dollar is being bought at a rate of 12.20 and sold at a rate of 12.50.
Against the Pound Sterling, the Cedi is trading at a buying price of 11.9916 and a selling price of 12.0057 as compared to Friday’s trading at a buying price of 10.8373 and a selling price of 10.8501.
At a forex bureau in Accra, the pound sterling is being bought at a rate of 12.70 and sold at a rate of 13.10.
The Euro is trading at a buying price of 10.4265 and a selling price of 10.4370 as compared to Friday’s trading at a buying price of 10.4653 and a selling price of 10.4767.
At a forex bureau in Accra, Euro is being bought at a rate of 11.20 and sold at a rate of 11.60.
The South African Rand is trading at a buying price of 0.5851 and a selling price of 0.5857 compared to Friday’s trading at a buying price of 0.5854 and a selling price of 0.5859.
At a forex bureau in Accra, South African Rand is being bought at a rate of 0.45 and sold at a rate of 0.80.
The Nigerian Naira is trading at a buying price of 41.1033 and a selling price of 41.1248 as compared to Friday’s trading at a buying price of 41.0773 and a selling price of 41.1707.
At a forex bureau in Accra, Nigerian Naira is being bought at a rate of 13.00 Naira for every 1 Cedi and sold at a rate of 15.50.
WFE, which represents more than 250 market infrastructures in both mature and emerging economies, is the premier industry organisation for exchanges and clearing houses (CCPs) globally and is widely regarded as the gold standard for best practices in regulated securities and derivatives markets.
At the end of 2021, the umbrella organization’s 59,400 listed firms had a combined market value of more than US$122.94 trillion.
Describing the best practices which WFE brings to the table in an exclusive interview with the B&FT, the Exchanges’ Managing Director, Ekow Afedzie, said the comprehensive scope of assessment and subsequent adherence to best practices by WFE members offers assurance to the exchanges themselves, and stakeholders who interact with them, of their commitment to the highest standards of fiduciary responsibility.
“Becoming a full member does not mean we are perfect, but means that the highest possible standards are being applied. Not only is what we are doing good enough for Ghana, but it shows that what we are doing also meets the minimum global best practices – and that is a very high standard in running a stock market,” the GSE’s MD stated.
Consequently, investors and issuers can rest assured that their positions will not be compromised, as beyond the national regulator there is a higher authority to appeal to.
Chronicling the GSE’s journey, Mr. Afedzie said it is the culmination of years of hard work and bears testimony to the quality of products and procedures available at the Accra bourse.
“This is another milestone chalked up by the Exchange following our formal affiliation in January 2020. Becoming a full member of the WFE is a testament of our commitment to adhering to the highest international standards and best practices which are embodied in the WFE,” he said of the umbrella-body.
The GSE’s position at the WFE will ensure wider benefits – including capitalising on the depth of research, networking and technology available at the Federation.
“We will have access to helpful materials; and if you want to mark yourself against the best, you will have to measure yourself against what they have. And you can only do that when you know what they have, then you can strive to measure where you are. It is an all-round package,” Deputy MD, Abena Amoah added – noting that it will not be one-way traffic as the GSE has much to teach its peers.
“There is a lot of interest in how we set up our fixed income market with friends from Morroco, Uganda and other markets who are all very eager to learn, so we also have things to teach them; the models that worked and things like that,” she explained.
Mr. Afedzie further explained that the development came after a series of rigorous assessments of the GSE’s application – as captured in its candidacy paper – as well as a comprehensive evaluation of factors such as the wider economy, the nation’s financial sector, capital market and operations of the stock exchange.
Other factors considered included the financial standing of GSE, ease of market access, listing admission, details about trading, risk assessment, AML/CTF, investigating abnormal trading and the economy, and the variety of listings.
The assessment process also saw a team from the Federation interact with key stakeholders from the Ministry of Finance, Securities and Exchange Commission (SEC), Bank of Ghana (BoG), Central Securities Depository (CSD) as well as some brokers and issuers.
In addition to its membership of the WFE, the GSE is also a member of the International Capital Markets Associations, and equally has running MoUs with various exchanges in order to achieve its goals.
Founded in 1961, the Federation has maintained its mandate of contributing to the development, support and promotion of organised and regulated securities markets in order to meet the needs of the world’s capital markets in the best interests of their users.
Currently, 37 percent of its members can be found across the Asia-Pacific region, 43 percent in Europe, Middle East and Africa, with 20 percent in the Americas.
Second Deputy Governor of the Bank of Ghana (BoG), Mrs Elsie Addo Awadzi, has called on Rural and Community Banks (RCBs) to leverage growing digital technology to maintain relevance within the financial services sector.
She said commercial banks were riding on digital technology and the government’s digitisation drive to increase appeal among rural and local communities.
The Deputy Governor, who was addressing the 21st Annual CEOs Conference of the ARB Apex Bank in Ho on Friday, said the reach and acceptance of digital technology should encourage the RCB sector to re-strategise.
“Digital technology is redefining the financial landscape. Commercial banks now can reach communities cost-effectively using technology.
“That divide between what belongs to the RCB sector and the commercial banks are gone. There is no boundary in the financial market, and it’s a wake-up call for the RCB sector,” she stated.
Mrs Awadzi said customers would be forced to rethink the use of rural banks as commercial banks continued to break ground in a space that was considered exclusively for RCBs.
She said RCBs must consider digital technology an “enormous growth area,” and leverage their strengths in penetrating local communities, in seeking to revise strategies to add value to the products and services to suit customers.
“Repositioning RCBs means it’s essential to take stock of the strengths and weaknesses of the industry. Customers are driving innovation. They are asking for ways of banking that are more suitable and deliverable to their taste.
Any financial institution that has not adopted digital transformation technology is clearly behind the curve. RCBs should endear to reorganize their business modalities to remain relevant,” the Deputy Governor added.
She said the Government and its stakeholders recognised the place of RCBs within the nation’s financial security structure, and that the Ministry of Finance and the BoG would continue to support the sector to grow along the digital transformation path.
Mrs Awadzi said the Government and the World Bank would work together to strengthen the Apex Bank to scale up and revive RCBs and help enhance technology exposure for the sector.
She urged the management of the sector to “keep in mind the compliments and the risks,” and said with “strong governance, and strong risk management systems,” the risks should be mitigated.
Mrs Awadzi said RCBs would have to augment their capital base to be able to implement the appropriate systems and strategies.
She noted that several RCBs were yet to implement the BOGs 2018 cyber security strategy and that CEOs must ensure their institutions took the line.
She further said the BoG’s sustainable banking principles launched in 2019 should be embraced by RCBs, which are expected to use their lending power to promote clean and more environmentally sustainable ways of doing business.
The three-day conference was on the theme: “Positioning Rural Banking at the Center of Financial Services Delivery in Ghana- the Role of Stakeholders”, and brought together top management of the Apex Bank, the Bank of Ghana and other related financial institutions.
Alex Kwasi Awuah, Managing Director of the ARB Apex Bank, said the rural financing gap, which formed the rationale behind the establishment of the rural banking system in Ghana by the BoG, had not been addressed 50 years on.
He said it was because the sector had not embraced the tools available.
“Digitisation and growth in financial technology solutions would help fully embrace the digital revolution by delivering the right products and services to bridge this yawning gap in the rural and community banking sub-sector,” Mr Awuah said.
The Managing Director said the ARB remained confident that with its agency and digital banking systems, the sector’s needs would be met.
He said CEOs remained the guarantors of the successes of the banks and should focus on saving banks from deterioration.
He called to price products and services to help draw customers closer and to tighten controls to prevent fraudulent practices that had been rampant in the sector.
Dr Toni Aubynn, Board Chairman of the Apex Bank, challenged RCBs to “use turbulent times to seek innovative thoughts and skills to bear in withstanding global whirlwinds and be able to emerge stronger.”
Second Deputy Governor of the Bank of Ghana (BoG), Mrs Elsie Addo Awadzi, has called on Rural and Community Banks (RCBs) to leverage growing digital technology to maintain relevance within the financial services sector.
She said commercial banks were riding on digital technology and the government’s digitisation drive to increase appeal among rural and local communities.
The Deputy Governor, who was addressing the 21st Annual CEOs Conference of the ARB Apex Bank in Ho on Friday, said the reach and acceptance of digital technology should encourage the RCB sector to re-strategise.
“Digital technology is redefining the financial landscape. Commercial banks now can reach communities cost-effectively using technology.
“That divide between what belongs to the RCB sector and the commercial banks are gone. There is no boundary in the financial market, and it’s a wake-up call for the RCB sector,” she stated.
Mrs Awadzi said customers would be forced to rethink the use of rural banks as commercial banks continued to break ground in a space that was considered exclusively for RCBs.
She said RCBs must consider digital technology an “enormous growth area,” and leverage their strengths in penetrating local communities, in seeking to revise strategies to add value to the products and services to suit customers.
“Repositioning RCBs means it’s essential to take stock of the strengths and weaknesses of the industry. Customers are driving innovation. They are asking for ways of banking that are more suitable and deliverable to their taste.
Any financial institution that has not adopted digital transformation technology is clearly behind the curve. RCBs should endear to reorganize their business modalities to remain relevant,” the Deputy Governor added.
She said the Government and its stakeholders recognised the place of RCBs within the nation’s financial security structure, and that the Ministry of Finance and the BoG would continue to support the sector to grow along the digital transformation path.
Mrs Awadzi said the Government and the World Bank would work together to strengthen the Apex Bank to scale up and revive RCBs and help enhance technology exposure for the sector.
She urged the management of the sector to “keep in mind the compliments and the risks,” and said with “strong governance, and strong risk management systems,” the risks should be mitigated.
Mrs Awadzi said RCBs would have to augment their capital base to be able to implement the appropriate systems and strategies.
She noted that several RCBs were yet to implement the BOGs 2018 cyber security strategy and that CEOs must ensure their institutions took the line.
She further said the BoG’s sustainable banking principles launched in 2019 should be embraced by RCBs, which are expected to use their lending power to promote clean and more environmentally sustainable ways of doing business.
The three-day conference was on the theme: “Positioning Rural Banking at the Center of Financial Services Delivery in Ghana- the Role of Stakeholders”, and brought together top management of the Apex Bank, the Bank of Ghana and other related financial institutions.
Alex Kwasi Awuah, Managing Director of the ARB Apex Bank, said the rural financing gap, which formed the rationale behind the establishment of the rural banking system in Ghana by the BoG, had not been addressed 50 years on.
He said it was because the sector had not embraced the tools available.
“Digitisation and growth in financial technology solutions would help fully embrace the digital revolution by delivering the right products and services to bridge this yawning gap in the rural and community banking sub-sector,” Mr Awuah said.
The Managing Director said the ARB remained confident that with its agency and digital banking systems, the sector’s needs would be met.
He said CEOs remained the guarantors of the successes of the banks and should focus on saving banks from deterioration.
He called to price products and services to help draw customers closer and to tighten controls to prevent fraudulent practices that had been rampant in the sector.
Dr Toni Aubynn, Board Chairman of the Apex Bank, challenged RCBs to “use turbulent times to seek innovative thoughts and skills to bear in withstanding global whirlwinds and be able to emerge stronger.”
Our forex bureau rates are provided by Afriswap Bureau De Change in Osu, Accra.
On the Interbank forex rates from the Bank of Ghana on, October 14, 2022, the Ghana Cedi is trading against the dollar at a buying price of 10.7061 and a selling price of 10.7169.
As compared to yesterday’s trading of a buying price of 9.7871 and a selling price of 9.7969. At a forex bureau in Accra, the dollar is being bought at a rate of 11.65 and sold at a rate of 11.85.
Against the Pound Sterling, the Cedi is trading at a buying price of 10.8373 and a selling price of 10.8501 as compared to yesterday’s trading of a buying price of 10.8373 and a selling price of 10.8501.
At a forex bureau in Accra, the pound sterling is being bought at a rate of 12.30 and sold at a rate of 12.80.
The Euro is trading at a buying price of 10.4653 and a selling price of 10.4767 as compared to yesterday’s trading of a buying price of 9.5005 and a selling price of 9.5109.
The South African Rand is trading at a buying price of 0.5854 and a selling price of 0.5859 compared to yesterday’s trading of a buying price of 0.5356 and a selling price of 0.5360.
At a forex bureau in Accra, South African Rand is being bought at a rate of 0.45 and sold at a rate of 0.80.
The Nigerian Naira is trading at a buying price of 41.0773 and a selling price of 41.1707 as compared to yesterday’s trading of a buying price of 44.9602 and a selling price of 45.0378.
At a forex bureau in Accra, Nigerian Naira is being bought at a rate of 13.00 Naira for every 1 Cedi and sold at a rate of 15.50.
She made the declaration when she pleaded with the media to use the correct terminology when covering events related to the cleaning up of the financial sector and the economy.
“It is important that the media leads the public discourse in a dispassionate and expert manner…We have heard too often, headlines such as ‘Bank of Ghana has collapsed companies’. Bank of Ghana never collapses anything. No. We license, we supervise, and then when an institution has failed, we take it out of the system in a manner that does not affect the system,” she said.
SSD/FNOQ
edia to use the right terminologies in their reports on the sector to send the right messages to the public.
Speaking at a media sensitization workshop organised by the BoG and associations representing Specialised Deposit-taking Institutions (SDIs), the 2nd Deputy BoG Governor said some headlines distort the salient point in an event within the sector.
“It is important that the media leads the public discourse in a dispassionate and expert manner…We have heard too often, headlines such as ‘Bank of Ghana has collapsed companies’. Bank of Ghana never collapses anything. No. We licence, we supervise and then when an institution has failed, we take it out of the system in a manner that does not affect the system.
“So do not say ‘Bank of Ghana has collapsed anything’. Bank of Ghana does not collapse anything. These institutions are run and governed by their shareholders, who put their Board of Directors and a team of management. So, they collapsed the companies. We don’t collapse the companies. It is important for the media to understand that,” she stressed.
The media sensitisation event brought together key players in the sector and presented a rare opportunity for the SDI associations to better explain their operations to the media.
It also enabled the media to ask appropriate questions of the key players in the sector and provide feedback to SDIs as to what the public thinks of their service.
Elsie Addo Awadzi said it is important that the media grows to become a key partner that understands the financial sector and the regulatory framework within which the financial sector operates.
“[The financial sector] is very different from other types of businesses and it is important that the media, when they engage in discussions related to the financial sector, they do so with an understanding of regulatory environment as well as the policy environment within which the financial sector operates,” she admonished.
It is almost clear that the Bank of Ghana‘s decision to increase its Monetary Policy Rate (MPR) by an additional 250 basis points (bps) will cause domestic growth performance to decline after the second half of the year.
According to Courage Boti, an economist and research lead at GCB Capital Limited, the Bank’s strict adherence to price stability, which has seen it raise the benchmark rate by a total of 1,100 basis points in 10 months, along with a concoction of other factors, are likely to restrain economic activity in the medium term.
Despite the better-than-expected real Gross Domestic Product (GDP) growth of 4.8 percent recorded in the second quarter of the year, the analyst expects discretionary spending to be muted, given the state’s constrained fiscal position.
“The latest round of confidence surveys shows a continuous softening of consumer and business confidence, owing to the heightened inflation and cedi depreciation pressures. With the extremely hawkish monetary policy stance, the domestic cost of credit is elevated, which may undermine new investments and potentially sustain the slowing growth momentum. Additionally, we envisage strict austerity measures under a possible IMF program, which could
depress economic activity in the medium term,” he said in a commentary following the central bank’s latest decision.
“The withdrawal of fiscal and monetary support shows signs of a weakening growth pulse in 2H22 despite the surprise 4.8 percent growth in real GDP in Q2 2022. We note that the real
growth in the Composite Index of Economic Activity (CIEA) has been depressed, returning a real growth rate of 0.5 percent in July 2022, sustaining the declining trend since peaking at 39.4 percent in April 2022,” he added.
Given the emerging risks to near-term growth, with the leading indicators of economic activity showing signs of distress in the second half of the year, the economist reiterated the wider expectation of analysts that BoG would have maintained the rate at 22 percent in an attempt to balance the risks to growth, considering the sharp rise in the cost of commercial credit.
“Given the renewed risks to inflation from continuous cedi depreciation and the utility tariff hike that took effect from September 2022, as well as the simmering imported inflationary pressures, the decision is not entirely surprising, even though we believe the MPC is overly aggressive,” Mr. Boti argued.
He, however, expressed belief that the action was taken, in part, to moderate the inflationary impact of the bank’s financing of the Treasury’s deficit.
“The underwhelming revenue performance, thus far, in 2022 has complicated fiscal policy implementation, with the elevated budget rigidities leaving no room for maneuver… The fiscal limitations, the heightened depreciation pressures and the resultant spate of credit risk downgrades underpinned the persistent uncovered auctions and portfolio reversals.
This limited the government’s financing options and resulted in a significant central bank deficit financing through the first nine months of 2022. While necessary to sustain government operations, the sizeable monetisation of the deficit breaches the regulatory threshold (5 percent of revenue in the preceding year) and partly underscores the relentless inflation run,” he explained.
Solomon Owusu, a member of the New Patriotic Party’s (NPP) media team, has lamented the high taxes, which he claims are progressively killing Ghanaian enterprises.
He claims that business owners are having trouble sleeping because their companies are fighting to survive and that too much taxation and the rising exchange rate are to blame.
His remark follows the closure of shops by merchants in the Kumasi Central Business District in protest of what they claim are onerous tax regulations that damage their companies.
The traders have vowed not to rescind their decision until the Government intervenes to address their concerns.
The traders have also been concerned with the strength of the cedi. The Ghana cedi has depreciated by 37.5% to the US dollar as of the end of September 2022 according to the Bank of Ghana.
Commenting on the development on Ghana Kasa show on Kasapa 102.5FM/Agoo TV Wednesday, Solomon Owusu who himself is a businessman urged the governent to step up its efforts at stabilizing the Cedis while reviewing aspects of the tax policy to address concerns of business persons.
“Taxes paid in this country are too much, and the exchange rate keeps increasing by the day and people are losing their capital. Businessmen and women are in great difficulty, where we find ourselves is very scary. No businessman is able to have a good sleep and because the policy rate increases, the loan repayment rate also increases. Business people are dying slowly, it is not funny, it’s very serious.”
“The country will see the effect of the action of the traders between December to February 2023. It takes some time before vessels arrive with imported items, so if we don’t encourage traders to import early, but import later, it will take about a month or two before the items will arrive in Ghana. So between that period when the items will arrive in Ghana, how are people going to survive,” he asked.
Our forex bureau rates are provided by Afriswap Bureau De Change in Osu, Accra.
On the Interbank forex rates from the Bank of Ghana on, October 13, 2022, the Ghana Cedi is trading against the dollar at a buying price of 9.7871 and a selling price of 9.7969.
As compared to yesterday’s trading of a buying price of 9.7176 and a selling price of 9.7274. At a forex bureau in Accra, the dollar is being bought at a rate of 11.25 and sold at a rate of 11.45.
Against the Pound Sterling, the Cedi is trading at a buying price of 10.8373 and a selling price of 10.8501 as compared to yesterday’s trading of a buying price of 10.7807 and a selling price of 10.7935.
At a forex bureau in Accra, the pound sterling is being bought at a rate of 12.00 and sold at a rate of 12.30.
The Euro is trading at a buying price of 9.5005 and a selling price of 9.5109 as compared to yesterday’s trading of a buying price of 9.4435 and a selling price of 9.4530.
The South African Rand is trading at a buying price of 0.5356 and a selling price of 0.5360 compared to yesterday’s trading of a buying price of 0.5372 and a selling price of 0.5374.
At a forex bureau in Accra, South African Rand is being bought at a rate of 0.45 and sold at a rate of 0.80.
The Nigerian Naira is trading at a buying price of 44.9602 and a selling price of 45.0378 as compared to yesterday’s trading of a buying price of 45.0656 and a selling price of 45.1827.
At a forex bureau in Accra, Nigerian Naira is being bought at a rate of 13.00 Naira for every 1 Cedi and sold at a rate of 15.50.
According to the Ghana Statistical Service, inflation (year-over-year) increased dramatically in the month of September, rising by 3.3% to 37.2%.
This is against the 33.9% reported in August 2022.
Food and non-alcoholic beverages were the main contributors to September 2022 inflation, according to the GSS.
The implementation of the utility tariff in September 2022 may also have influenced the surge in inflation.
Prior to the announcement of the September 2022 inflation, the Bank of Ghana adjusted upwards the policy rate to 24.5% to help fight inflation, though some analysts argue the increasing rate of inflation is largely supply driven.
Eastern region (47.1%) maintained its lead as the region with the highest inflation. It was followed by the Greater Accra and Ashanti regions.
The Upper West region recorded the least rate of inflation of (22.9%)
A five-member committee has been established by the government to coordinate discussions on managing Ghana’s debt with participants in the financial sector.
According to a statement released by the Ministry of Finance on Tuesday in Accra, the committee established by the Ministry of Finance and the Bank of Ghana (BoG) is chaired by Albert Essien, with Simon Dornoo serving as vice chair.
The action is a part of the government’s efforts to maintain control and confidence in its current negotiations with the International Monetary Fund (IMF).
The other members of the Committee are Mr Alex Asiedu, Ms Mabel Nyarkoa Porbley, and Peter Enti.
The statement noted, “The Committee will be consultative and will among other things lead discussions with the financial services industry and other stakeholders to provide industry-wide inputs and transmit industry concerns on debt management strategy to the MoF and BoG.”
The statement reiterated the Government’s commitment to protecting the domestic financial sector, noting that: “The stability of the domestic financial ecosystem is critical to a successful IMF-supported economic programme.”
“The government will take all necessary steps to protect the sector as we have done in the past,” the statement said.
It was noted that the government needed the support and trust of all Ghanaians to ensure that a historic arrangement was reached with the IMF.
“We are confident that such engagement and collaboration will enable us to recover very quickly and strongly from our current macroeconomic challenges,” the statement noted.
It was also stated that a similar engagement would be held with Ghana’s external bondholders.
Ghana is currently engaging with the IMF for a loan facility to support the implementation of its homegrown economic programme to ensure a stable and resilient macroeconomic environment, ensure debt sustainability and maintain social cohesion.
Our forex bureau rates are provided by Afriswap Bureau De Change in Osu, Accra.
On the Interbank forex rates from the Bank of Ghana on, October 12, 2022, the Ghana Cedi is trading against the dollar at a buying price of 9.7176 and a selling price of 9.7274.
As compared to yesterday’s trading of a buying price of 9.6427 and a selling price of 9.6523. At a forex bureau in Accra, the dollar is being bought at a rate of 11.03 and sold at a rate of 11.23.
Against the Pound Sterling, the Cedi is trading at a buying price of 10.7807 and a selling price of 10.7935 as compared to yesterday’s trading of a buying price of 10.6465 and a selling price of 10.6581.
At a forex bureau in Accra, the pound sterling is being bought at a rate of 11.98 and sold at a rate of 12.28.
The Euro is trading at a buying price of 9.4435 and a selling price of 9.4530 as compared to yesterday’s trading of a buying price of 9.3489 and a selling price of 9.3582.
At a forex bureau in Accra, Euro is being bought at a rate of 10.52 and sold at a rate of 10.77.
The South African Rand is trading at a buying price of 0.5372 and a selling price of 0.5374 compared to yesterday’s trading of a buying price of 0.5318 and a selling price of 0.5321.
The Nigerian Naira is trading at a buying price of 45.0656 and a selling price of 45.1827 as compared to yesterday’s trading of a buying price of 45.0656 and a selling price of 45.1827.
At a forex bureau in Accra, Nigerian Naira is being bought at a rate of 13.00 Naira for every 1 Cedi and sold at a rate of 15.50.
Jacob Rees-Mogg has declared his confidence in the governor of the Bank of England, but disputed that pension funds are at “systemic” risk.
Speaking to Sky News, the business secretary said “of course” he has confidence in Andrew Bailey, describing him as “respected”.
He questioned, however, whether there was a “systemic problem” with pensions after the Bank of England expanded its market intervention to help pension funds for the second time in two days on Tuesday by buying up index-linked gilts.
The Bank had warned of a “material risk to UK financial stability” with “fire sales” of assets if did not act.
The business secretary said that on the whole, pension funds “aren’t at risk”, but added: “Some pension funds have taken some high risk investments.”
He told Sky News that the “rightly independent” Bank of England intervened to protect these “risky investments.”
Yesterday, the Bank confirmed that its emergency support operation to protect pension funds would end this week.
Mr Rees-Mogg repeatedly refused to be drawn on whether the Bank was right to signal an end to its market intervention.
“I’m not going to criticise the Bank of England or the governor. It is not for me to speculate on what the Bank of England is doing,” he said.
The business secretary also insisted to Kay Burley that parts of the economy were in a “good state” as he admitted that after the economic turmoil of recent weeks his own mortgage payments have gone up.
“Mortgage rates have gone up for everyone who has a mortgage, and I have a mortgage,” he said.
“Any floating rate mortgages have gone up.”
Prior to his interview, new Office for National Statistics figures revealed that Britain’s economy fell by 0.3% between July and August, down from downwardly revised growth of 0.1% the previous month.
But Mr Rees-Mogg urged caution in interpreting them.
“The previous quarters figure showed a contraction, was then revised to show economic growth. So, be very careful about how you interpret figures immediately after they’re released,” he told Sky News.
“It’s a small amount of a very large economy, but these figures are notorious for being revised afterwards.”
The business secretary also refused to indicate his own view on whether benefits should rise in line with inflation amid an internal Conservative Party row over the issue.
“We haven’t yet had the inflation figure on which benefits will be set. So, that is something that will be decided once the figure is available,” he said.
“Most predictions, most economic forecasts, turn out to be inaccurate rather than spot on. So, one has got to be careful about forecasts.”
Mr Rees-Mogg continued: “There is a process for making this decision. This decision will be made once the figures come out.
“The statutory instrument has to be laid in November to put through the increase. That will be done in the normal way. This is completely routine governmental decision-making.”
In the commons on Tuesday former cabinet minister Julian Smith warned Mr Kwarteng that the government must not balance tax cuts “on the back of the poorest people in our country”.
The government has already been forced to abandon plans to scrap the top 45p rate of tax in the face of a threatened revolt.
Prime Minister Liz Truss will face MPs in the commons on Wednesday for the first time since Chancellor Kwasi Kwarteng’s £43 billion tax-cutting mini-budget caused economic turmoil.
On Tuesday, the International Monetary Fund (IMF) warned Mr Kwarteng’s package of unfunded tax cuts was making it harder for the Bank to get soaring inflation rates under control.
While the Institute for Fiscal Studies has warned the chancellor he will have to find £60 billion in public spending cuts if he persists with his tax plans.
Kojo Oppong Nkrumah, the information minister, asked Ghanaians to start selling their dollars around two months ago because the depreciation of the cedi will be dealt with.
He claims that the nation was anticipating around 2 billion dollars, which will likely support the cedi.
The lending facility was composed of a $750 million loan from Afreximbank and a $1.3 billion loan from Cocoa Syndicated.
Since the start of this year, the Ghana cedi has suffered persistent depreciation against major trading currencies, especially the US dollar.
As of July, this year, the cedi lost its value by more than 20 percent. The local currency is now trading above GH¢10.00 to one US dollar on the exchange rate market.
But the minister allaying the fears of citizens revealed that while 750 million dollars is expected from the Afremix Bank this week, the cocoa syndicated loan will add $1.3 billion. These monies, he said, are expected to hit the Bank of Ghana’s account.
“The Bank of Ghana introduced a number of measures in the short term to deal with it and on the back of that… the $750 million that we were expecting, all the paperwork has been concluded, and it should be hitting our accounts today or tomorrow,” he said.
“If I were you, and I was holding onto dollars, I would be selling them by now because there is a lot more dollar coming in from the $750 million and also from the Cocoa Syndicated Loan of about $1.3 billion,” the minister added.
A recent currency performance ranking by Bloomberg showed that the cedi was classified as the worst performing currency in the world after Sri Lanka’s Rupee.
The Bank of Ghana has assured that it is implementing measures including increasing foreign currency (FX) supplies to banks in the short term to help meet growing FX demands for external payments.
The event, according to a Joy Business report, follows the Bank of Ghana’s recent announcement of a 250 basis point increase in the monetary policy rate to 24.5 percent.
The portal said that emails have since been sent to relationship managers and officers of these banks instructing them to halt lending to new clients, albeit it did not disclose any other information on these banks.
It explained that the move seeks to reduce risk exposure in advancing loans to new customers.
Other factors which are likely to impact this decision can be attributed to non-performing loans of banks, and soaring interest rates which have forced some financial intermediaries to suspend or slow down lending especially to new customers.
Although demand for loans continue to surge due to the current economic conditions in the country, supply of loanable funds remain virtually low as Ghana is seeking to access an IMF-supported programme in 2023 once an agreement is reached.
Meanwhile, existing and credit-worthy customers of these banks are expected to continue to receive loans but at a much higher rate due to the recent policy rate hike.
Ranking Member on Parliament’s Trades Committee, Murtala Mohammed, says the Bank of Ghana (BoG) cannot be blamed for the harsh economic situation the country is plagued with.
According to him, the Akufo-Addo administration must be blamed for the current crisis.
He explained that even though some policy measures by the Bank of Ghana have heightened an already dire situation, it should not be forgotten that the Central Bank is not entirely independent of the Executive arm of government, thus the current administration has a hand in decisions taken there.
Speaking on JoyNews’ PM Express, he said “I’ve listened to my good friends there and they all seem to be blaming the Bank of Ghana, it is the government who should be blamed; the President, the Vice President and the Minister for Finance for abysmally, disastrously managing this economy. They are those who should be blamed.
“So I’m not surprised that they’re saying that when they go to the Bank of Ghana, the Bank of Ghana blames the Ministry of Finance; they go to the Ministry of Finance, the Ministry of Finance blames the Bank of Ghana. It will be the height of naivety to assume that the Bank of Ghana is absolutely independent of the executive. All the economic policy decisions for which reason we’re in the mess for which we are is occasioned by the policies of this government.”
He was reacting to comments by the Ghana Union of Traders’ Association President, Dr. Jospeh Obeng, who had blamed the Bank of Ghana for failing to find a viable solution to the worsening inflation situation.
According to him, the Bank of Ghana’s resort to hike monetary policies has merely served banks and not the general public who have instead been hit hard.
He added that the monetary policy hikes have rather contributed to the inflation situation rather than reduced it.
However, Murtala Mohammed believes, the policy decisions of the government is what is to be blamed.
He noted that the government has failed to control the country’s penchant for relying on importation of goods, some of which could be produced in large quantities locally.
He said the failure of the government to enforce the strict importation restrictions that the erstwhile Mahama administrationhad left behind has driven imports at an all-time high and thus putting even more pressure on the cedi.
“We are spending over 2billion dollars annually importing [rice and poultry products] into this country. Just in 2016 we were spending about 500million dollars importing same. So if you’re spending over 2billion dollars on the importation of rice and poultry products within a year, what it simply means is that every year you need to look around to get the over 2billion dollars to import those products into your country.
“You don’t buy them with cedis. Now if you’re taking 2 billion dollars every year, it certainly will exert pressure on your domestic currency and that is the problem. Look why is it that in 2014 we were able to reduce the importation of rice into this country by 40% and there was a surge in production of local rice by 60%? It was as a result of a visionary policy decision.
“So we at the Ministry of Trade, the GUTA people know, recently I heard them lamenting over decisions taken by this government in which they were not involved. He knows that when we were in government, I was the Deputy Minister for Trade, we had an open-door policy for them. And they could call me …as late as 1am and we’ll talk.
“There was no single policy decision we took at the Ministry of Trade that involved trade that we didn’t involve them, not even a single one. But policy decisions have been taken, formulated without them. Why are we not where we are?” he said.
He has thus suggested that the government revisits some of its policy interventions to stall the further depreciation of the cedi.
Some Ghanaians were unaware that the Ghana Cedi had now reached the GH11 mark to the US$1 mark when they awoke on Monday, October 10, 2022, to read the news or conduct business.
The unexpected turn of events occurs at a time when practically all economic indices in Ghana are ringing alarm bells, prompting Ghana to request financial assistance from the International Monetary Fund.
The sustained depreciation of the cedi versus the US dollar has left the typical Ghanaian struggling to make ends meet while others appear to be in a panicked state due to the country’s ‘falling’ economy.
In plain terms, the cedi’s performance has culminated in rising inflation figures, huge debt costs, credit rating downgrades, policy rate hikes, increasing cost of living, and a general atmosphere of frustration among the average Ghanaian.
This has placed the cedi in a perilous position after it has been ranked as the second worst-performing currency among 150 currencies in the world, according to Bloomberg.
GhanaWeb Business in this article takes a look at the trend of the cedi’s performance against the US Dollar.
Why the cedi is on a free fall
At the beginning of January 2022, the cedi was trading at a rate of GH¢5.9 to the US dollar, according to data from the Bank of Ghana.
But it shortly depreciated to GH¢6.02 at the inter-bank level, indicating a depreciation of nearly 12 percent – a signal which sparked the current performance of the cedi.
The government, in presenting its 2022 budget, had hoped to pass a number of key policies to boost the country’s domestic revenue but that hit a snag as debate over the passage of the E-Levy rocked parliament.
This then sent wrong signals to investors in both domestic and international markets.
Also, demand for forex had overtaken supplies during a period when high debts and low investor confidence made it impossible for Ghana to access the international capital market for borrowing.
Cedi breaks the 8 in March 2022
In March 2022, the Ghana Cedi continued its free fall against the US dollar, crossing the GH¢8 mark and selling at GH¢8.12 as of the 15th of the month.
The local currency at the time was trading against the dollar at a buying price of GH¢7.94, while the British pound was selling at GH¢10.17 and buying at GH¢10.17.
The currency however still went on a free fall despite witnessing some marginal appreciation.
Cedi hits the 10 mark in September
Although the government began to adopt certain measures in hopes of containing the cedi’s depreciation, the local currency’s woes continued as it reached the GH¢10 to $1 mark in September.
This signaled more concerns over the government’s ability to fully address the development, despite adopting a Special Foreign exchange auction for bulk distribution companies and a Gold Purchase Programme.
As of Monday, September 5, 2022, some forex bureaus in Accra were selling $1 for GH¢10.12 and buying it at GH¢9.90.
And as of September 27, the Minister of Finance, Ken Ofori-Atta, said the cedi had lost its value by about 31.7 percent to the US dollar.
The local currency was selling at around GH¢10.50 to the US dollar on the retail market and forex bureaus.
Cedi reaches unprecedented GH¢11 mark in October
Despite the assurance from the government that measures were being adopted to address the cedi’s performance, the dollar hit the unprecedented GH¢11 to $1 mark at some forex bureaus in the country.
As of October 8, 2022, checks by GhanaWeb Business showed that the cedi was selling at GH¢11.2 to $1 dollar. This has now renewed further concerns over the demand and supply of US dollars which now seems to be scarce in circulation.
While Ghana waits to access an IMF-supported programme in 2023 amid ongoing negotations, recent downgrades of the country’s creditworthiness by international rating agencies: Moody’s, Fitch, Standard and Poors’, all paint a rather gloomy picture of the economy.
The Central Bank on October 7 announced a further hike in the monetary policy rate by 250 basis points to 24.5 percent from an earlier 22 percent to stem inflation pressures.
But the Governor of the Bank, Dr. Ernest Addison, is convinced that the outlook of the Ghana cedi will improve, aided by the recent disbursement of a $750 million loan facility from Afreximbank.
He added that the signing of the $1.13 billion COCOBOD syndicated loan and an agreement with gold and oil firms to purchase repatriated foreign exchange earnings will help stabilize the exchange rate.
Despite the challenging macroeconomic problems the nation was facing, the banking sector’s performance remained solid.
In a statement released by the Bank of Ghana (BoG) following the 108th regular meeting of the Monetary Policy Committee of the BoG, Governor Dr. Ernest Addison said that total assets increased by 22.9% on an annual basis to GH204.6 billion in August 2022 due to sustained growth in deposits, up from a 16.7% annual growth the year before.
According to him, total deposits climbed by 22.5% to GH136.7 billion, compared to a growth rate of 21.8% in August 2021.
“The key Financial Soundness Indicators (FSIs) of the banking industry have remained positive in the year, with Capital Adequacy Ratio at 18.1 per cent, well above the regulatory minimum of 13.0 per cent. The sector was also liquid, reflected by an increase in the core liquid assets to short-term liabilities to 31.1 per cent in August 2022 from 24.7 per cent in the previous year,” he said.
He said the asset quality also improved as the non-performing loans ratio declined to 14.3 per cent at end of August 2022, from 17.3 per cent in August 2021, reflecting partly, the higher level of outstanding loans.
The governor said profit before tax for banks stood at GH¢6.1 billion in August 2022, representing an annual growth of 25.2 per cent, compared to 27.4 per cent in the previous year.
He said the net interest income of baking sector grew by 17.3 per cent, compared to 17.9 per cent, adding that Net fees and commissions also increased by 26.9 per cent to GH¢2.3 billion, compared with 21.8 per cent growth in the previous year, reflecting the rebound in credit growth as well as an increase in trade finance-related business.
“Other income of banks grew by 85.6 per cent to GH¢2.0 billion, compared with a contraction of 5.4 percent a year ago. These developments resulted in a 25.5 percent growth in operating income to GH¢14.2 billion, relative to a growth of 15.7 percent in the previous year,” Dr Addison, said.
He indicated that operating expenses increased sharply by 24.3 per cent in August 2022, compared to 9.0 per cent growth in August 2021, partly reflecting the impact of inflation on banks’ operations.
In a related development, Dr Addison said the results from the bank’s August 2022 confidence surveys showed further softening of Business and Consumer sentiments.
“The latest Bank of Ghana high frequency indicators signaled some moderation in economic activity. The Composite Index of Economic Activity (CIEA) recorded an annual growth of 0.5 per cent in July 2022, compared to 1.6 per cent in June 2022, and 5.0 per cent in December 2021. The sources of the slowdown were from construction and port activities,” Dr Addison, said.
He indicated that consumer confidence also dipped on account of rising inflation, business sentiments softened on the back of concerns about price pressures, currency depreciation, and weakening consumer demand.
According to the Ghana Revenue Authority (GRA), GH328.80M in revenue had been produced as of September 2022 since the Electronic Transfer Levy’s implementation began.
The GRA clarified that it is important to note that they continue to see a 20% improvement in the collection of the levy month over month.
We consequently anticipate that domestic revenue generation will continue and improve in order to sustain governmental spending, according to the GRA.
Meanwhile, data from the Bank of Ghana has revealed that the total Mobile Money transactions as of August 2022 compared to the same period in 2021 fell by ¢13.3 billion, about.
The figure represents 2.02% the latest Summary of Financial and Economic Data by the Bank of Ghana has revealed.
Per the data, transactions went up from ¢71.4 billion in May 2022 to ¢77.4 billion in June 2022, but remain relatively the same at ¢77.2 billion in July 2022.
It however shot up significantly by ¢9.9 billion to ¢87.1 billion in August 2022.
In May 2021, June 2021, July 2021, and August 2021, Mobile Money transactions were estimated at ¢86.5 billion, ¢89.1 billion, ¢99.1 billion, and ¢81.8 billion respectively.
Following the release of a devastating assessment on the economy by the World Bank, the Governor of the Bank of Ghana, Dr. Ernest Addison, has thrown his support behind discussions calling for setting a borrowing ceiling. He is deeply concerned about the public debt of the country.
Ghana’s public debt is expected to reach 104.6 percent of GDP by the end of the year, automatically placing the economy in the category of debt-distressed economies and further making the debt situation unsustainable, meaning the country will no longer be able to fulfill its debt obligations, even domestically, according to the World Bank’s Africa’s Pulse report (October 2022, Volume 26).
It is against this background that Dr. Addison says he supports discussions on capping borrowing to ascertain the country’s readiness for such a policy.
“I think this is something that could be looked at. If you look at the European Union, they had a criteria which had a debt-ceiling. And in our own convergence discussions with the West African common currency, we were discussing a debt-ceiling, so it is not unusual to set caps for attaining certain objectives. If Ghanaians think we have reached a point where we can cap debt, the debate can be had and we will look at the pros and cons of that type of decision,” he said during an interaction with the press in Accra last Thursday.
“We are inclined to suggest that parliament considers introducing a borrowing or debt-ceiling in the annual Appropriations bill. This will be in addition to the existing expenditure ceiling that is imposed by parliament for every budget – which more often than not is breached with impunity.
“If government wants to borrow beyond the initial borrowing – or debt-ceiling, it will have to come back to parliament for approval as prevails in the US. This suggestion is to rein-in the debt, which otherwise risks ballooning and overwhelming the budget in the form of escalating interest payments,” the IEA stated when providing inputs for the 2022 budget.
The World Bank’s report
According to the Africa’s Pulse report, debt is expected to jump to 104.6 percent of GDP in Ghana from 76.6 a year earlier – amid a widened government deficit, massive weakening of the cedi and rising debt service costs. It further said the country’s debt is expected to remain elevated at 99.7 and 101.8 percent of GDP in 2023 and 2024 respectively.
The mounting debt situation – with no concrete revenue measures in place to pay back, coupled with a weakening currency – has raised further red flags from investors, leading to loss of access to the international market.
Currently, the country’s local and foreign currency ratings have been downgraded from B-/B to CCC+/C with negative outlook from S&P rating agency, and ‘CCC’ to ‘CC’ by Fitch.
The country is now seeking a US$1.5billion assistance from the International Monetary Fund (IMF) to shore-up public finances and regain access to credit markets.
The World Bank is however warning that the situation could get worse, especially with no access to the international bond market.
“Debt levels and/or vulnerabilities remain high in the region, with no sign of significant improvement. The fiscal consolidation process adopted by many countries following the pandemic crisis was postponed or at best softened. This suggests that countries have little scope to manoeuvre, given that they do not have any fiscal space.
“The situation could worsen, especially for countries which lost access to the credit market and are in, or at risk of, debt distress. The international community needs to find more adequate ways to resolve the issue of debt restructuring.
“The current resolution mechanisms are proving to be inadequate for effectively addressing a potential debt crisis, and additional instruments may need to be set in motion. If not addressed, debt dynamics could escalate into a full-blown crisis… setting countries even further back,” the report stated.
As compared to Friday’s trading of a buying price of 9.6302 and a selling price of 9.6398. At a forex bureau in Accra, the dollar is being bought at a rate of 10.82 and sold at a rate of 11.00.
Against the Pound Sterling, the Cedi is trading at a buying price of 10.6971 and a selling price of 10.7097 as compared to Friday’s trading of a buying price of 10.7742 and a selling price of 10.7860.
At a forex bureau in Accra, the pound sterling is being bought at a rate of 11.95 and sold at a rate of 12.25.
The Euro is trading at a buying price of 9.4148 and a selling price of 9.4251 as compared to Friday’s trading of a buying price of 9.4677 and a selling price of 9.4772.
At a forex bureau in Accra, Euro is being bought at a rate of 10.45 and sold at a rate of 10.72.
The South African Rand is trading at a buying price of 0.5326 and a selling price of 0.5329 compared to Friday’s trading of a buying price of 0.5380 and a selling price of 0.5387.
At a forex bureau in Accra, South African Rand is being bought at a rate of 0.45 and sold at a rate of 0.80.
The Nigerian Naira is trading at a buying price of 45.2047 and a selling price of 45.2296 as compared to Friday’s trading of a buying price of 45.2257 and a selling price of 45.2382.
At a forex bureau in Accra, Nigerian Naira is being bought at a rate of 13.00 Naira for every 1 Cedi and sold at a rate of 15.50.
The October 2022 Bank of Ghana (BoG) Summary of Economic and Financial Data has revealed that Ghana’s public debt stock went from ¢9 billion ¢402.4 billion as of July 2022.
This, according to the central bank, is equivalent to 68% of the Gross Domestic Product and is in sharp contrast to the projected 104.6% of debt to GDP ratio in 2022 by the World Bank.
In dollar terms, the country’s debt dropped marginally to $53.2 billion in July 2022, from $54.4 billion in June 2022.
Based on the data, the nation did not borrow fresh funds from the international market during the period. However, the debt level will go up going forward, following the $750 million Afrieximbank loan that came in August 2022.
According to the data, the external debt remained largely unchanged at $28 billion, equivalent to 35.8% of GDP.
The domestic debt however has been going up since January 2022 because of the significant borrowing by the government in the domestic financial market.
The domestic debt stood at ¢190.3 billion in July 2022, from ¢190.1 billion in June 2022.
Data available shows that the domestic debt began the year at ¢181.9 billion in January 2022 and then went up to ¢185.4 billion in February 2022 and ¢190.1 billion in March 2022. It subsequently shot up to ¢189.2 in April 2022 and ¢188.5 billion in May 2022.
On the other hand, the financial sector resolution bond fell by ¢100 million to ¢14.4 billion in July 2022. This is equivalent to 2.4% of GDP.
The total public debt stock of the country dropped to ¢388.1 billion in April 2022, from ¢392.1 billion in March 2022. It later went up marginally to ¢389.2 billion in May 2022 and subsequently to ¢393.4 billion in June 2022.
Meanwhile, the World Bank in its latest Africa Pulse Report classified Ghana as a high debt distress country as it projects the nation’s debt to Gross Domestic Product (GDP) of 104.6% by the end of 2022.
According to the report, debt is expected to jump significantly, from 76.6% a year earlier, amid a widened government deficit, massive weakening of the cedi, and rising debt service costs.
A senior lecturer at the University of Ghana, Professor Godfred Alufar Bokpin, has stated that even though the Bank of Ghana’s efforts to address the rising inflation rates by increasing the monetary policy, the timing for its recent hike is wrong.
The Bank of Ghana increased the monetary policy rate by 250 basis points to 24.5% on October 6, 2022.
Prof. Bokpin explained that what the Bank of Ghana currently lacks is the right positioning of the policy rate to effectively deal with the current economic crisis.
“We have said that where we are, the triggers are much more from the fiscal side and therefore there is a limit to how far you can deploy monetary policy largely of course to eliminate the demand-related inflationary pressures but where I disagree with the Bank of Ghana is the timing of their policy rate adjustment that seems to lack in terms of positioning it to anchor inflationary expectation, I think we missed it,” he is quoted by myjoyonline.com.
Ghana’s current inflation currently stands at 33.9% as of August 2022, the highest it has been in 21 years.
However, the economist identified that Ghana’s problem has to do largely with the fiscal side of the economy.
Therefore, the Bank of Ghana should not be blamed entirely.
“We may be missing the point if we blame the Bank of Ghana so much and leave out the big elephant in the room which is the fiscal side where the political economy is dominant and where politicians and managers of the fiscal side are to be blamed for the current mess that we are in.
“If you look at Bank of Ghana’s statement for the past year, you will see a certain posture of Bank of Ghana that suggests that they are unhappy with the way the fiscal side is being managed,” he explained.
On the Interbank forex rates from the Bank of Ghana on, October 7, 2022, the Ghana Cedi is trading against the dollar at a buying price of 9.6302 and a selling price of 9.6398.
As compared to Thursday’s trading of a buying price of 9.6302 and a selling price of 9.6398. At a forex bureau in Accra, the dollar is being bought at a rate of 10.82 and sold at a rate of 11.00.
Against the Pound Sterling, the Cedi is trading at a buying price of 10.7742 and a selling price of 10.7860 as compared to Thursday’s trading of a buying price of 10.8513 and a selling price of 10.8641.
At a forex bureau in Accra, the pound sterling is being bought at a rate of 11.95 and sold at a rate of 12.25.
The Euro is trading at a buying price of 9.4677 and a selling price of 9.4772 as compared to Thursday’s trading of a buying price of 9.4978 and a selling price of 9.5082.
At a forex bureau in Accra, Euro is being bought at a rate of 10.45 and sold at a rate of 10.72.
The South African Rand is trading at a buying price of 0.5380 and a selling price of 0.5387 compared to yesterday’s trading of a buying price of 0.5401 and a selling price of 0.5404.
At a forex bureau in Accra, South African Rand is being bought at a rate of 0.45 and sold at a rate of 0.80.
The Nigerian Naira is trading at a buying price of 45.2257 and a selling price of 45.2382 as compared to yesterday’s trading of a buying price of 45.2776 and a selling price of 45.3679.
At a forex bureau in Accra, Nigerian Naira is being bought at a rate of 13.00 Naira for every 1 Cedi and sold at a rate of 15.50.
The Bank of Ghanahas engaged players in the financial space to address possible threats to the sector in order to achieve a sound and safe financial system.
To this end, the Central Bank, says it is committed in ensuring that its financial inclusion agenda is achieved in no time.
Speaking at the maiden edition of the Regulatory Sandbox Engagement Forum held in Accra on Wednesday, on behalf of the first Deputy Governorof the Bank of Ghana, Dr Maxwell Opoku Afari, Head of FinTech and Innovation Office, Kwame Oppong, underscored the importance of such engagements with financial sector players.
He said digital financial services was promoting financial inclusion and bring the unserved and underserved segment of the society in the financial system.
“Ghana’s recent remarkable performance in financial inclusion from 58 per cent in 2017 to 68 per cent in 2021 as reported in the 2021 Global Findex has been largely facilitated by digital financial service,” he said.
The forum, sought to elicit the views of the players in the aforementioned sector in the implementation of the BoG Regulatory Sandbox.
BoG recently introducedthe Regulatory Sandbox to create an enabling environment for innovators to test innovative financial products, services and business models in a controlled but live environment under the supervision of the Bank.
Dr Afari said the emergence of new technology had fuelled the digitalisation drive in the Ghanaian financial services industry with tremendous impact on efficiency and convenience.
He said to meet the changing needs of customers as well as address the challenges of the industry called for pragmatic and innovative solutions that confront the status quo.
“I must state that innovation and retooling of regulatory framework are not new to the Bank of Ghana. In fact, the bank has been at the forefront of innovation in the financial service industry for decades,” the First Deputy Governor, stated.
Dr Afari said the passage of the Payment Systems Act 2003(Act 662) in 2003, which had culminated in the establishment of the Ghana Inter-bank Payment and Settlement System infrastructure and the promotion of electronic payments laid a strong foundation for digital financial service in Ghana.
“Since then, many more innovations and corresponding enabling regulatory regime have been provided, of which Act 987 is the most recent. Clearly, these and many commitments, including the regulatory sandbox are evidence of the Bank’s response to the prevailing industry dynamics and encourage stakeholders to take advantage of the opportunities Bank of Ghana has presented to inject some dynamism into their offerings through innovation,” he said.
He said the adoption of responsible innovation presented Fintechs opportunity to attract investments to expand and finance their business operations.
The First Deputy Governor stressed that the stakeholders’ engagement forum presented an opportunity to have an ongoing collaboration with industry to explore different perspectives and to work towards a common goal.
Dr Afari pledged that as a regulator of financial service, BoG maintained the highest level of confidentiality and secrecy, and would not expose the ideas of the Fintechs participating in the bank’s Regulatory Sandbox, to third parties.
The representatives of the Ghana Chamber of Telecommunications, Technology Chamber, Ghana Microfinance Institutions Network, Ghana Association of Savings and Loans Companies, in their remarks commended BoG for the implementation of the Regulatory Sandbox to nurture new ideas.
They also lauded the BoG for the forum to engage the players in the banking, fiancé and Fintech sectors to discuss ideas on how to move the sector forward.
The Central Bank decided to raise the Monetary Policy Rate by 250 basis points to 24.5%, the highest level since 2017.
The country’s soaring inflation, which is currently 33.9%, is to blame for the increase, according to the Bank of Ghana.
Dr. Daniel Amarteye Anim, who is also the executive director of the Policy Initiative for Economic Development, said in an interview with Starr News that new enterprises won’t be given money to increase their output.
“Certainly, what it means is that the cost of borrowing, the cost of capital will increase, and as capital increases, startups or young businesses will not be in a better position. Because it will not make economic sense for you to go and borrow at a very high rate when money that comes to the business will not be able to pay for that particular facility. So, a lot of people will be denied capital and as they are denied, they will not be in a better position to expand production.”
He added: “As production declines, jobs will not be created, it will even affect revenue and the government will not get its share of revenue in terms of taxation. So, these are the implications of this particular policy in terms of consistently increasing policy rate and its implication on businesses. I believe that it is not the way to go and that we should find a better approach to ensuring that we minimize the cost of living in the country in terms of increases in the price of goods and services.”
The Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) has increased the monetary policy rate by 250 basis points from 22 per cent to 24.5 per cent.
The Committee cited heightened economic and policy uncertainties, inflationary pressures, and weakening of the Cedi against the US Dollar as among the reasons for the increment.
“Inflation remains elevated, and the balance of risks is on the upside. Although the forecasts are for monthly inflation to continue to slow down, the risks are on the upside, emanating largely from pass-through effects of the currency depreciation, the recent upward adjustment in utility tariffs, and rising inflation expectations,” the BoG said in a statement.
The BoG said the current condition is “sub-optimal” and will be interim until agreements were reached on an IMF-supported programme.
“The Committee assesses that the engagement with IMF has been positive and early conclusion of the programme discussions will help re-anchor stability,” it said.
On the fiscal situation, the BoG said while expenditures had been broadly on target, revenue performance had been below expectations, complicating fiscal policy implementation.
It said financing of the budget so far had predominantly been from the banking sector with the central bank absorbing a larger share.
BOG noted that outlook for the Ghana Cedi had improved following the recent disbursement of the loan from Afreximbank of US$750 million, the signing of the syndicated Cocoa Loan of US$1.13 billion, and the agreement with gold and oil companies to purchase the repatriated foreign exchange earnings of about US$83.9 million.
“The Committee remains committed to re-anchoring inflation expectations and returning to a disinflation path,” the statement read.
Reacting to the announcement, Mr Courage Boti, Lead Economist at GCB Bank Capital said the decision was a bit of a surprise especially when the Month-on-month inflation margin had reduced, suggesting an ease on the slope of inflation curve.
He added that “Petroleum price, has been stable for a while even though exchange rate keeps driving the ex-pump prices in Ghana higher.”
He indicated that the main motivation for the increase could be the BOG’s own action of alluding to monetising deficit as government had lost access to the capital market both domestically and externally.
“The recent talk about debt restructuring means that the local market has not come around for a while. There were Bond maturity with uncovered auctions which the Bank must cover and of course over the years they have done that to help government. That is inflationary, and they admit it is sub optimal.
“They would have to keep mopping up the liquidity to balance the situation and curtail inflation,” he said.
As of July 2022, Ghana’s public debt totaled GH 402.4 billion, or 68% of the nation’s GDP.
From GH392.1 billion in March 2022 to GH388.1 billion in April 2022, GH389.2 billion in May 2022, and GH393.4 billion in June 2022, the debt stock only slightly increased.
The Bank of Ghana’s October 2022 Summary of Economic and Financial Data included this information.
The data showed that Ghana did not borrow fresh funds from the global market in recent times.
The external debt remained unchanged at $28 billion, equivalent to 35.8% of GDP.
However, the domestic debt increased from GH¢190.1 billion in June 2022 to GH¢190.3 billion in July 2022.
The domestic debt stood at GH¢181.9 billion in January 2022, went up to GH¢185.4 billion in February 2022, and GH¢190.1 billion in March 2022. It subsequently shot up to GH¢189.2 in April 2022 and GH¢188.5 billion in May 2022.
The debt stock, which was 392.1 billion in March 2022, fell to 388.1 billion in April 2022 before slightly increasing to 389.2 billion in May 2022 and 393.4 billion in June 2022.
The country’s debt, however, decreased somewhat in dollar terms from $54.4 billion in June 2022 to $53.2 billion in July 2022, according to the Central Bank.
The Bank of Ghana’s October 2022 Summary of Economic and Financial Data included this information.
The data showed that Ghana did not borrow fresh funds from the global market in recent times.
However, the domestic debt increased from ¢190.1 billion in June 2022 to ¢190.3 billion in July 2022.
The domestic debt stood at ¢181.9 billion in January 2022, went up to ¢185.4 billion in February 2022, and ¢190.1 billion in March 2022. It subsequently shot up to ¢189.2 in April 2022 and ¢188.5 billion in May 2022.
In August 2022, Ghana reported a trade surplus of $1.7 billion. Compared to August 2021, when US$892.4 million was reported, this is an increase.At a press conference on October 6, 2022, the Bank of Ghana made this information public.
The increase, according to Dr. Ernest Addison, Governor of the Bank of Ghana, was brought about by “greater receipts from gold, crude oil, and non-traditional exports, notwithstanding rising need for oil and gas imports.”
Additionally, he mentioned that the nation’s total exports increased by $3.8 billion.
“Total exports went up by 19.5 percent year-on-year to US$11.8 billion. Crude oil exports totalled U$3.8 billion, 56.5 percent higher than observed in 2021, mainly due to price effects.
Gold export earnings also went up by 23.9 percent to US$4.2 billion, supported by increased production volumes triggered by the positive response from small-scale gold exporters to the downward revision of the withholding tax regime from 3 percent to 1.5 percent.
Despite these increases, cocoa receipts declined by 22.8% to hit US$1.7billion.
“However, on account of lower prices and low cocoa purchases, cocoa receipts declined by 22.8 percent to US$1.7 billion from US$2.1 billion.
Total merchandise imports grew by 12.9 percent on a year-on-year basis to US$10.2 billion, mainly driven by a higher oil and gas import bill of US$3.1 billion at the end-August 2022, relative to US$1.7 billion in the same period of 2021. Non-oil imports, however, dipped by 3.8 percent year-on-year to US$7.1 billion in the review period,” he added.
Our forex bureau rates are provided by Afriswap Bureau De Change in Osu, Accra.
On the Interbank forex rates from the Bank of Ghana today, October 7, 2022, the Ghana Cedi is trading against the dollar at a buying price of 9.6302 and a selling price of 9.6398.
As compared to yesterday’s trading of a buying price of 9.6302 and a selling price of 9.6398. At a forex bureau in Accra, the dollar is being bought at a rate of 10.75 and sold at a rate of 10.98.
Against the Pound Sterling, the Cedi is trading at a buying price of 10.7742 and a selling price of 10.7860 as compared to yesterday’s trading of a buying price of 10.8513 and a selling price of 10.8641.
The Euro is trading at a buying price of 9.4677 and a selling price of 9.4772 as compared to yesterday’s trading of a buying price of 9.4978 and a selling price of 9.5082.
At a forex bureau in Accra, Euro is being bought at a rate of 10.40 and sold at a rate of 10.67.
The South African Rand is trading at a buying price of 0.5380 and a selling price of 0.5387 compared to yesterday’s trading of a buying price of 0.5401 and a selling price of 0.5404.
At a forex bureau in Accra, South African Rand is being bought at a rate of 0.45 and sold at a rate of 0.80.
Ghana recorded a trade surplus of US$1.7 billion in August 2022. This is an increase from the US$892.4 million recorded in August 2021.
This was revealed by the Bank of Ghana at a press briefing on October 6, 2022.
According to the Governor of the Bank of Ghana, Dr. Ernest Addison, the increase was due to “higher receipts from gold, crude oil, and non-traditional exports, notwithstanding increased demand for oil and gas imports.”
He also noted that the country witnessed an increase in total exports to the tune of US$3.8 billion.
“Total exports went up by 19.5 percent year-on-year to US$11.8 billion. Crude oil exports totalled U$3.8 billion, 56.5 percent higher than observed in 2021, mainly due to price effects.
Gold export earnings also went up by 23.9 percent to US$4.2 billion, supported by increased production volumes triggered by the positive response from small-scale gold exporters to the downward revision of the withholding tax regime from 3 percent to 1.5 percent.
“However, on account of lower prices and low cocoa purchases, cocoa receipts declined by 22.8 percent to US$1.7 billion from US$2.1 billion.
Total merchandise imports grew by 12.9 percent on a year-on-year basis to US$10.2 billion, mainly driven by a higher oil and gas import bill of US$3.1 billion at the end-August 2022, relative to US$1.7 billion in the same period of 2021. Non-oil imports, however, dipped by 3.8 percent year-on-year to US$7.1 billion in the review period,” he added.
Prior to the postponement, the Bank stated that it was done so “to allow the decision on the policy rate to benefit from the broader talks to be held throughout the term.”
The MPC reviewed economic developments from Monday, September 20, 2022, through Friday, September 22, 2022, during its regularly scheduled meeting.
We hereby bring to the notice of the general public, a publication of the list of persons having accounts with Absa Bank Ghana Limited that have not been operated for a minimum of five (5) years and are classified as dormant, in accordance with the Banks and Specialized Deposit-Taking Institutions Act, 2016 (Act 930).
Dr Ernest Addison, the Governor of the Bank of Ghana (BoG), has said capping fuel prices is a wrong policy.
There have been calls for the government to intervene and cap the prices of fuel to cushion consumers.
But speaking at the 108th MPC press briefing in Accra on Thursday (6 October), Addison said, “Capping fuel prices is not an innovation. In fact, it is a wrong policy. When you have fuel prices rising and you also have a budget deficit problem, who is going to pay for the difference of the cost of fuel?”
“That will create further fiscal subsidies and worsen your fiscal deficit problem that we are all trying to resolve. So on the contrary, we should really be pushing towards full cost recovery to minimize the burden on the budget,” he added.
Oil prices held near three-week highs on Thursday after OPEC+ agreed to tighten global crude supply with a deal to cut production targets by two million barrels per day (bpd), the largest reduction since 2020.
Brent crude futures edged down 16 cents, or 0.2%, to US$93.21 per barrel by 1020 GMT after settling 1.7% up in the previous session.
U.S. West Texas Intermediate (WTI) crude futures lost 14 cents, or 0.2%, to US$87.62 after closing 1.4% up on Wednesday.
The Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) has increased its Monetary Policy Rateby 250 basis points to 24.5%.
Addressing the media, the Governor of the central bank, Dr. Ernest Addison, explained that the decision has been made check the rising rate of inflation as the country negotiate with the International Monetary Fund for an economic programme.
He explained that inflation remains elevated and the balance of risks is on the upside. Although the forecasts are for monthly inflation to continue to slow down, the risks are on the upside, emanating largely from pass-through effects of the currency depreciation, the recent upward adjustment in utility tariffs, and rising inflation expectations.
He therefore added that the committee therefore remains committed to re-anchoring inflation expectations and returning to a disinflation path.
The upward adjustment means it will become more expensive to borrow from banks, a situation that will push cost of living and doing business in the country further up.
BoG increases policy rate by 10% since March 2021
Since the Bank of Ghana first increase the policy rate in March 2021, the interest policy rate has gone up by 10%.
The Central Bank increased the policy rate by 2.5% on March 25, 2022 to 17%, and subsequently increased it on May 23, 2022 to 19%.
It again adjusted it upwards by 300 basis points to 22% in August 2022.
The Monetary Policy Committee of the Bank of Ghana is anticipated to make its decision following the postponement of its 108th scheduled meeting to discuss economic developments.
After the Committee delayed its statement to coincide with the conclusion of the IMF mission team’s visit to Ghana, this has happened.
The Bank earlier explained the postponement is “to allow the decision on the policy rate to benefit from the broader discussions to be held during the period.”
The MPC has held its regular meeting from September 20, 2022, to Friday, September 23, 2022, to review developments in the economy.
Meanwhile, inflation for the month of August hit 33.9% with food and transportation being the major contributors. With the rise in inflation, it is expected that the committee will further hike the policy rate.
A statement issued on Tuesday providing financial literacy education on dud cheques reiterated that anyone who fails to comply with the directive will be jailed or asked to pay a fine whilst their offense is reported to the credit reference bureau.
For first-timers, the central bank cautioned, “Your financial institution will place you under surveillance for a minimum period of three years when you issue a dud cheque for the first time.”
“Again, if you issue a dud cheque for the second time within three years of the first offense, your financial institution will report your conduct to the Bank of Ghana,”, adding “your details and the breach shall be recorded in a dud cheque register maintained at the BoG,” it explained.
But for third-time offenders, the Bank of Ghana said consumers will be banned from issuing cheques within the country for a minimum period of three years.
As part of the financial literacy education, the Bank of Ghana called on the public and institutions to ensure they had enough funds in their respective accounts prior to issuing a cheque.
When found culpable of issuing dud cheques, the central bank said consumers will be banned from accessing new credit facilities from all financial institutions for a period of three years.
It added that the perpetrators’ names will be published in the national newspapers.
According to Mr. Johnson Amoah, a financial analyst, the Bank of Ghana (BoG) had good reasons for withdrawing the licenses of Heritage Bank and other financial institutions during the central bank’s clean-up operation.
He clarified that the BoG provided sufficient justification for the actions against the bank.
“I’ve read rumors that the BoG was given the go-ahead to shut down Heritage Bank.
People are criticizing the Bank of Ghana’s decision, but in my opinion, there were sufficient grounds for the bank’s failure.
“The reasons were clearly given by the Bank of Ghana and I believe they make sense,” portions of his write up said.
The regulator came under section 16 (1) (a) (7) and (8) of Act 930, the Bank of Ghana may revoke a licence and appoint a receiver under section 123 of the Act where it is satisfied that an applicant provided false, misleading or inaccurate information in connection with the application for a licence or suppressed material information, and may in cases of emergency, or in the public interest revoke the licence of the bank without notice, to revoke the licence of Heritage Bank.
Further, sections 9 and 12 of Act 930 authorise the Bank of Ghana to revoke a licence if it considers that significant shareholders of a bank are not suitable.
The grounds for revocation of the licence are as follows: The bank’s capital appears to have come from sources which are suspicious. In the application for a banking licence, each shareholder of Heritage needed to demonstrate their “ability to subscribe to the shares” of the bank. The Bank of Ghana is not satisfied that the original sources of the bank’s capital are acceptable, in terms of section 9 (d) of the Banks and SDI Act, 2016 (Act 930) and section 1 of the Anti-Money Laundering Act of 2008 (Act 749) which requires acceptable capital to be obtained from lawful and transparent sources. Specifically:
The promoters of Heritage provided evidence to Bank
As compared to yesterday’s trading of a buying price of 9.6302 and a selling price of 9.6398. At a forex bureau in Accra, the dollar is being bought at a rate of 10.75 and sold at a rate of 10.90.
Against the Pound Sterling, the Cedi is trading at a buying price of 10.8513 and a selling price of 10.8641 as compared to yesterday’s trading of a buying price of 10.9871 and a selling price of 11.0000.
The Euro is trading at a buying price of 9.4978 and a selling price of 9.5082 as compared to yesterday’s trading of a buying price of 9.5898 and a selling price of 9.6003.
At a forex bureau in Accra, Euro is being bought at a rate of 10.25 and sold at a rate of 10.50.
The South African Rand is trading at a buying price of 0.5401 and a selling price of 0.5404 compared to yesterday’s trading of a buying price of 0.5460 and a selling price of 0.5461.
The Nigerian Naira is trading at a buying price of 45.2776 and a selling price of 45.3679 as compared to yesterday’s trading of a buying price of 45.2413 and a selling price of 45.2538.
At a forex bureau in Accra, Nigerian Naira is being bought at a rate of 12.00 Naira for every 1 Cedi and sold at a rate of 15.50.
First Deputy Governor of the Bank of Ghana, Dr. Maxwell Opoku-Afari, encouraged the innovators not to overlook the advantage they stand to gain when they incorporate sustainability into their products and services in a speech given on his behalf at the bank’s regulatory sandbox engagement forum in Accra. The forum brought together various Fintechs, partnering banks, and other financial institutions.
“Let me underscore the importance of responsible innovation in this endeavour. Globally, sustainability has taken centre-stage in all spheres of human activity. The need to assess possible negative impacts from our innovations on present and future societies has become more critical than ever.
“The plethora of phrases such as ‘green finance’, responsible investment, sustainable finance; environment, social and governance; and climate finance in current discourse indicate the seriousness modern society attaches to sustainable innovations.
“Adoption of responsible innovation presents in FinTech design ethos a unique national advantage, with the potential to attract investments into our FinTech ecosystem for the creation of employment and wealth,” he said.
The Bank of Ghana’s Regulatory Sandbox has been designed for innovators to test innovative financial products, services and business models in a controlled but live environment under supervision of the central bank.
To this end, Dr. Opoku-Afari emphasised that the Bank of Ghana will continue exercising strict oversight over the industry in order to protect integrity of the financial sector and investments of customers.
“To meet the changing needs of customers, as well as address challenges of the industry, calls for pragmatic and innovative solutions which confront the status quo. This we consider a shared responsibility of the regulator and the innovators to create a conducive environment for experimentation.
“This approach, though useful, has its own risks; and if not properly directed could be disastrous to society. A laissez-faire attitude to innovation and financial service delivery is therefore an unsuitable approach to accommodate.
“With regard to developments in virtual assets, the Bank continues to monitor developments on a regular basis; and the many cautionary notices issued indicate the presence of significant inherent risks.
“While we do stand by these cautions, we are open to dialogue geared toward the potential exploration of regulatory outcomes keenly focused on consumer interest and protection. The Sandbox could potentially present us with these opportunities,” he said.
Chief Executive Officer of the Telecom Chamber, Ken Ashigbey, commended the central bank for the Regulatory Sandbox project and urged regulators of other industries to also introduce similar programmes which will promote innovation in their respective sectors.
He urged the industry to come out with practical solutions and suggestions that support government to generate revenues from the digital space, and which will not bring about any disruption to their businesses.
As compared to yesterday’s trading of a buying price of 9.6200 and a selling price of 9.6296. At a forex bureau in Accra, the dollar is being bought at a rate of 10.65 and sold at a rate of 10.85.
Against the Pound Sterling, the Cedi is trading at a buying price of 10.9871 and a selling price of 11.0000 as compared to yesterday’s trading of a buying price of 10.8860 and a selling price of 10.8998.
The Euro is trading at a buying price of 9.5898 and a selling price of 9.6003 as compared to yesterday’s trading of a buying price of 9.4529 and a selling price of 9.4641.
At a forex bureau in Accra, Euro is being bought at a rate of 10.10 and sold at a rate of 10.40.
The South African Rand is trading at a buying price of 0.5460 and a selling price of 0.5461 compared to yesterday’s trading of a buying price of 0.5386 and a selling price of 0.5392.
The Nigerian Naira is trading at a buying price of 45.2413 and a selling price of 45.2538 as compared to yesterday’s trading of a buying price of 45.3142 and a selling price of 45.3911.
At a forex bureau in Accra, Nigerian Naira is being bought at a rate of 12.00 Naira for every 1 Cedi and sold at a rate of 15.50.
Mr Amoabeng, whose bank was also collapsed in the first term of the Akufo-Addo government, told Nana Otu Darko on CTV’s morning show, Dwabre Mu, on Tuesday, 4 October 2022: “I was pained by the collapse of Heritage Bank because it was young”.
“The Bank of Ghana had issued a licence to Heritage Bank and Heritage Bank had not operated for long and, so, unlike UT Bank, it had no bad loans or anything and it was a wholly-owned Ghanaian company that we had to nurture to grow”, he explained.
“Secondly, the owners of Heritage Bank found it fit to appoint a solid board”, he noted, adding: “I mean, the chairman was [Prof] Kwesi Botchwey. When it comes to finance in this country, he is the safest hands you can get; he’s seen it all”.
“As chairman, the board members run the bank, not the owner, so, I don’t know Seidu Agongo – as I told you, I haven’t met him before – but I know Kwesi Botchwey and I know his track record. So, if you have a bank that hasn’t got any baggage, it’s fresh and it’s got a board headed by Kwesi Botchwey, then it means its closure was a worse decision than UT Bank”, he further noted.
“As for UT Bank, we owed and they could have bailed [us out] but decided not to bail; that’s an option. That is why I mention that Heritage Bank, for example, was collapsed out of sheer wickedness”, he added.
Mr Amoabeng observed that the “unfortunately thing is the Bank of Ghana is supposed to be independent but I don’t think they were independent with their decision on Heritage Bank because, if they were independent, why do you issue a licence and withdraw it”
“When you were issuing the licence, didn’t you know the owners and the board?” he asked.
“It means they were told to withdraw the licence”, he deducted.
“And it’s not a fair way but it’s another dangerous path that Ghana has taken”, he regretted, noting: “Every institution has been politicised including even the army”.
“And that is why I am saying that for Heritage Bank, the institution that is supposed to be independent of the government, even though in principle, issues a licence and then withdraws that licence when the company hasn’t even done anything wrong”, Mr Amoabeng added.
Mr Amoabeng made similar comments a couple of years ago saying he found it “extremely odd” for the Bank of Ghana to have collapsed Heritage Bank Limited, which had no bad loans on its books and was being run by the “right people” within the industry.
In his view, the revocation of the licence of the Ghanaian-owned bank, whose founder, Mr Seidu Agongo, has always argued was above board, as far as its books were concerned, was not only politically motivated but also “extremely unfair and unfortunate”.
Asked directly by TV3’s Paa Kwesi Asare in an interview on Business Focus: ‘Do you think, as many think, that some of the decision to close down certain banks was politically motivated?’ Mr Amoabeng answered: “A few of them; specifically Heritage Bank”.
“I don’t understand the issue because the Chairman of the Board is Dr Kwesi Botchwey. I have a lot of respect for him when it comes to finance in this country and managing Boards and he will not, in my estimation, ever accept to be Chairman of a bank that is not right and dealing in all sorts of things. I can say that for him”, Mr Amoabeng, whose bank was also among the nine Ghanaian banks that were collapsed in the central bank’s financial clean-up exercise during President Nana Akufo-Addo’s first term of office, noted.
“So”, Mr Amoabeng noted:“I find it extremely odd that a bank – and it had not started doing business for it to have bad loans and all those things – and for you to say that the owner didn’t have what it takes [doesn’t meet the fit-and-proper criterion] or however they put it, I mean the owner doesn’t run the bank, he’s a Ghanaian, he’s got the money, he’s appointed the right people to run the bank for him, so, what is the excuse?”
“I find that extremely, extremely unfair”, Mr Amoabeng asserted, adding: “Maybe I don’t have all the facts, but from where I stand, I find it really unfortunate”.
The Bank of Ghana revoked Heritage Bank’s licence on Friday, 4 January 2019 on the basis that Mr Agongo, the majority shareholder, among other things, used proceeds realised from alleged fraudulent contracts he executed for the Ghana Cocoa Board (COCOBOD), for which he has been facing prosecution together with former COCOBOD CEO Stephen Opuni, for the past four years.
Announcing the withdrawal of the licence, the Governor of the central bank, Dr Ernest Addison, told journalists – when asked if he did not deem the action as premature, since the COCOBOD case was still in court – that: “The issue of Heritage Bank, I wanted to get into the law with you, I don’t know if I should, but we don’t need the court’s decision to take the decisions that we have taken. We have to be sure of the sources of capital to license a bank; if we have any doubt, if we feel that it’s suspicious, just on the basis of that, we find that that is not acceptable as capital. We don’t need the court to decide for us whether anybody is ‘fit and proper’, just being involved in a case that involves a criminal procedure makes you not fit and proper”.
However, Mr Agongo responded with a press statement in which he said that the “not fit and proper” tag stamped on him by the central bank was “capricious, arrogant, malicious and in bad faith”.
According to Mr Agongo, “In purportedly making the determination, the central bank obviously had little regard for the time-honoured principle that a person is presumed innocent until proven guilty by a court of competent jurisdiction”, adding that: “The fact that I have a case pending before the High Court is a matter of public knowledge but my guilt or innocence is yet to be determined by the Honourable Court”.
“The determination that I am not a fit and proper person to be a significant shareholder of HBL because the central bank suspects the funds are derived from illicit or suspicious contracts with Cocobod is not only calculated to pre-judge the outcome of the criminal proceedings but also violative of the principle of presumption of innocence to which every individual is entitled. Since when has suspicion become a substitute for credible evidence?” Mr Agongo asked.
Also, the erstwhile Prof Botchwey Board issued a statement on the matter in which it said: “Heritage Bank was by the Bank of Ghana’s own admission, a solvent bank. It never received liquidity support from the Bank of Ghana. Its corporate governance record had never been impugned by the Bank of Ghana. We believe we have been done a grave injustice and a terrible precedent set that does not bode well for the future”
Prince Kofi Amoabeng, founder of the now-defunct UT Bank,has revealed how he has been living since his bank went down during the Bank of Ghana’s (BoG) banking sector clean-up in 2017.
Asked how he has been doing in an interview on Business Focus on TV3 with Paa Kwesi Asare on Monday, October 3, he answered: “I have seen it virtually all the way to the top and I have seen it all the way to down. So, if I say I want to impact people and give them some leadership skills it is a complete thing, it is not like I have read from book and I am telling you what to do.
“I have experienced it from Kantamanto all the way to the most respected CEO and I have seen it go down. So it is a complete 360. So when I have to give or talk to people it is coming from my heart. I am quite passionate about it, I want them to avoid the potholes.”
“You must be liquid then, selling all these businesses?” he was asked by the host, Paa Kwesi.
In answer, he said: “No we didn’t sell the[businesses] they are running. They didn’t have much value, we sold to pay debt and even the debts are not fully paid .
Asked whether he is a man of straw, Mr Amoabeng answered: “I can be a man of straw, I am 70, I have kids that I have educated. I am not saying I live off them but I am quite frugal with with my life. I have one watch, I have one shoe so I don’t need much money. I don’t have to have a lot of money to enjoy life.”
“But you are comfortable?” host Paa Kwesi further probed.
He replied: “I am very comfortable and I have been blessed big time.”
“I don’t drive Range Rover anymore, I drive a Lexus.
“It is an upgrade. I live in an apartment and I am quite comfortable.”
“You sold your mansion for an apartment?” Paa Kwesi asked.
“I had to sell it to organize myself not to get broke,” he said.