The Ghana Union of Traders Association (GUTA) has requested the government to implement a peg of the US dollar to the cedi for at least a quarterly period for duty payments at the ports.
In a statement, the Union characterized the request as urgent in order to lessen the economic hardship facing Ghana’s business community.
The cost of duty at the ports has increased by roughly 30% as a result of a substantial increase in the Bank of Ghana’s weekly exchange rate, which was quoted by the Customs Division of the Ghana Revenue Authority (GRA).
The Association further indicated the injection of $750 million Afreximbank loan into the economy has culminated in the US dollar heading toward the GH¢11 mark and therefore requires quick intervention to salvage businesses from an imminent collapse.
“Within a few days of injecting about $ 750m into the system, the dollar is heading to 11. This has brought a great deal of confusion, frustration and exasperation in the business sector, especially, in the importing community, as well as the consuming public”.
“To make matters worse, the Bank of Ghana (BoG) weekly exchange rate for Ghana Revenue Authority-Customs Division has also risen from 8.2 to 9.5, which happened overnight. The change has shot up duty charges to about 30 percent”, it stressed.
“This situation is unbearable and needs swift action from the government to save businesses. As a result, GUTA is calling on the Government to, as a matter of urgency, peg the dollar for the purpose of duty payments, at least quarterly, to mitigate the plight of the business community,” the statement added.
Read the full statement below:
PRESS STATEMENT ON THE ALARMING RATE OF THE DOLLAR TO THE CEDI
WHAT CAN WE DO AT THIS POINT?
TRADERS ASK, AS THE CEDI IS ABOUT ELEVEN (11) GHANA CEDIS TO THE DOLLAR
Within a few days of injecting about US $ 750m into the system, the dollar is heading to eleven Ghana cedis (Gh11). This has brought a great deal of confusion, frustration and exasperation in the business sector, especially, in the importing community, as well as the consuming public.
To make matters worse, the Bank of Ghana (BOG) weekly exchange rate for Ghana Revenue Authority-Customs Division has also risen from 8.2 Ghana Cedis to 9.5 Ghana Cedis, which happened overnight. The change has shot up duty charges to about 30%.
This situation is unbearable and needs swift action from the Government to save businesses. As a result, Guta is calling on the Government to, as a matter of urgency, peg the dollar for the purpose of duty payments, at least quarterly, to mitigate the plight of the business community.
At this stage, it is becoming extremely difficult to service our bills, as well as pay our duty.
The question here is, what can we do at this point in time to continue to be in business?
In view of this hard situation, we find ourselves in, we would like to humbly appeal to the relative institutions particularly Bank of Ghana and the Ministry of finance, that came before the Joint Committee set up by the Office of the Council of State to expedite the necessary action for prompt response.
We are also by this release reminding government that depleting funds without being replenished is the number one cause of business failure.
Sampson Asaki Awingobit, the executive secretary of the Ghana Importers and Exporters Association, claims that the Customs Division of the Ghana Revenue Authority charges in dollars at the ports.
He claims that this violates the Bank of Ghana’s dollarization regulations regarding the costing of goods and services.
The Customs Management Act (Act 891) does not contain any language allowing customs to charge in foreign currencies, particularly US dollars, he continued.
The move, he said, heaps hardship on the already burdened business community which in turn affects the general public.
In an exclusive interview with GhanaWeb Business on Monday, October 3, 2022, the executive secretary of importers and exporters association said, “I think it’s time we Ghanaians call a spade a spade in the sense that we are here and Bank of Ghana issued a statement that let no one price their goods and services in dollars…I don’t know why customs which is a government agency is using dollar index in calculating duty for importers to pay.”
“I have not seen anywhere is the customs law that gave them the right to do…For me, they are the one increasing the compounded problems on the business community which goes ahead to affect the ordinary Ghanaian in this country,” he told GhanaWeb’s Ernestina Serwaa Asante in the phone interview.
The Bank of Ghana on Friday, September 16, 2022, entreated Ghanaians to report businesses that price their goods and services in foreign currencies, especially the US Dollar.
According to the Head of Financial Stability at the Bank of Ghana (BoG), Dr. Joseph France, it is unacceptable for businesses to price their goods in dollars without the permission of the central bank.
He said the act, which is criminal, breaches the Foreign Exchange Act.
The cedi is ranked as the worst among the 30 top-performing currencies on the African continent.
In July, August and September the cedi lost almost 21% in value to the US dollar, pounds sterling and Euro.
The cedi’s woes come on the back of high debts and low investor confidence which has made it impossible for Ghana to access the international capital market for borrowing.
The government says the IMF support is to help the country recover from challenges caused by external factors such as the covid pandemic and the Russia-Ukraine war.
Bank of Ghana interventions to stabilise the cedi:
1. Once disbursed, the recently approved US$750,000,000 Afriexim loan facility by Parliament, is expected to boost Ghana’s forex position.
2. The Cocoa Loan is expected in the last quarter of the year. This facility will also help provide more foreign currency to help address the cedi depreciation.
3. Gold Purchase Programme to increase foreign exchange reserves.
4. Special Foreign Exchange Auction for the Bulk Distribution Companies (BDCs) to help with the importation of petroleum products.
5. Bank of Ghana is entering into a cooperation agreement with the mining companies to provide BOG with the opportunity to buy gold as when it becomes available.
7. The IMF programme once finalised, will also go a long way to help restore confidence in the economy and drive portfolio flows. These measures will go a long way to increase the foreign exchange reserve position of the Central Bank.
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 4, 2022, the Ghana Cedi is trading against the dollar at a buying price of 9.6000 and a selling price of 9.6096.
Against the Pound Sterling, the Cedi is trading at a buying price of 10.6954 and a selling price of 10.7080 as compared to yesterday’s trading of a buying price of 10.6954 and a selling price of 10.7080.
The Euro is trading at a buying price of 9.4100 and a selling price of 9.4194 as compared to yesterday’s trading of a buying price of 9.4100 and a selling price of 9.4194.
At a forex bureau in Accra, Euro is being bought at a rate of 9.95 and sold at a rate of 10.30.
The South African Rand is trading at a buying price of 0.5334 and a selling price of 0.5337 compared to yesterday’s trading of a buying price of 0.5334 and a selling price of 0.5337.
The Nigerian Naira is trading at a buying price of 45.4866 and a selling price of 45.5095 as compared to yesterday’s trading of a buying price of 45.4866 and a selling price of 45.5095.
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.
Africa Money & Defi Summit, a premier tech event series, just wrapped up a two-day networking event to bring together African fintech and cryptocurrency executives.
The event, which took place at the Movenpick hotel in Accra from Tuesday, September 27, 2022, to Wednesday, September 28, 2022, aimed to examine the future of cryptocurrencies and decentralized banking in Africa.
About a hundred technical businesses and delegates from across the world attended this year’s event, which is also the West African Edition of the Africa Money and DeFi Summit, to connect business leaders from the African Fintech and cryptocurrency industries.
The summit seeks to educate individuals on DeFi easy payment methods, Web3, cybersecurity, investments policies, mobile money, and industry stakeholders among others.
According to the Founder of Africa Tech Summit, Mr Andrew Fassnidge, the use of Fintech and Crypto payments has come to stay even though it is in its early stages.
“I trust that the Bank of Ghana will play its regulatory role and collaborate with us to help Fintech and Crypto companies to improve on digitalized payment within and across Ghana”, he said.
Head of Fintech and operations at the Bank of Ghana, Mr. Kwame Oppong speaking at the event commended the organizers of the DEFI summit and lauded them for acknowledging the critical role the Bank of Ghana plays in the Financial and Economic growth of the economy.
He further assured them of support from the Bank of Ghana to Fintech and crypto industry players.
“The Bank of Ghana will continue to collaborate with the Fintech industry players to ensure a safe and sustainable regulation”, he assured.
Also speaking at the summit technologist and representative from Polygon, Mr. Shodipo Ayomide spoke about Web3 adding that Web3 was built on a foundation consisting of the core ideas of decentralization.
He also touched on some key benefits of Web3 and what it seeks to achieve.
“The benefits of Web3 is to create job opportunities, that is remotely reconnecting African talents to job within and outside their continents”, he noted.
The country manager for Visa Ms. Adoma Owusu explained some advantages of the use of contactless payment or cards worldwide.
“It is a very fast and reliable way to make payment as it makes it easy to make transactions across the globe wherever one may find him or herself”, she averred.
The DEFI Summit also included a panel discussion where panellists deliberated on how Crypto and Fintech can enlarge their territories across Africa as well as security measures to be put in place to make people trust their brand.
Other sessions of the summit included master class sessions for participants on various topics like Investments, Crypto and Real Estate among others.
Start-up Fintech companies like Deimos, QoreID, Celo, and Hedera among others were allowed to pitch their business ideas to potential investors present at the summit.
National Communications officer of the governing New Patriotic Party, NPP, Richard Ahiagbah has asked the opposition National Democratic Congress, NDC, to ’employ’ an American economist and academician, Prof. Steve Hanke.
Ahiagbah holds that Hanke who has become a serial economic critic of the government was engaging in actions that inured to the NDC’s benefit hence his call.
“Perhaps it is time for the NDC to formalize and announce their partnership with Steve Hanke because it is obvious,” he tweeted.
Days before, the Communications Director had also suggested that the NDC should replace outgoing General Secretary, Johnson Asiedu Nketiah with Prof. Hanke.
“The NDC’s Steve Hanke is a perfect replacement for General Mosquito,” his tweet of September 30, 2022 read.
Among Steve Hanke’s recent diagnosis of the economy is that it was tanking – an expression which means the economy is down and there are fears of a recession.
He has in on numerous occasions blamed the Akufo-Addo-led administration for putting the economy in a dire situation.
He has separately taken swipes at the Vice President, the governor of the Bank of Ghana, the Minister of Finance and more recently, Gabby Asare Otchere-Darko, a leading member of the NPP.
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 3, 2022, the Ghana Cedi is trading against the dollar at a buying price of 9.6000 and a selling price of 9.6096.
As compared to Friday’s trading of a buying price of 9.5537 and a selling price of 9.5633. At a forex bureau in Accra, the dollar is being bought at a rate of 10.46 and sold at a rate of 10.68.
Against the Pound Sterling, the Cedi is trading at a buying price of 10.6954 and a selling price of 10.7080 as compared to Friday’s trading of a buying price of 10.5502 and a selling price of 10.5626.
At a forex bureau in Accra, the pound sterling is being bought at a rate of 11.60 and sold at a rate of 12.00.
The Euro is trading at a buying price of 9.4100 and a selling price of 9.4194 as compared to Friday’s trading of a buying price of 9.3364 and a selling price of 9.3466.
At a forex bureau in Accra, Euro is being bought at a rate of 9.90 and sold at a rate of 10.30.
The South African Rand is trading at a buying price of 0.5334 and a selling price of 0.5337 compared to Friday’s trading of a buying price of 0.5307 and a selling price of 0.5309.
The Nigerian Naira is trading at a buying price of 45.4866 and a selling price of 45.5095 as compared to Friday’s trading of a buying price of 45.6955 and a selling price of 45.8168.
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.
Finance Minister Ken Ofori-Atta, according to Johns Hopkins University professor of applied economics Steve Hanke, has lost touch with reality on the performance of the Cedi.
On September 29, he said in a tweet that Ofori-Atta was “dreaming” to believe that the Bank of Ghana’s efforts to ensure the Cedi regains its value were “paying off.”
The Bank of Ghana’s attempts to control cedi depreciation, according to Ken Ofori-Atta, Ghana’s finance minister, are “paying off.”
Ofori-Atta must be dreaming, spoiler alert.
“The cedi has lost over 40% of its value against the USD since January 2020,” Prof. Hanke tweeted.
The economist who runs a project called ‘Troubled Currencies’ has consistently written off the local currency as the ‘central bank junk currency’ insisting that the only way to curb it depreciation was the installation of a currency board.
The Cedi has in recent times been experiencing a free fall against major trading currencies such as the US dollar.
At a point, some forex bureaus sold a dollar at GH¢10. The Bank of Ghana through its frequent hiking of the monetary policy rate has been trying to curb the situation.
The Finance Minister at a briefing on September 28 outlined other measures such as a Special Foreign exchange auction for bulk distribution companies and a Gold Purchase Programme which the central bank was implementing to stabilize the fall of the Cedi.
“As part of measures to shore up our reserves, improve exchange rate stability and address some of the funding needs, the Ministry successfully worked on a US$750 million Afreximbank loan facility which was received in August 2022,” he explained.
“The traditional Cocoa Syndication Loan, expected in the last quarter of 2022 which will promote the cocoa sector, will further help us build our FX reserves and provide a strong buffer for the cedi in the last quarter of the year,” Ken Ofori-Atta added.
As at July this year, for instance, the cedi lost its value by more than 20 percent to the US dollar.
In addition, recent economic downgrades by international rating agencies such as Fitch and Standards & Poors’ has also impacted the investor community at large, while Ghana awaits an International Monetary Fund, IMF, support programme which is expected to be accessible in 2023.
Director of Fintech and Innovation at Bank of Ghana Mr Kwame Oppong, has called on Fintech and Crypto Industry leaders to be resolute in building safe and resilient space to safeguard the interest of consumers.
He said the enormous opportunity for affordable digital delivery of financial services to enhance financial inclusion had emerged as a new business model product and mode of interaction, posing a significant challenge to governance regulation, consumer protection, and financial integrity.
“For this reason, the Bank of Ghana implemented reforms to enable innovation in the financial services industry without compromising financial stability of which the Payment and Services Act of 2019 is at the care.”
Mr Oppong made the call when he addressed about 400 Fintech and Crypto Industry leaders from across Africa at a two-day Africa Money and Decentralised Finance (DeFi) Summit – West Africa edition in Accra.
He noted that Act 987 and other related notices issued by the Bank of Ghana had non-traditional entities such as Fintech to be licensed to provide various digital financial services under a proportionate and risk-based licensing regime.
“The elevations of these team players are positively disrupting the financial services industry and generating competition while encouraging strategic partnerships among these banks and financial technology providers,” he stated.
Mr Oppong said immense benefits had been reaped from using the regulatory environment provided by the Bank of Ghana, resulting in phenomenal increases in financial inclusion from 58 per cent in 2017 to 68 per cent in 2021 and that this was noteworthy.
He said since the Fintech Innovation Office was established in 2020 at the Bank of Ghana, which was one of the few such outfits globally among central banks to regulate and supervise, a total of 47 payment service providers and mobile money operators, both Ghanaians and foreign, were approved across various licensing categories to provide payment services.
“The interest of the investors both local and international continue to increase on the account of the favourable regulatory regime and the abundance of opportunities. Similarly, the bank is noted for its open-door policy and constructive engagement with industry stakeholders, prospective service providers and innovators.”
The Director said a considerable resource have been invested in studying and monitoring development in virtual assets and similar products including decentralized finance applications, non-fund road tokens, among others.
“The Ghanaian ecosystem is still an upcoming frontier market and therefore it takes these studies and findings seriously. Our regulatory stance is in line with our mandate to ensure financial stability of which consumer protection and financial integrity are essential component,” he stated.
Mr Oppong said: “To this end, the Bank of Ghana would continue to monitor development and implement measures to forestall any risk in the ecosystem in collaboration with other regulators and stakeholders where necessary.
“Any regulation issued will be in line with our quest to promote safe, sustainable and inclusive innovation that kindle the confidence in the ecosystem, and I must emphasise that consumer trust is of utmost importance to any financial service industry and in this case a key ingredient to achiving our financial inclusion goals.”
Mr Andrew Fassnidge, Founder Africa Tech Summit Kigali and London, said the purpose of the summit was to discuss and connect people to do business and was attended by key stakeholders like startup ventures, banking regulators and investors.
The expectation was to see the growth of crypto across Africa and a new wave of DeFi to drive business and investment.
The Africa Money and Summit West Africa is a leading African fintech, decetralised finance, mobile money and crypto event brought by curators of Africa Tech Summit series and provides insight and networking within the Pan-African Fintech, DeFi and Crypto ecosystem.
The Bank of Ghana (BoG), which oversees the banking industry, has made it clearer than ever that it is open to discussions with cryptocurrency stakeholders about a comprehensive regulatory framework for the asset class, which could signal the start of a new era in the country’s journey toward digital finance.
Currently, cryptocurrencies are not legal tender as they are not regulated under any of the country’s laws; as such, they are not backed by any guarantees or safeguards and the central bank has had to issue cautionary directives to banks and other financial entities against dealings in cryptocurrency among other unregulated financial tools.
In a recent cautionary statement, the BoG said: “The Bank of Ghana advises the general public to exercise caution in respect of cryptocurrency transactions.
“The Bank further directs all licenced institutions – including banks, specialised deposit-taking institutions, dedicated electronic money issuers and payment service providers – to refrain from facilitating cryptocurrency transactions via their platforms or agent outlets”.
However, in a more conciliatory tone Mr. Oppong stated that the regulator is willing to find a middle ground with the crypto community as long as it does not mean sacrificing the consuming public’s welfare.
“As a regulator, we are open to dialogue with the cryptocurrency industry for mutual appreciation of our mutual perspectives toward a more altruistic model and regulatory outcomes in which consumer interest and protection are pre-eminent,” the watchdog’s representative remarked.
Since its inception, cryptocurrency has drawn the ire of regulators as it attempts to replace fiat currency without the accompanying regulation. Critics have said the checks and balances system of blockchain technology, on which it is based, is not sufficient to guard against fraud, money laundering and terrorism financing threats inherent in virtual currency operations.
These fears have been heightened following instances of high-value fraud and a nose-dive of the leading cryptocurrency – Bitcoin – from an all-time high of just under US$69,000 per Bitcoin in November 2021 to under US$20,000 in September 2022, with some analysts forecasting a dip to US$12,000 by the end of the year.
Nonetheless, regulators have begun to concede some ground; most notably by asking crypto exchanges to introduce know-your-customer (KYC) verifications.
Mr. Oppong noted that the BoG has been proactive in engaging developments driven by technology, saying it is the reason the Bank of Ghana has an open-door policy for engagement.
“We will continue being open to the understanding, interests, concerns and opportunities of all stakeholders to forge a collaborative solution that can help achieve our shared goals and expectations,” he said.
‘In our effort to promote fintech, though much progress has been made, there is so much more to be done,” he added.
He charged participants at the Summit to endeavour to contextualise innovation to address the peculiar challenges of the Ghanaian ecosystem, and by extension those of other emerging markets – with financial inclusion being a key element.
Founder of the Africa Tech Summit, Andrew Fassnidge, is optimistic that the meeting’s outcome will prove mutually beneficial in engagements with regulators.
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, September 30, 2022, the Ghana Cedi is trading against the dollar at a buying price of 9.5537 and a selling price of 9.5633.
As compared to yesterday’s trading of a buying price of 9.5435 and a selling price of 9.5531. At a forex bureau in Accra, the dollar is being bought at a rate of 10.30 and sold at a rate of 10.50.
Against the Pound Sterling, the Cedi is trading at a buying price of 10.5502 and a selling price of 10.5626 as compared to yesterday’s trading of a buying price of 10.2650 and a selling price of 10.2782.
The Euro is trading at a buying price of 9.3364 and a selling price of 9.3466 as compared to yesterday’s trading of a buying price of 9.1997 and a selling price of 9.2098.
At a forex bureau in Accra, Euro is being bought at a rate of 9.55 and sold at a rate of 10.42.
The South African Rand is trading at a buying price of 0.5307 and a selling price of 0.5309 compared to yesterday’s trading of a buying price of 0.5316 and a selling price of 0.5323.
The Nigerian Naira is trading at a buying price of 45.6955 and a selling price of 45.8168 as compared to yesterday’s trading of a buying price of 45.7987 and a selling price of 45.8982.
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.
Watch the latest episode of BizTech below:
BizTech: How artificial intelligence is predicting consumer sentiments, growth decisions
In order to promote greater financial inclusion for women, the Bank of Ghana (BoG) has urged financial service providers to review and create new financial solutions and models that specifically benefit women-owned businesses.
This is against the idea that prioritising SME development, especially among women, is vital for ensuring inclusive economic growth.
Ismail Adam, the Bank of Ghana’s Deputy Director of Banking Supervision, asserts that SMEs are essential for sustaining economies all over the world and fostering economic progress.
He observed that in most developing economies SMEs form the bedrock of socio-economic development, contributing significantly to GDP, job-creation and improved livelihoods. For instance, in Ghana SMEs form about 92 percent of all registered businesses, and thus are seen as the driving force behind any resilient national economy, he added.
However, despite the contribution of SMEs to economic development, he noted that their access to finance remains a key constraint.
Aside from the financing gap, he said: “SMEs, particularly women-led SMEs, face several additional challenges to start and build a business – including unwritten social and cultural norms, lack of awareness about legal rights, lack of economic and training opportunities among other constraints”.
Given this development, the Deputy Director asserted that effective policies which facilitate access to credit for women-owned/led enterprises require a clear understanding of these constraints for them to work effectively.
Mr. Adam was speaking at a project learning conference organised by Sinapi Aba Savings and Loans Trust, and encouraged stakeholder engagements on addressing the challenges of women-led SMEs in order to consider all the key factors and make inroads.
The project learning conference was on implementation of the ‘Financial Inclusion for Enterprise Development (FINEDEV)’ programme for women by Sinapi Aba and its partners – Global Affairs Canada and Opportunity International Canada (OIC).
He said while the BoG’s mandate generally focuses on price as well as financial stability, it has also made room for financial innovation and inclusion.
“Regulatory frameworks, when carefully designed, can promote financial stability on one hand, while ensuring that businesses, households and individuals at the lower end of the market gain access to critical financial services and products through financial innovation.
“One of the means through which the Bank of Ghana has used regulation to promote financial inclusion and innovation in Ghana was opening-up the electronic money space to non-banks and FinTech partnering banks,” he said.
This, he noted, has led to increased access to financial services and products for previously underserved groups, especially women.
The Chief Executive of Sinapi Aba, Tony Fosu, said FINEDEV focuses on supporting some selected women – initially 18,000 – who operate micro-small businesses to grow their business to SME-level.
As part of the programme, he said, they are provided with financial services and taken through mentorship programmes, among others, to achieve ultimate business transformation while impacting their households and societies.
He indicated that the five-year project is anticipated to impact over 200,000 women-led SMEs in the next 10 ten years.
The Chief Executive of Opportunity International-Canada, Dan Murray, acknowledged that FINEDEV is also supported by Global Affairs-Canada, and notes that the programme has created a pathway out of poverty for beneficiaries.
“It touches us to see the direct impact in the lives of clients who have found sustainable pathways out of poverty. The ultimate goal is that clients acquire sustainable livelihoods so they can provide a brighter future for their families, and take the next step of creating jobs for others to benefit,” he said.
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, September 29, 2022, the Ghana Cedi is trading against the dollar at a buying price of 9.5435 and a selling price of 9.5531.
As compared to yesterday’s trading of a buying price of 9.5385 and a selling price of 9.5481. At a forex bureau in Accra, the dollar is being bought at a rate of 10.30 and sold at a rate of 10.50.
At a forex bureau in Accra, the pound sterling is being bought at a rate of 11.90 and sold at a rate of 12.00.
The Euro is trading at a buying price of 9.1997 and a selling price of 9.2098 as compared to yesterday’s trading of a buying price of 9.1613 and a selling price of 9.1706.
The South African Rand is trading at a buying price of 0.5316 and a selling price of 0.5323 compared to yesterday’s trading of a buying price of 0.5298 and a selling price of 0.5303.
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 45.7987 and a selling price of 45.8982 as compared to yesterday’s trading of a buying price of 45.6132 and a selling price of 45.7504.
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.
The minority party’s spokesperson on finance, Cassiel Ato Forson, has questioned the government’s motivation to reach an agreement with the IMF priorto the preparation of the 2023 budget.
“I doubt in the next six weeks we are going to have a programme. That will be a magic of a lifetime,” he said on Eyewitness News.
In his view, any deal before the 2023 budget will not be in Ghana’s interest.
“It will mean we are just going to be yes men and accept everything they say,” said Mr. Forson.
The Director of Strategy and Business Operations at Dalex Finance, Joe Jackson, however, said he was willing to give the Finance Minister some benefit of the doubt.
He added that the targets are aggressive, but both parties are operating with an awareness of the urgency of the situation.
“Unless somebody shows me any reason that the team is not going to work day and night to achieve that target, I will be cautiously optimistic,” Mr. Jackson said.
An IMF team is in Ghana until October 7 to continue discussions with the government on policies and reforms that could be supported by a lending arrangement.
The Ministry of Finance and the Bank of Ghana have commenced a comprehensive debt sustainability analysis with the IMF for a $3 billion support programme.
The meeting with the IMF comes amid concerns that Ghana is about to start talks with domestic bondholders on a restructuring of its local-currency debt.
An economist,Dr. Adu Sarkodie, hopes the government will consider bilateral partners first when working on the country’s debt restructuring.
“Left to me alone, I think the first people we should deal with are the bilateral loans because it is quite easy,” Dr. Sarkodie said on The Point of View on Citi TV.
“They understand issues. That is why it was easy for us to get the HIPC [Highly Indebted Poor Country] relief because once you talk to them, these countries are likely to forgive our debt or give us a haircut or understand our situation.”
He estimates that favourable negotiations with bilateral partners could see Ghana deal with 30 percent of its debt.
Though Dr. Sarkodie said there could be mixed results, he believes the backing of the IMF gives Ghana an advantage.
“As a whole, I think the government will be able [to restructure our debts], especially with the backing of the IMF.”
Dr. Sarkodie stressed further that Ghana needed the buy-in of bilateral partners “other than that we are doomed.”
An IMF team is in Ghana until October 7 to continue discussions with the governmenton policies and reforms that could be supported by a lending arrangement.
The Ministry of Finance and the Bank of Ghana have commenced a comprehensive debt sustainability analysis with the IMF for a $3 billion support programme.
Efforts put in place by the government and the Bank of Ghana to arrest the free fall of the cedi against major trading currencies, especially the US dollar, are paying off.
This was disclosed by the Minister of Finance, Ken Ofori-Atta, when he briefed the press on Wednesday, September 28, 2022.
Recent data from the Finance Ministry show that the cedi has depreciated by 37.1% against the US dollar as of September 27, 2022.
The cedi is currently struggling on the forex market as it is selling close to 10 cedis per dollar.
Ofori-Atta was hopeful the cedi will experience an appreciation in the coming days following the several measures introduced.
He further indicated that the Bank of Ghana has also introduced enhanced measures such as a Special Foreign exchange auction for bulk distribution companies and a Gold Purchase Programme to contain the depreciation of the cedi.
“As part of measures to shore up our reserves, improve exchange rate stability and address some of the funding needs, the Ministry successfully worked on a US$750 million Afreximbank loan facility which was received in August 2022. The traditional Cocoa Syndication Loan, expected in the last quarter of 2022 which will promote the cocoa sector, will further help us build our FX reserves and provide a strong buffer for the cedi in the last quarter of the year.”
“Additionally, the Bank of Ghana has introduced enhanced measures such as a Special Foreign exchange auction for bulk distribution companies and a Gold Purchase Programme to contain the depreciation of the cedi, which is now slowing down,” he added.
Economy on gradual upswing despite numerous shocks
Mr. Ofori-Atta also said Ghana’s economy is recording some marginal growth despite recent ravaging shocks.
“Overall, our growth outturn of 3.4% and 4.8% in Q1 and Q2 of 2022 respectively, coupled with modest improvements in our fiscal position, suggests our economy is gradually on the upswing despite the numerous shocks we have faced over the past two years,” he said at a press briefing on Wednesday.
“These figures demonstrate that in spite of recent challenges, there has been economic growth, modest as the gains so far may be,” the Finance Minister added.
Mr. Ofori-Atta said this progress gives Ghana a solid foundation to confront its economic challenges head-on.
The Bank of Ghana has provided advice to those who have obtained loans using mobile money platforms but have consciously chosen not to register their SIM cards as part of the ongoing national SIM Card registration drive in an effort to avoid making loan repayments.
The Central Bank in a statement indicated that data of all mobile money loan customers are domiciled in the databases of credit bureaus.
BoG cautioned that failure torepay such loanswill attract “negative repercussions on borrowers’ credit reports/history and could subsequently adversely affect any chance of obtaining loan facilities from other financial institutions and credit providers in the future.”
The Central Bank advised all borrowers who have discarded theirSIM cardsto contact their telecommunication service providers or respective lenders, to discuss repayment arrangements to avoid adverse information on their credit reports, that could deny them access to future credit facilities.
The ongoing attempts to stop the chronic devaluation of the cedi against the major trading currencies, according to Finance Minister Ken Ofori-Atta, will soon start to bear fruit.
He claims that the Bank of Ghana has taken some action to address the issue affecting the cost of living in the nation.
On September 28, Ken Ofori-Atta provided an overview of the steps being taken to stop the devaluation of the cedi, including a Special Foreign Exchange Auction for bulk distribution businesses and a Gold Purchase Program.
“As part of measures to shore up our reserves, improve exchange rate stability and address some of the funding needs, the Ministry successfully worked on a US$750 million Afreximbank loan facility which was received in August 2022,” he explained.
“The traditional Cocoa Syndication Loan, expected in the last quarter of 2022 which will promote the cocoa sector, will further help us build our FX reserves and provide a strong buffer for the cedi in the last quarter of the year,” Ken Ofori-Atta added.
The local currency has since the start of this year significantly lost its value against major trading currencies, especially the US dollar.
The cedi is currently selling at around GH¢10.00 to the US dollar on the forex market – a situation which has impacted the currency’s performance and resulted in a high cost of living.
Demand for forex has also overtaken supplies during a period when high debts and low investor confidence have made it impossible for Ghana to access the international capital market for borrowing.
As at July this year, the cedi lost its value by more than 20 percent to the US dollar.
In addition, recent economic downgrades by international rating agencies such as Fitch and Standards & Poors’ has also impacted the investor community at large, while Ghana awaits an IMF support programme which is expected to be accessed in 2023.
A report by the Bank of Ghana has revealed that Ghana’s pension industry has not been negatively impacted by the economic challenges facing the country.
The latest Financial Stability Review by the central bank shows that private pension fund assets rose from GH¢28 billion in 2021 during the fourth quarter to
GH¢31.4 billion by the end of June 2022. Pension funds’ assets are assets bought with contributions to a pension plan for the exclusive purpose of financing pension plan benefits.
The report attributed the success to the “increased contribution mobilization through effective prosecution of defaulters and favourable investment
outcomes.” However, the Bank of Ghana says “preserving the value of private pension funds and achieving a positive real rate of return on the investment of contributors’ funds, given the upsurge in the inflation rate, is becoming increasingly difficult.”
The country’s inflation has been on a consistent rise since May (27.6%). In June, the inflation rate stood at 29.8%, increasing by 1.9% to 31.7% in July. It has so far risen to 33.9% as of August. Still on the downside of matters, assets available for benefits of the SSNIT-managed Basic National Social Security Scheme (BNSSS)
dropped marginally by 2.3% to GH¢11.28 billion in March 2022.
In the fourth quarter of 2021, the assets available for benefits were worth GH¢11.54 billion. “The benefits paid under the BNSSS continued to outstrip
contributions received. The scheme also continued to post a negative real rate of return, recording -12.6 per cent at the end of the first quarter of 2022,”
the central bank also noted in its report.
The central bank, headed by Dr Ernest Addison, is optimistic about an improvement, which is dependent on public indebtedness being redeemed. Also, “it is expected that macroeconomic conditions will improve in the 2nd half of the year to enable the private pensions industry to achieve a positive real rate of return on investments of pension assets.”
Meanwhile, the Social Security and National Insurance Trust (SSNIT) as intensified its outreach to the informal sector to improve pension coverage.
Outlook of pension funds in 2021 Total pension funds of the Three-Tier Pensions Scheme, which is fully-funded and privately managed, increased to GH¢39.6
billion at the end of December 2021.
There has been an increase of 18% in pension funds (savings accumulated during the working life of an employee) as 2020s figure stood at GH¢33.5 billion. However, last year’s percentage increase was less compared to the growth witnessed from 2019 to 2020; 27 percent. According to the central bank’s
report based on figures provided by the National Pensions Regulatory Authority (NPRA), the decreased growth rate can be attributed to “the ongoing lump sum payments under the private pension schemes and the marginal growth of the Basic National Social Security Scheme (BNSSS).”
The Social Security and National Insurance Trust, a statutory public trust, is charged under the National Pensions Act, 2008 Act 766 with the administration
of Ghana’s Basic National Social Security Scheme. SSNIT’s mandate is to cater for the First Tier of the Three-Tier Pension Scheme.
Private pension funds, on the other hand, continued on a positive growth track in 2021, as it recorded GH¢28.02 billion from the GHc22.02 billion computed in 2020. “The sustained growth in private pension funds could be linked to better returns on investments and also the prosecution of defaulting Tier 2 employers, which increased contribution inflows,” the central bank explained.
Tier 2 is a mandatory, fully- funded and privately managed occupational scheme. As part of its mandate, the
NPRA prosecuted all employers who defaulted on their Tier 2 contributions in 2021. A total of 10 employers who defaulted in paying their Tier 2 contributions
were prosecuted. In carrying out its mandate, the authority retrieved a total amount of GH¢7.8 million, the central bank added.
Ken Ofori-Atta, Ghana’s minister of finance, has revealed that as of September 27, 2022, the Ghana cedi had lost 37.1 percent of its value against the US dollar.
Since the beginning of this year, the local currency has experienced a dramatic decline in value versus the major trading currencies, particularly the US dollar.
A high cost of living has come from the cedi’s poor performance in the retail market and forex bureaus, where it is now trading at roughly GH10.50 to the US dollar.
However, Ken Ofori-Atta told reporters at a news conference that the Bank of Ghana has implemented some improved steps to combat the depreciation of the cedi.
“Some of these measures entail a Special Foreign exchange auction for bulk distribution companies and a Gold Purchase Programme to contain the depreciation of the cedi, which is now slowing down,” the Finance Minister said.
At the start of 2022, demand for forex overtook supplies during a period when high debts and low investor confidence have made it impossible for Ghana to access the international capital market for borrowing.
The situation has resulted in the persistent depreciation of the Cedi against the major trading currencies.
As at July this year, the cedi lost its value by more 20 percent to the US dollar.
In addition, recent economic downgrades by international rating agencies such as Fitch and Standards & Poors’ has also impacted the investor community at large, while Ghana awaits an IMF support programme which is expected to be accessed in 2023.
Governor of the Bank of Ghana(BoG) Dr Ernest Addison says the Bank will not relent in its efforts to tame inflation and attain price stability despite global and local pressures.
In a speech read on his behalf at the 39th Annual General Meeting (AGM) of Ghana Association of Banks by the Head of Banking Supervision at the central bank, Osei Gyasi, the Governor said although inflation remains significantly above the medium target band, the bank was committed to the tight monetary policy stance to achieve price stability.
Dr Addison said the banking sector had been resilient but warned that recent developments in the macroeconomy pose some upside risks to the wider financial sector and urged the banks to employ strong risk management systems to ensure the stability of the banking industry.
“Currently, the banking sector continues to exhibit strong performance despite challenges in the macroeconomic environment. The sector remains healthy with some improvement in assets.
However, the recent developments in the micro economy may put some outside risk to the sector in the outlook, hence banks must deploy a strong risk management system to ensure stability,” he said.
On her part, Mrs Mansa Nettey, President of GAB, said while the government was taking the necessary actions to achieve debt sustainability, it should not be done at the expense of gains in the sector.
“Government must ensure that this is not done at the cost of financial sector stability, inadvertently undoing so much of what has been achieved in strengthening the banking sector, as a sound and stable economy needs an equally sound and stable banking system, one that can support the country’s long-term goals.”
Mrs Nettey said further stated that while the industry recognises drastic measures need to be taken by the central bank in effectively combatting inflation, banks must be encouraged with regulatory incentives to soften the impact.
“We recognise that the Bank of Ghana had to front-load the tightening; however, they must be provided with regulatory incentives to help them navigate the current economic challenges and continue to support the economy,” she said.
With the expectation of a tough business environment in the near term, she said it is important that banks review existing operations and investment strategies to ensure sustainable performance as they remain risk-aware and undertake effective credit management processes.
Speaking in an interview with Journalists, the Chief Executive of the Ghana Association of Banks, John Awuah, said the industry was adopting strategies to deal with digital-related fraud.
He said the banks were working to find solutions by arresting and prosecuting such offences as well as retooling to be able to detect and avoid some of these activities.
Meanwhile, the Association has launched the second edition of its magazine known as the Banker’s Voice.
The magazine, with support from the Auditing and Accounting Firm, KPMG, as the knowledge partner, analyses the prospects of the industry and some signals that may keep the financial sector going.
The Bank of Ghana has sounded a strong warning to individuals who have acquired loans through mobile moneyplatforms, but have deliberately refused to register their SIM cardsto evade repayment.
In a press release dated September 28, the central bank revealed a number of repercussions that would be applied on such defaulters.
“Failure to repay such loans will attract negative percussions on borrowers’ credit reports/history and could subsequently adversely affect any chance of obtaining loan facilities from their financial institutions and credit providers in future,” the BoG noted.
According to the Bank of Ghana, this is possible since it has the data on all mobile money loan customers are domiciled in the databases of credit bureaus.
The central bank is not keen on sanctioning such persons, therefore, has advised “borrowers who have discarded their SIM Cards to contact their telecommunication service providers or respective lenders and discuss repayment arrangements.”
After September 30, 2022, all unregistered SIM cards will be deactivated, the National Communications Authority (NCA) has announced.
Mobile Money transactions for first half of 2022
Total Mobile Money transactions in the first half of 2022 significantly surpassed cheque transactions by a massive ¢366.7 billion, the Summary of Economic and Financial Data from the Bank of Ghana revealed.
This was however less than the ¢374.8 billion recorded during the same period of 2021.
Whilst, total Mobile Money Transaction in the first-half of 2022 stood at ¢480 billion, that of cheque transactions was ¢113.3 billion.
This is against ¢476.7 billion (Mobile Money) and ¢101.9 billion (cheque) during the same period in 2021.
According to the data from the Bank of Ghana, the value of mobile money transactions in first half of 2022 were January 2022 (¢76.2 billion), February 2022 (¢76.8 billion), March 2022 (¢90.5 billion) and April 2022 (¢87.7 billion), May 2022 (¢71.4 billion) and June 2022 (¢77.4 billion).
For cheque, the total value were January 2022 (¢16.1 billion), February 2022 (¢16.8 billion), March 2022 (¢21.8 billion), April 2022 (¢18.3 billion), May 2022 (¢20.3 billion) and June 2022 (¢20.0 billion).
Vice President Dr. Mahamudu Bawumia spoke about current global economic issues and how Ghana is dealing while in Kenya a few days ago to attend President Ruto’s inauguration.
In an interview with Kenyan media, Dr. Bawumia also emphasized the advantages of the African Continental Free Trade Area (AfCFTA), whose secretariat is Ghana, and how it will significantly contribute to the continent’s continuing economic progress.
“African trade must be independent; this is something we are really passionate about.
He told The Standard that there are several prospects and untapped potential.
When asked about the current economic situation facing Ghana specifically with high levels of inflation, Bawumia emphasised it is a problem affecting all global economies following the global pandemic and Russia’s invasion of Ukraine.
“We are trying to deal with the issue in this context of very squeezed and tight budgets. On the monetary side, the Central Bank is trying to contain inflation through a number of interest rate increases. Ultimately, you deal with this crisis by expanding your production. If it is a food crisis, then we need to increase food production” he told KTN News in an interview.
To further lessen the burden on families in Ghana in terms of increasing living costs, Dr. Bawumia said government continues to offer free secondary school education to citizens and is exploring other ways in which it can help all Ghanaians cope with the global crisis.
“For the government, central to Ghana’s recovery is a bottom-up economic model that includes all Ghanaians from all over the country, from all backgrounds. The NPP’s ongoing digitisation agenda is an example of this strategy that is helping all Ghanaians move forward and not be left behind,” Dr Bawumia said.
The Vice President, during his time at the Bank of Ghana, helped to reduce inflation from 40 percent to just 10 percent and is now drawing on his decades of experience to help Ghana move forward and recover.
The government may encounter some difficulties in financing the repayment of Treasury bills that are due on October 3, 2022, according to a report by Databank Research.
This may be related to the anticipated domestic debt restructuring, the bank’s research arm highlighted in its Weekly Fixed Income update.
Myjoyonline.com states that assistance from the Bank of Ghana may be requested in order to secure more advantageous refinancing choices.
The whole maturities of the 91-day to 182-day treasury bills of GH786.6 million are anticipated to be refinanced for a total of GH905 million.
“Last week, Fitch Ratings downgraded Ghana’s Issuer Default Rating from ‘CCC’ to ‘CC’. They cited possible debt restructuring, high debt service, and constrained financing as reasons for the recent downgrade. This is expected to complicate the refinancing options of the Treasury on the maturing paper on October 3, 2022, as pricing for a refinancing offer will likely be unfavorable,” parts of the report quoted by myjoyonline.com revealed on September 27, 2022.
The government is expected to offer ¢905 million across the 91-day to 182-day bills to refinance total maturities worth.
The report also projected that investors may maintain interest in short-term securities in the secondary market.
“We expect investors to focus on T-bills in the primary market. Investors may also be on the lookout for a bond offering to refinance the maturing paper on October 3, 2022. We expect investors to maintain interest in near-term maturities in the secondary market,” it added.
Treasury bills undersubscribed for the first time in almost 4 months
Treasury bills subscription for the past week was undersubscribed by almost 10 percent for the first time in almost 4 months.
The under subscription is a big deviation from the recent trajectory where T-bills have been over-subscribed.
Interests on T- bills have been on the upward trajectory in recent times with the 91-day T-Bill posting a 30% interest per anum, from 29.90% the previous week while the 182-day bill moved from above 31% to 31.34%.
However, out of a target of ¢1.33 billion cedis government secured ¢1.19 billion from the sale of the short-term securities.
Meanwhile, Ghana’s creditworthiness status has been further downgraded to junk status from CCC to CC by Fitch on September 23, 2022.
Even though the sale of the Treasury bills took place on the same day as the downgrade, it cannot be firmly established that the downgrade was the reason for the under-subscription.
But whether or not the downgrade can have further repercussions on government securities and/or bonds, is a possibility worth exploring.
Fitch’s downgrade meant that the likelihood of the government defaulting on its loans is high, a situation that sends a bad signal to the investor community.
Government must as a matter of urgency finalize negotiations with the International Monetary Fund to restore investor confidence in the economy.
Dr. Ernest Addison, governor of the Bank of Ghana (BoG), has stated that despite domestic and international factors working against the BoG’s attempts to combat inflation and achieve price stability, the monetary authority will not give up.
The Governor made the remark in a speech that was read on his behalf at the 39th Annual General Meeting (AGM) of the Ghana Bankers’ Association (GAB) by the head of banking supervision at the central bank, Osei Gyasi, without making any indication that a rate increase was forthcoming.
“With continued pressures and heightened inflation expectations… considering that inflation remains significantly above the medium target band and upside risks to inflation remain elevated, the bank will stay committed to the tight monetary policy stance to attain its price stability mandate,” he remarked.
The central bank’s posture appears similar to that of its peers across the globe, including US Federal Reserve Chairman Jerome Powell – who promised to keep at the fight and warned stakeholders of ‘pain’ in the pursuit of its inflation-reduction goal.
Stakeholders will have to wait a little longer to see what direction the BoG goes after it rescheduled its 108th regular Monetary Policy Committee (MPC) meeting to coincide with end of the IMF mission – so as to allow the decision on policy rate to benefit from the broader discussions to be held during the period, with a decision on the monetary policy stance to be announced on October 7, two weeks after the initial date of September 23.
Already, the monetary authority has raised its benchmark rate by 850 basis points (bps) since November 2021; and the Cash Reserve Requirement (CRR) is on course to reach a cumulative year-to-date hike of 700 bps, when measures announced by the BoG at the emergency sitting of the MPC in August are fully realised in November.
The BoG’s Inflation Targetting framework continues to come under scrutiny over its limitations in constraining the current spiking of inflation, which is driven more by supply-facing factors.
In its commentary ahead of the next MPC meeting, the Institute of Economic Affairs (IEA) reiterated this when it said: “We have repeatedly pointed out the inadequacy of the Inflation Targetting framework in dealing with these supply and cost drivers of inflation, especially at the primary level”.
The IEA however acknowledged the framework’s role in stemming potential second-round inflation, while reiterating calls for policy interventions that directly target the supply and cost factors.
Industry focus
In spite of the resilience exhibited by banks over the last few fiscal year, Dr. Addison said, recent developments in the macroeconomy pose some upside risks to the wider financial sector – and banks in particular.
He thus enjoined them to employ strong risk management systems to ensure the stability of their respective institutions and also the entire banking industry.
In June 2022 the major financial soundness indicators (FSIs) for the banking sector were still strong, with measures for maintaining solvency, liquidity and profitability all remaining above regulatory thresholds and generally improving from the same time last year.
The industry’s Non-Performing Loans (NPL) ratio also improved as a result of a slowing in the accumulation of NPLs and a pick-up in credit growth. However, the rising stock of NPLs shows that industry-wide asset quality problems still exist.
The banking sector’s total assets increased by 22.8 percent to GH¢200billion at end of June 2022 – higher than the growth of 17.2 percent recorded in the previous year.
At the end of the same period, the banking sector’s asset structure was still skewed toward less hazardous assets; as investments, cash, and bank balances made up 63.9 percent of total assets, down from 67.2 percent in June 2021.
This was due, in part, to the increase in Cash Reserve Ratio (CRR) requirement from 8 to 12 percent in March 2022: the share of cash and bank balances increased from 20.7 to 23.4 percent during the review period.
On the other hand, although investments continued to dominate the asset mix, their proportion in the asset-mix fell from 46.5 percent to 40.5 percent over the same comparison period.
As compared to yesterday’s trading of a buying price of 9.5366 and a selling price of 9.5462. At a forex bureau in Accra, the dollar is being bought at a rate of 10.30 and sold at a rate of 10.49.
Against the Pound Sterling, the Cedi is trading at a buying price of 10.1745 and a selling price of 10.1885 as compared to yesterday’s trading of a buying price of 10.4083 and a selling price of 10.4216.
The Euro is trading at a buying price of 9.1712 and a selling price of 9.1822 as compared to yesterday’s trading of a buying price of 9.2666 and a selling price of 9.2776.
At a forex bureau in Accra, Euro is being bought at a rate of 9.70 and sold at a rate of 10.42.
The South African Rand is trading at a buying price of 0.5264 and a selling price of 0.5271 compared to yesterday’s trading of a buying price of 0.5308 and a selling price of 0.5315.
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 45.5913 and a selling price of 45.7747 as compared to Friday’s trading of a buying price of 45.5709 and a selling price of 45.7480.
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.
The Ministry of Finance and the Bank of Ghana have commenced discussions with the International Monetary Fund (IMF) for the second time for an IMF-supported programme.
The government is also expected to begin negotiations with the IMF this week which will last for about two weeks.
“Government negotiations with respect to the IMF-supported programme is commencing this week and we are optimistic about making progress in our discussions,” a statement issued by the Ministry noted.
In order to achieve a programme from the IMF, the government says it has put together a “comprehensive post COVID-19 economic programme which will form the basis for the IMF negotiations.”
This programme, the Ministry said is to establish a macro-fiscal path that ensures debt sustainability and macroeconomic stability underpinned by key structural reforms and social protection.
Meanwhile, the Ministry of Finance has disclosed that it is currently undertaking a debt sustainability analysis to confirm the country’s debt sustainability.
The Ministry in a statement on Monday, September 26 said this is necessary as it is a prerequisite for an IMF Programme.
The IMF has also announced that its economic programme with Ghana will focus heavily on debt sustainability.
This was captured in a Question and Answer statement issued by the IMF as it begins deliberations with the Government of Ghana on an Economic Programme aimed at stabilising Ghana’s economy.
The IMF also added that the programme will support the credibility of government policies, restore confidence in the central bank’s ability to manage inflation and accumulate foreign exchange reserves to help the local currency withstand headwinds.
On the Fiscal sector, the IMF noted that an important policy objective would be to increase revenues, critical for debt sustainability while safeguarding spending on health, education, and social protection.
Details of the engagement
Dr. Stephane Boudet is expected to lead the IMF mission team members made up of senior economists, research analysts, and communication officers.
Joy Business is learning that issues about the country’s current fiscal position as well as steps taken to improve the revenue situation will come up.
The IMF team will engage the Finance Minister, Ken Ofori-Atta, the Governor of the Bank of Ghana, Dr. Ernest Addison, Vice President Dr. Mahamudu Bawumia, some business associations, civil society groups and parliament.
The IMF in its Question and Answer statement maintained that the engagement follows several visits in recent months to engage with the authorities.
The Bank of Ghana’s (BoG) Monetary Policy Committee (MPC) will not be holding its routine quarterly meeting today, Monday, September 26, 2022, as scheduled.
A statement from the Central Bank last Thursday said the rescheduled meeting will now coincide with Government’s next round of engagements with the International Monetary Fund (IMF).
The Fund is scheduled to begin these rounds from September 26 to October 7, on Government’s policies and reforms that could be supported by its lending arrangement.
The team, which will be led by its Mission Chief for Ghana, Stephane Roudet, is also expected to further engage with other stakeholders in the course of the visit.
Following the development, the Monetary Policy Committee says it will announce the next monetary policies on October 7, the day the engagements with the IMF will be concluded.
The last IMF mission to Ghana was between July 6 and July 13, 2022. The team used the opportunity to assess Ghana’s economic situation and discussed the broad lines of the government’s Enhanced Domestic Program that could be supported by an IMF lending arrangement.
The IMF team met with Vice President Bawumia, Finance Minister Ofori-Atta, and the Governor of the Bank of Ghana.
The team also met with the Parliament’s Finance Committee, civil society organizations, and development partners, including UNICEF and the World Bank, to engage on social spending.
Ghana is currently looking to secure a $3 billion loan from the IMF.
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, September 26, 2022, the Ghana Cedi is trading against the dollar at a buying price of 9.5366 and a selling price of 9.5462.
As compared to yesterday’s trading of a buying price of 9.2367 and a selling price of 9.2459. At a forex bureau in Accra, the dollar is being bought at a rate of 10.20 and sold at a rate of 10.42.
Against the Pound Sterling, the Cedi is trading at a buying price of 10.4083 and a selling price of 10.4216 as compared to Friday’s trading of a buying price of 10.3931 and a selling price of 10.4054.
At a forex bureau in Accra, the pound sterling is being bought at a rate of 11.45 and sold at a rate of 11.90.
The Euro is trading at a buying price of 9.2666 and a selling price of 9.2776 as compared to Friday’s trading of a buying price of 9.0675 and a selling price of 9.0766.
At a forex bureau in Accra, Euro is being bought at a rate of 10.00 and sold at a rate of 10.42.
The South African Rand is trading at a buying price of 0.5308 and a selling price of 0.5315 compared to Friday’s trading of a buying price of 0.5236 and a selling price of 0.5242.
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 45.5709 and a selling price of 45.7480 as compared to Friday’s trading of a buying price of 47.1211 and a selling price of 47.2044.
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.
John Awuah, the chief executive officer of the Ghana Association of Banks (GAB), has referred to the claim that local banks might profit from the difference between their respective lending rates by borrowing at the lower rate and then on-lending to the market at the higher rate as “impossible,” citing measures taken by the central bank to prevent such occurrences.
He made this statement in response to claims made by the Institute for Economic Affairs (IEA) in its commentary on the upcoming Monetary Policy Committee (MPC) of the Bank of Ghana (BoG), wherein it noted that arbitrage between the Monetary Policy Rate (MPR) on the one hand, and the Treasury Bill Rate (TBR) and the Ghana Reference Rate (GRR) on the other hand, presented an opportunity for “round tripping” – an unethical market-manipulation
Speaking to the B&FT prior to commencement of the Association’s 39th Annual General Meeting (AGM), Mr. Awauh, explained that the central bank vigorously assesses the activities of all banks, particularly those it lends to – making market manipulation near-impossible.
“The central bank is the lender of last resort, not just in word but in deeds. Banks are able to access funds from the Bank of Ghana only after they have exhausted all other options, including interbank lending. But much more importantly, before the BoG extends liquidity to any of the commercial banks it assesses the bank’s position in the market. If you are looking to borrow from the central bank and they see that in the secondary market you are aggressively purchasing government securities or quoting FX positions, there is no way such a bank would be able to access liquidity,” he elaborated.
But with the 91-day TBR and GRR hovering around the 30 percent (from 12.5 percent at the beginning of the year) and 26.5 percent marks respectively, and the MPR lagging by more than four percentage points at 22 percent, the IEA said the policy rate falling behind the TBR AND GRR represents a misalignment of yield curves and a distortion of money market returns.
“In fact, the situation gives room for ‘round tripping’ to the extent that commercial banks can borrow from the central bank at the cheaper (M)PR and on-lend to government at the higher TBR; or even to other borrowers in the market and profit from the transactions. Avoiding this undesirable behaviour requires a realignment of interest rates to eliminate the (M)PR-TBR and (M)PR-GRR gaps,” the public policy think-tank continued.
While a number of analysts, including the IEA, have stated that they expect the central bank to keep the MPR at 22 percent after its next meeting, the prevailing tight economic conditions could see government offer a higher rate for short-term securities.
The GRR, which was 13.9 percent at the turn of the year, could also inch up further; increasing the gap with the MPR.
According to financial writer Toma Imihere, arresting people who are involved in illegal foreign exchange trading is not a long-term solution to the cedi’s decline.
Recently, the Ghana Police Service and the Bank of Ghana carried out an operation in strategic areas of Accra with the goal of cracking down on illegal foreign exchange operations, also referred to as “black market” operators.
Tomi Imihere, who is based in Accra, told Citi News about the incident and expressed the opinion that the government should instead adopt a long-term approach to deal with the black-market activities.
“You can’t even keep this thing up. You have black markets all around the country. The police are understaffed and under-resourced. They have their murder cases facing them, their kidnapping cases facing them, so they tend to prioritise,” the financial journalist is quoted by Citinewsroom.com
As part of efforts to address the cedi depreciation, Tomi Imihere suggested that the Bank of Ghana liberalise the formal market which is often represented by forex bureaus operating in the country.
“So, there will be less incentives for people to go and store up dollars in the hope of making a profit or at least storing value. What the Bank of Ghana needs to do is ease the restrictions on the formal market, especially at the retail end. All you do is you take out criminal money… but apart from that, let everything go without question,” he explained.
Meanwhile, some 76 individuals and entities have been arrested and are expected to face prosecution after the BoG and Police found them to have been engaged in the buying and selling of foreign exchange without approval or license from the regulator.
The activities of ‘black market’ operators have been attributed as one of the major causes for the depreciation of the cedi against major trading currencies, especially the US dollar.
The local currency is currently selling above GH¢10 to US$1 on the retail echange market.
Market watchers are maintaining the forecast of weak near term growth, even though the Q2 economic results of 2022 exceeded projections.
Provisional gross domestic product (GDP) figures from the Ghana Statistical Service (GSS) showed an oil and gas growth of 4.8 percent for the second quarter of 2022; an increase from the slowdown logged during the first quarter of 2022 at 3.4 percent.
This is despite an escalating macroeconomic crisis brought on by rising inflation, a sharp depreciation of the cedi against the US dollar, and a tight monetary policy environment that has elevated borrowing costs.
The Bank of Ghana increased its benchmark rate by a total of 750 basis points to 22 percent in order to combat inflation and re-anchor expectations.
Thus, Constant Capital – a broker-dealer – cautions that although it might take time, the economy will certainly feel effects of the central bank’s hawkish monetary stance more strongly in the upcoming quarters.
“While the impact may be lagged, we expect monetary tightening on the economy to be more impactful within the coming quarters. Elevated inflation, currently sitting 3.4x outside the BoG’s upper target limit at 33.9 percent, will also weigh on growth,” the broker-dealer said.
Ghana’s growth is largely expected to be impacted by a number of additional factors, including depreciation as well as extraneous global factors like the protracted Russia-Ukraine war, global supply chain bottlenecks, volatile commodity prices, inflation, hawkish policy stances by major central banks and US recession risks.
However, Constant Capital noted that the growth outturn in Q2-2022 suggests that the revised government growth projection of 3.7 percent in 2022 might actually be feasible.
Commenting on the outlook, Apakan Securities – a market watcher – also affirmed the economy’s impressive Q2-2022 performance amid the worsened macroeconomic environment.
“The 4.8 percent y/y growth rate recorded for the Ghanaian economy in Q2-2022 amid a worsened macroeconomic environment for this year reflects an impressive performance contrary to projections. Nonetheless, we think Ghana’s economic growth prospect will be tilted toward the downside, considering the amplified macroeconomic risks in the economy,” it stated.
Moreover, the latest S&P Global Ghana PMI for Aug-2022 came in at 45.9, down from 48.80 in Jul-2022; and remained below the 50.0 neutral mark, signifying a continuous decline in private sector activity.
Q2 sectoral Performance
Despite growing by 4.6 percent year over year in Q2 2022, the agricultural sector experienced slower growth than in Q1 2022 when it grew by 5.7 percent, and in the same period last year when it grew by 11.87 percent. This may be related to the rising price of fertiliser and supply limitations brought on by the conflict between Russia and Ukraine.
Following a string of quarterly contractions in the previous year, the industrial sector has continued to demonstrate a strong recovery. The sector experienced a turnaround from a 6.35 percent y/y contraction in the same period last year, growing by 4.6 percent y/y in Q2 2022 after growing by 1.3 percent y/y in Q1 2022. The two largest sub-sectors – manufacturing, mining and quarrying – both performed well and supporting the industrial sector’s strong recovery.
The mining and quarrying sector grew by 4.4 percent y/y in Q2-2022 from a growth rate of 0.6 percent y/y in Q1-2022, while the manufacturing sector was the fastest-growing with an 8.8 percent y/y growth rate. However, in Q2 2022 the water supply and sewage sub-sectors decreased by 2.7 percent y/y and 2.2 percent y/y respectively, for the first time in five (5) consecutive quarters.
The second quarter of the year saw robust activity in the services sector, with growth of 5.2 percent year over year (y/y) from Q1 2022’s growth of 3.7 percent. The sub-sectors of education, health & social work, and information and communication all contributed to this growth.
The Bank of Ghana’s (BoG) Monetary Policy Committee (MPC) will not be holding its routine quarterly meeting today, Monday, September 26, 2022, as scheduled.
A statement from the Central Bank last Thursday said the rescheduled meeting will now coincide with Government’s next round of engagements with the International Monetary Fund(IMF).
The Fund is scheduled to begin these rounds from September 26 to October 7, on Government’s policies and reforms that could be supported by its lending arrangement.
The team, which will be led by its Mission Chief for Ghana, Stephane Roudet, is also expected to further engage with other stakeholders in the course of the visit.
Following the development, the Monetary Policy Committee says it will announce the next monetary policies on October 7, the day the engagements with the IMF will be concluded.
The last IMF mission to Ghana was between July 6 and July 13, 2022. The team used the opportunity to assess Ghana’s economic situation and discussed the broad lines of the government’s Enhanced Domestic Program that could be supported by an IMF lending arrangement.
The IMF team met with Vice President Bawumia, Finance Minister Ofori-Atta, and the Governor of the Bank of Ghana.
The team also met with the Parliament’s Finance Committee, civil society organizations, and development partners, including UNICEF and the World Bank, to engage on social spending.
Ghana is currently looking to secure a $3 billion loan from the IMF.
Gold-producing member companies of the Ghana Chamber of Mines will, between now and December 2022, sell about 125,000 ounces of gold to the Bank of Ghana (BoG) under the central bank’s Domestic Gold Purchase Programme.
The decision followed a meeting between Vice President Alhaji Dr Mahamudu Bawumia, some other members of the Economic Management Team, the Bank of Ghana, the Ministry of Lands and Natural Resources, Minerals Commission, PMMC as well as the leadership of the Chamber to consider the implementation of the BoG’s Gold Purchase Programme in the light of the country’s economic challenges.
Ahead of that meeting, Newmont Ghana had already sold 3,500 ounces of gold to the Bank of Ghana as part of the programme.
Vice President Dr. Bawumia noted after the meeting that “it was agreed that to help shore up the foreign exchange reserves of the Bank of Ghana, starting September 1st, the Bank of Ghana will purchase a portion of the output of the gold mining companies on a continuous basis at world market prices, but payment will be made in Ghana cedis”.
This will represent a significant and sustainable addition to Ghana’s foreign exchange reserves over time and strengthen the country’s balance of payments position”, H.E. the Vice President added.
President of the Chamber, Joshua Mortoti stated that “as good corporate citizens the Chamber supports the programme”. Noting that the Gold Purchase Programme will be mutually beneficial to all stakeholders.
On his part, the Chief Executive Officer of the Chamber, Dr. Sulemanu Koney, stated that members of the Chamber would further engage the Central Bank to fast-track the implementation of the programme.
Discussions on the Gold Purchase Programme started in 2020 between the BoG and gold-producing member companies of the Chamber to support Ghana’s foreign exchange reserves.
The Ghana Chamber of Mines is the main minerals industry association in Ghana. The Chamber represents the collective interests of companies involved in mineral exploration, production and processing in Ghana.
The Bank of Ghana has reiterated its caution to institutions that do not have permission to price in foreign currencies to desist from engaging in such transactions.
According to the Central Bank, it is illegal for companies, particularly those in the hospitality and the real estate sectors, to quote their offerings in foreign currencies, and will thus not hesitate to punish them.
Speaking to the media, the Head of Other Financial Institutions Supervision Department, Yaw Sarpong, said it will step up its monitoring activities to address the challenge.
“As I indicated earlier, the pricing in dollars, other currencies by institutions is engaging our attention and we have teams out there that identify some of these institutions for us to deal with them. I want to re-echo that it is illegal to price or advertise foreign currency unless you have permission from Bank of Ghanato do that”.
“There are a few institutions in the country that by the nature of their operations have been able to secure exceptions, other than that it is illegal to do that.
Mr. Sarpong further said the Bank of Ghana will step up its monitoring activities to make sure that recalcitrant firms’ pricing in dollars are punished.
He, however, encouraged the general public to inform the Central Bank of any institution quoting its services in dollars.
“The ones that come to our attention, we will deal with them, but we need everybody on board, the media. So if anybody comes to your station wanting to advertise in dollars, you have to let the person know that this is illegal and you don’t want to be associated with it.”
“We have to let the advertising agencies know that and we have. I am sure that if we all collaborate we can deal with this situation”, Mr. Sarpong explained.
Adwoa Konadu Tortor, the head of the Foreign Exchange Bureau Examination Office, warned that doing so might result in an 18-month prison sentence, a fine from a court with the appropriate jurisdiction, or both.
On Rainbow Radio 87.5Fm’s Frontline, she stated that the Police are required to detain such individuals, present them in court, and bring charges against them.
Without a license, it is forbidden to conduct business in the foreign exchange market.
The police have the right to detain anyone who works in the market without a license because doing so is against the law.
If they are found guilty, they face a fine of 700 penalty units, 18 months in prison, or both when they are taken before a court of competent jurisdiction after being apprehended.
She appealed to the media, the general public and other stakeholders to support the BoG in clamping down on the illegal operations of unlicensed forex traders.
She told those breaking the law, “Stop it now!” Apply for a license if you want to trade currencies. “Do not hide in a small corner and operate illegally.”
Meanwhile, the police have arrested 76 people in Accra for allegedly engaging in the illegal trading of foreign currencies (forex), particularly US dollars.
The suspects were apprehended last Tuesday by a special team from the Ghana Police Service (GPS) and the Bank of Ghana (BoG) for illegally selling and buying the CFA Franc, euro, and British pound, among other currencies, in Accra’s Central Business District (CBD).
They were apprehended in Rawlings Park, Tudu, Cowlane, the Kwame Nkrumah Circle, Kinbu, Timber Market, and Lava and have since been placed in police custody to assist with the investigation leading to their prosecution.
To “enable the decision on the policy rate to benefit from the broader talks to be held over the period,” it has been decided to reschedule the meeting to fall on the same day as the IMF mission’s conclusion.
The Bank of Ghana provided this information in a press release on September 22, 2022.
The Bank of Ghana’s Monetary Policy Committee (MPC) was scheduled to hold its 108th regular meeting from Monday, September 20, 2022, to Friday, September 23, 2022, to discuss economic developments.
The meeting was expected to conclude with a press conference on Monday, September 26, 2022, to announce the committee’s decision.
But the BoG has said, “a decision on the stance of monetary policy will be announced on October 7, 2022.”
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.
On the Interbank forex rates from the Bank of Ghana today, September 23, 2022, the Ghana Cedi is trading against the dollar at a buying price of 9.2367 and a selling price of 9.2459.
As compared to yesterday’s trading of a buying price of 9.0355 and a selling price of 9.0445. At a forex bureau in Accra, the dollar is being bought at a rate of 10.15 and sold at a rate of 10.45.
Against the Pound Sterling, the Cedi is trading at a buying price of 10.3931 and a selling price of 10.4054 as compared to yesterday’s trading of a buying price of 10.3086 and a selling price of 10.3198.
At a forex bureau in Accra, the pound sterling is being bought at a rate of 11.20 and sold at a rate of 11.90.
The Euro is trading at a buying price of 9.0675 and a selling price of 9.0766 as compared to yesterday’s trading of a buying price of 9.0268 and a selling price of 9.0366.
At a forex bureau in Accra, Euro is being bought at a rate of 10.05 and sold at a rate of 10.42.
The South African Rand is trading at a buying price of 0.5236 and a selling price of 0.5242 compared to yesterday’s trading of a buying price of 0.5098 and a selling price of 0.5103.
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 47.1211 and a selling price of 47.2044 as compared to yesterday’s trading of a buying price of 48.0951 and a selling price of 48.2279.
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.
A joint team of Bank of Ghana(BoG) officials and the Ghana Police Service has arrested 76 suspected illegal black market operators in a special operation within the Central Business District.
The suspected operators of the foreign exchange (forex) parallel market were apprehended at various hotspots, including Rawlings Park, Tudu, Cowlane, Circle, Kinbu, Timber Market and Lava.
This special operation was part of the Bank’s overall strategy of sanitising the foreign exchange market to ensure compliance with Ghana’s foreign exchange laws and regulations.
The Police would prosecute the apprehended persons, and the BoG urged the public to avoid patronising the services of underground-economy operators and desist from engaging in foreign exchange business without a license.
“The general public must always trade with the Bank of Ghana licensed forex bureau,” a briefing note for the said.
According to Section 3(1) of the Foreign Exchange Act, 2006 (Act 723), “A person shall not engage in the business of dealing in foreign exchange without a license”.
Section 29 (1a) of the Act further states that “A person who engages in the business of dealing in foreign exchange without a licence commits an offence and is liable, on summary conviction, to a fine of not more than seven hundred penalty units or a term of imprisonment of not more than eighteen months, or both”.
The Bank further cautioned against pricing, advertising, paying, or receiving payment for goods and services in foreign currency in Ghana as the sole legal tender in Ghana is the Ghana Cedi and Ghana Pesewa.
“It is an offence punishable by law. Such violations are punishable, on summary conviction, by a fine of up to 700 penalty units or a prison term of not more than 18 months, or both” the statement read.
As part of complementary measures to ensure compliance with Ghana’s foreign exchange laws and regulations, the bank said it would enforce compliance of taking customer identification (Ghana card) and issuance of electronic receipt for every forex transaction.
It also intends to intensify public sensitisation and media engagements to educate the public on forex rules and regulations, including the need to avoid the illegal market.
“Members of the public are encouraged to report all foreign exchange violations.”
Over 70 people and businesses engaged in the business of purchasing and selling foreign currencies without a license from the top bank have been detained by Bank of Ghana employees working with the Ghana Police Service.
The action followed a specific operation the two organizations undertook on foreign exchange parallel market operators, also known as black market operators.
The perpetrators who were caught in Accra’s Central Business District, notably Rawlings Park, Makola, and Tudu, are expected to face prosecution.
The rapid depreciation of the local currency in comparison to the dollar and other important foreign currencies is attributed to the “Black Market” dealers.
Speaking to Citi News after the exercise, Head of Forex Exchange Bureau at the Bank of Ghana, Adjoa Konadu Torto, noted that the move is part of measures to check the free fall of the local currency.
“This special operation was part of the Bank’s overall strategy to sanitize the foreign exchange market. Other measures being put in place include enforcement of compliance from licensed foreign exchange bureaux particularly with the taking of customer identification (Ghana card) and issuance of electronic receipt for every forex transaction; intensified public sensitization and media engagements to educate the general public on forex rules and regulations, including the need to avoid the black market,” she said.
She indicated that the exercise will continue in other parts of the country in the coming days.
The Bank further issued a strong caution to the general public to desist from engaging in the services of foreign exchange businesses operating without a licence.
“The Bank cautions the general public to desist from engaging in foreign exchange business without a licence. Members of the public who patronise the activities of black market operators are equally guilty before the law. The general public must always trade with the Bank of Ghana licensed foreign exchange (forex) bureaux,” she noted.
The current rate of inflation for the month of August is 33.9%.
A statement by the IEA on September 19, 2022, said: “Countries around the world, including major economies, where inflation tends to be mostly demand-driven, and where demand-management approaches, such as IT, may be more appropriate tools, have resorted to interventions directed to the supply factors attendant to Covid-19 and the Russia-Ukraine war. The US has passed the Inflation Reduction Act.
“The new UK Prime Minister has imposed caps on energy prices for two years. France has capped fuel prices and limited electricity tariff increases to 4%. If these countries are taking these unorthodox and innovative measures to cushion their citizens, who are far richer than us, why can’t our policymakers be equally proactive?” he queried.
The IEA also noted that the Bank of Ghana’s IT framework for dealing with inflation has not been able to properly deal with the situation.
“We have repeatedly pointed out the inadequacy of the IT framework in dealing with these supply and cost drivers of inflation, especially at the primary level, although, we acknowledge its potential role in stemming second-round effects of these factors. The supply and cost factors should be directly targeted with appropriate policy interventions,” it mentioned.
On day two of the Ghana Canadian Diaspora Investment Summit in Toronto, Canada, which was organized by the Ghana Investment Promotion Centre (GIPC) to strategically engage the Ghanaian Diaspora in order to attract their long-term investments and partnerships for Ghana’s development, she gave the keynote address.
“Grow in Ghana, grow with Ghana” was the summit’s slogan.
Since June 2018, the Bank of Ghana has published a circular outlining the legal status of cryptocurrencies in Ghana, warning all financial institutions from engaging in cryptocurrency transactions and advising the general people to steer clear of any crypto platforms.
Meanwhile, the BoG is currently piloting its own central bank digital currency (CDBC) called the eCedi which, unlike cryptocurrency that is not backed by any currency or central bank, is backed by Ghana’s cedi and BoG, and can be trusted to be more stable.
But Ursula Owusu-Ekuful noted that whereas it is good for the Bank of Ghana to be piloting the eCedi, which is backed by the Ghanaian cedi, it is also important to acknowledge that cryptocurrency, which is deemed illegal in Ghana and many other countries, is happening and fast gaining legitimacy, so “we can no longer sit on the fence”.
The minister compared crypto today to VoIP (voice over Internet protocol) like WhatsApp call, Facebook call, Telegram call and others in the past, saying that VoIP used to be illegal, and several steps were taken to clamp down on operators that allowed it then, but today it is the norm.
“In the same vein, cryptocurrencies that are now illegal may very well become the norm many years down the line,” she said.
The minister’s call is no different from what the Chairman of Ghana.com, Professor Nii Narku Quaynor, said not long ago that Ghanaian regulators are dragging their feet on cryptocurrency like they did when he (Dr. Quaynor) first brought the internet to Ghana.
According to him, he virtually had to beg regulators to set out regulations for the internet so that Ghana could be the internet access hub for the whole of Africa, but they sat by and allowed foreigners to take over the space and spread across Africa before they finally designed regulations for him.
Dr. Quaynor, who is currently championing blockchain technology in Ghana, therefore called on the Bank of Ghana to stop restricting financial sector operators from transacting in crypto, and rather use regulatory innovation to position Ghana to benefit fully from the global blockchain revolution and its attendant technologies like crypto, DeFi (decentralised finance), NFTs (non-fungible token) and others.
It is worth noting that BoG has recently started Regulatory and Innovation Sandbox, which allows innovations around blockchain to be tested within that controlled environment.
Fintech
Ursula Owusu-Ekuful, however, lauded the central bank for creating the enabling environment through legislation for Ghana to now have one of the most dynamic financial technology (Fintech) industries on the continent, with 71 licensed players creating loads of jobs and also driving financial inclusion through innovation.
She noted that the Fintech industry has made payments at all levels very convenient, safe, transparent, and brought accountability to simple stuff like religious (church offerings) and social (funeral) contribution because funds given for such purposes could easily be tracked.
Continental payment cards
According to her, the talent and innovations in the Fintech industry clearly shows that there is no reason why Africans should keep using international payment cards like Visa and Mastercard and keep paying steep fees of up to 3.5 percent of the amount transacted, which end in foreign banks.
“Why can’t we develop our own local and continental cards and reduce the fees for our people and also keep all of that money within the continent to finance our development,” she asked.
“We have done it with mobile money, and I believe we can do it with payment and credit cards,” she said.
The minister believes even that need presents huge investment opportunities for Ghanaians in the diaspora to collaborate with the players in the Ghanaian Fintech industry to create such solutions for the continent.
COVID-19
According to her, COVID-19 gave rise to the adoption of digital technology in Ghana, and that became the silver lining for the country in the midst of the devastating impact of the pandemic.
She noted that Ghanaians were able to transition to digital platforms much easier and quicker because government had, since 2017, started implementing its digital transformation agenda which came in handy when COVID hit hard.
Ursula Owusu mentioned the paperless port system, digital address system, Ghana Card, mobile money interoperability, Ghana.gov, GhanPay, GHQR, e-procurement portal, e-justice system, smart workplace, drones for medical delivery and many others, all geared toward making government run more efficiently with less human intervention, reduced corruption and improved revenue collection.
She said government has since rolled out several digital technology interventions in education, health, agriculture and other areas to sustain the high digital adoption level among citizens and its attendant exponential growth in Internet usage.
According to her, government also gave out free spectrum to Vodafone and MTN to expand their capacities and effectively cater for the congestion that resulted from the boost in data consumption, adding that operators with 2G licenses were also allowed to deploy 3G technologies in unserved and underserved area without any additional licensing fees to allow easy access to high-speed data connectivity across the country.
Ghana Cares
She touched on the Ghana Cares Obatampa programme, saying it was designed to stabilise, revitalise and to create jobs and prosperity for Ghanaians over a three-year period in the post pandemic era.
Ursula Owusu-Ekuful told summit participants that the Ghana Cares programme is in two phases – a stabilisation phase that ran to the end of July 2020, and a revitalisation phase which is runs from 2021 to 2023.
“The first phase focused on stabilization of the economy, including food security, supporting buisnesses and workers, strengthen the health system, and passage of legislation to facilitate quick economic recovery.
“The second phase will focus on supporting commercial farming, and attracting educated youth into agriculture, building Ghana’s night manufacturing sector, developing engineering machine tools and ICT digital economy, developing Ghana’s housing and construction companies, and renewing and optimising the implementation of government flagships and key programmes…” she stated.
She said government is confident that the phase two programmes will move Ghana into the industrialisation and manufacturing phase, which then presents lots of investment opportunities for Ghanaians in the diaspora to form partnerships with both foreign and local businesses and take advantage of them.
The minister particularly laid out some investment opportunities in the technology sector that she believes Ghanaians in the diaspora can collaborate with locals and take advantage of.
AfCFTA Hub
In reference to the AfCFTA Hub, she said Ghanaians in the diaspora can create business hubs and connect with the recently launched AfCFTA Hub in Ghana so they could have easy access to SME producers and suppliers, as well as financiers and regulators in a one-stop shop situation.
According to her, such businesses can gain access to even more opportunities through the hub to the rest of Africa, and even make and receive payments in all currencies on the hub.
Ursula Owusu-Ekuful was also quick to diffuse the notion that the Ghanaian Government favours Chinese companies like Huawei and ZTE when it comes to investment in the tech sector, saying that the Chinese usually offer cost-effective solution, but there are still numerous opportunities that remain untapped in the sectors.
Canadian exports to Ghana have grown by 8.97 percent annual from US$23.8million in 1995 to US$372million currently, while Ghana is doing around US$100million worth of exports to Canada, and the minister said this provides the opportunity for Ghanaians at home and in the diaspora to partner and do more to bridge that gap.
The Institute stated that specific inflation-causing variables should be targeted in a statement on September 19, 2022.
“The cost and supply issues, especially those relating to food, fuel, transportation, and the exchange rate, are a major contributor to the current inflation.
Breaking down the 33.9% headline inflation for August into its component parts shows the effects of these factors: “Diesel inflation was 116.9%; petrol inflation, 80.5%; transport inflation, which includes fuel costs, was 45.7%; imported inflation, which reflects the effect of the exchange rate, was 35.2%; and food inflation, 34.4%.
The IEA stated that among measures that can be adopted to reduce inflation, these four should be looked at by the government.
1. Regarding food, we call for reinforcement of measures to ensure that food stocks are easily transported from farm gates to markets. We call for subsidies on basic staples like maize, rice, cooking oil, and bread.
2. With regard to fuel, we advocate for the elimination of some fuel taxes and levies as well as the use of a portion of the government’s windfall profits from rising oil prices to reduce the cost of gasoline at the pump.
3. In terms of transportation, we demand the development of public transportation and the subsidization of fare prices to assist the general population.
4. With regard to the exchange rate, we urge the Bank of Ghana to implement foreign exchange legislation, such as those that deal with traveler carry-on baggage restrictions, forex trading, the pricing of products and services in forex, and bank-to-bank currency transfers.
In order to lessen pressure on the currency rate, we also urge the Bank to work with overseas businesses to stagger the repatriation of their earnings and profits.
This year’s third-quarter sales to authorized dealers were $270 million less than the sale, which is a component of the central bank’s Foreign Exchange Forward Auction.
However, it was noted that just $60 million would be up for auction in September 2022 to licensed foreign exchange traders.
The auction calendar further said there will be a bi-monthly sale of $60 million each in October 2022, November 2022 and December 2022 respectively.
It is expected that the improved auction sale will boost US dollar supply in circulation and address the depreciation of Ghana cedi against major trading currencies, especially the US Dollar.
Meanwhile, the BoG said in accordance with the Foreign Exchange Forward Auction Guidelines, bids are invited as per the prescribed format to purchase United States dollars against Ghana cedis, separately on each auction date.
The central bank announced that it will also post a quarterly auction schedule for the foreign exchange forward auction on its website.
The Competitive Multiple-priced Foreign Exchange Forward Auction will follow the standards published on the Bank of Ghana website for central banks.
Mrs. Clarrisa Kudowor, a Deputy Director at the Bank of Ghana (BoG), has urged business sector participants to work with the central bank to lessen the effects of COVID-19 on women-owned firms.
The Bank supports an inclusive and robust financial system and economy since it benefits the entire country and encourages shared growth among all stakeholders.
Mr Kuwodor made this call at a National Policy Dialogue organised by the Network for Women’s Rights in Ghana (NETRIGHT) in partnership with Graca Machel Trust in Accra.
The event was on the theme, “Women’s Leadership for Financial inclusion and Economic Recovery.”
Other challenges are that the Covid-19 pandemic slowed down progress and reinforced pre-existing gender inequalities.
It also compounded structural and systemic barriers that made it difficult for women to easily access economic resources.
These were because a higher percentage of women were in the informal sector and MSMEs, as compared to men, she said, adding that many women businesses had still not ‘resurrected’ from the effect of Covid-19.
Mrs Kumawor observed that the Government’s Covid-19 Alleviation and Revitalisation of Entreprises programme introduced to support MSMEs affected by the Covid-19 benefitted more men than women, as it was not gender specific and created gaps in accessing loans.
She advised women in business to leverage opportunities in the digital economy to grow their businesses.
Mrs Patricia Blankson Akakpo, the Programme Manager, NETRIGHT, said that the economic hardship hit by the pandemic were those where women were mostly found.
She said Africa’s Agenda 2063 and the Sustainable Development Goals (Agenda 2030) prioritised gender equality and built inclusive economics.
For the continents to realise these goals, she noted, women needed to be among the decision-makers and collective action from local to national, regional to global level.
Ms Cyntia Sunu, Project Coordinator, NETRIGHT, said the three-year project was expected to support women’s leadership for digital financial inclusion in the various economic recovery strategies in Africa.
It was designed to target the adoption by governments and multi-sectoral stakeholders in targeted African nations of a gender transformative financial inclusion and economic recovery framework.
In addition to increasing political support, strengthening women’s leadership in financial inclusion, and enhancing the institutional capacity of GMT women’s networks in implementation countries, she claimed that the initiative would enable a greater representation of women in the COVID-19 economic recovery response task forces.
According to Ms. Sunu, the project would also aid in the development and institutionalization of a group of African women leaders who would act as expert women leaders and network leaders, influencing policy decisions that supported women’s financial inclusion as a means of promoting inclusive economic recovery in Africa.
He claims that the Central Bank has started assisting with some steps meant to alleviate the ongoing economic issues that have led to a high cost of living.
“In Ghana, we are addressing the problems in the setting of a very constrained or constrained budget.”
The Central Bank is attempting to manage inflation through monetary policy. To address the issue, there have been several interest rate rises, according to Dr. Bawumia.
Prof. Kobina Annim, a government statistician, claimed that the high costs of fuels, housing, water, electricity, and other commodities were the main causes of the inflation spike.
Since then, the development has raised concerns that it will take longer to alleviate inflationary pressures.
Ghana agreed to approach the IMF for an economic support program in July of this year. Once an agreement is achieved, access to the program is anticipated in 2023.
Dr. Joseph France, the BoG’s Head of Financial Stability, asserts that it is improper for companies to charge customers in dollars without the central bank’s approval.
However, according to Dr. Joseph France, some businesses have been given permission by the central bank to deal in foreign exchange since they generate positive foreign exchange earnings.
Among other businesses permitted to charge their goods and services in dollars are; oil and gas companies, mining companies and some hotels.
Speaking on JoyNews’ PM Express, he said, “when you go to the oil and gas companies, I mean, net foreign exchange earners, they’re not licensed to deal but they’re permitted to deal in forex because they’re net forex earners, like the mining companies, the oil and gas companies. Some limited institutions like some limited hotels and so on are permitted to deal in forex. It’s not everybody who is supposed to deal in forex for which you advertise. So when these things come to our attention, we go after such persons to make sure that they stop.”
Therefore, we want the public to report anyone who is pricing in dollars because doing so is actually illegal.
That is what the foreign exchange legislation does. As a result, you report to us, and we report to the security authorities, or notify the person to the security agencies, and they will stop them,” he said.
He emphasized that for there to be financial sanity, the public must report companies that charge in dollars to the Bank of Ghana or security forces so that these offenders’ conduct can be immediately put to an end.
Prior to Ghana’s Fund-supported program, the new Mission Chief was in the nation to interact with various government agencies and other important players.
First Deputy Governor of the Bank of Ghana, Dr. Maxwell Opoku-Afari, and Directors of the Bank’s Research, Financial Markets, Financial Stability, and Banking Supervision Departments made up Governor Addison’s team.
That of the 182-bill traded at 30.22 per cent, compared with 29.94 per cent the previous week. The one-year bill however sold for 30.01 per cent, as against 29.5 per cent the previous week.
As usual, the 91-day T-bill was the most purchased, as investors bought a total of ¢1.448 billion. This was followed by the 182-day (¢218.66 million) and the 364-day bill (¢109.41 million).
Also, all the bids tendered were accepted.
Data bank Research had reported that investor interest in Treasury bills continue to soar, as they take advantage of rising interest rates in the Treasury market.
This has been triggered by rising interest rates on the yield curve as investors focused on the short-term securities in the primary market for re-pricing benefits.
