As compared to yesterday’s trading of a buying price of 9.2954 and a selling price of 9.3047. At a forex bureau in Accra, the dollar is being bought at a rate of 9.00 and sold at a rate of 10.50.
Against the Pound Sterling, the Cedi is trading at a buying price of 9.8009 and a selling price of 9.8115 as compared to yesterday’s trading of a buying price of 11.5225 and a selling price of 11.5359.
The Euro is trading at a buying price of 8.5292 and a selling price of 8.5370 as compared to yesterday’s trading of a buying price of 9.8957 and a selling price of 9.9055.
At a forex bureau in Accra, Euro is being bought at a rate of 9.30 and sold at a rate of 11.50.
The South African Rand is trading at a buying price of 0.4582 and a selling price of 0.4585 as compared to yesterday’s trading of a buying price of 0.5402 and a selling price of 0.5407.
At a forex bureau in Accra, South African Rand is being bought at a rate of 0.45 and sold at a rate of 0.90.
The Nigerian Naira is trading at a buying price of 48.2430 and a selling price of 48.3204 as compared to yesterday’s trading at a buying price of 48.2430 and a selling price of 48.3204.
At a forex bureau in Accra, Nigerian Naira is being bought at a rate of 13.00 Naira for every 1 Cedi and sold at a rate of 18.00.
Director of Research at the Bank of Ghana, Dr. Philip Abradu-Otoo, has attributed the appreciation of the local currency to the monetary policy implemented by the Central Bank, a reduction in imports and Ghana’s deal with the International Monetary Fund (IMF).
Some experts believe the cedi will continue to enjoy some appreciation.
The Ghana Union of Traders Associations (GUTA) has applauded efforts of the fiscal and monetary authorities in the development, highlighting its predicted influence on the businesses of its members, given the cedi’s exceptional performance versus its key trading partners, particularly the US dollar.
The local currency had had a difficult year when compared to the US dollar, losing about 60% of its value by mid-November, when it was trading at just over GH15 for one US dollar.
However, over the course of the past week – following announcement of the domestic debt exchange programme terms, the staff-level agreement with the International Monetary Fund (IMF) and a sustained campaign by the Bank of Ghana (BoG) to sanitise the foreign exchange (FX) space – the cedi has been on an upward trajectory, closing trading on Wednesday, December 14, 2022 at GH¢9.3 = US$1, according to the BoG; almost halving the peak year-to-date depreciation.
Commenting on the welcome development, GUTA in a communique stated that it “wishes to appreciate the efforts being made by government and the Bank of Ghana to stabilise the cedi”.
“We urge government to continue with more efforts to sustain the programme and bring relief to the business community. We hope to see further and continuous appreciation of the cedi, and envisage that the economy will turn around in the shortest possible time,” added the statement signed by GUTA president Dr. Joseph Obeng.
Appeal to members
With the cedi’s rally expected to be maintained in the near-term, as US dollars hitherto hoarded by speculators begin to flood the market, the Association appealed for its members to make adjustments to retail prices.
“As the value of the cedi begins to appreciate, GUTA wishes to appeal for members of the business community to also adjust prices of goods and services accordingly so as to make the consuming public feel the impact of this positive trend,” GUTA said.
This comes as inflation for November accelerated to an almost three-decade high at 50.3 percent, beating market expectations.
BoG’s efforts
The central bank, in response to artificial depreciation of the cedi, undertook a number of measures to remedy the situation – some of which have come into effect, with others still being rolled out.
At the conclusion of an emergency meeting of its Monetary Policy Committee in August, the BoG announced that it was “working collaboratively with the mining firms, international oil companies and their bankers to purchase all foreign exchange arising from the voluntary repatriation of export proceeds from mining, and oil and gas companies”.
In October, the apex bank met with directors of banks and the Association of Forex Bureau Operators – cautioning the latter to comply with the Forex Bureau Act and warning them to stop setting forward rates, which had led to rate speculation and unneeded market panic; both of which contributed to the local currency’s rapid fall.
This was followed by the revocation of the licences of two forex bureaus in Accra for breaching provisions in the Forex Bureau Act as well as the arrest of at least 70 illegal black market FX operators.
Following President Nana Addo Dankwa Akufo-Addo’s address to the nation, the Bank, in November, announced that it will no longer provide forex support for the import of some commodities, primarily rice, poultry, vegetable oils, toothpicks, pasta, fruit juice, bottled water, and ceramic tiles.
When hiring, you must practice Know Your Employee, he stated (KYE ). Understand the candidate you are hiring.
Make sure to confirm their credentials, and inquire about any criminal histories with the police’s Criminal Investigations Department.
Employers are required to cross-check prospective hires against this database maintained by the Bank of Ghana in order to prevent criminals from being recycled.
“…When you are employing, you have to do Know Your Employee (KYE ). Know the person you are recruiting. Make sure you do a verification of their qualifications; check from the police Criminal Investigations Department about any criminal record…The Bank of Ghana also has a database of persons that may have caused certain fraud in banks — employers must crosscheck potential employees against this database to ensure criminals are not recycled,” Mr George Nkrumah, who heads the Financial Integrity Office of the Bank of Ghana advised at the start of a workshop put together by the central bank and the Committee for Cooperation between the Law enforcement and Banking Community (COCLAB).
Mr Nkrumah reminded banks to take employee background verification seriously so as to pre-empt the rising number of employee fraud among bankers.
His comment comes after commercial banks last year lost nearly GHc20 million to employee-related fraud.
According to the 2018 Bank of Ghana report, commercial banks lost about GHC 20 million to fraud carried out mainly by their own employees.
In per cent terms, employee fraud cases rose by 50% in 2018 with respect to 2017 with employee-related rising by 78%.
The bank of Ghana has therefore advised that Know Your Employee (KYE) be carried out thoroughly.
As compared to yesterday’s trading of a buying price of 11.4943 and a selling price of 11.5058. At a forex bureau in Accra, the dollar is being bought at a rate of 10.00 and sold at a rate of 11.00.
Against the Pound Sterling, the Cedi is trading at a buying price of 12.8937 and a selling price of 12.9087 as compared to yesterday’s trading of a buying price of 14.1264 and a selling price of 14.1417.
The Euro is trading at a buying price of 11.0619 and a selling price of 11.0728 as compared to yesterday’s trading of a buying price of 12.1319 and a selling price of 12.1440.
At a forex bureau in Accra, Euro is being bought at a rate of 11.30 and sold at a rate of 12.20.
The South African Rand is trading at a buying price of 0.6000 and a selling price of 0.6005 as compared to yesterday’s trading of a buying price of 0.6540 and a selling price of 0.6546.
The Nigerian Naira is trading at a buying price of 42.7500 and a selling price of 42.8452 as compared to yesterday’s trading at a buying price of 38.5774 and a selling price of 38.7487.
At a forex bureau in Accra, Nigerian Naira is being bought at a rate of 15.00 Naira for every 1 Cedi and sold at a rate of 19.00.
According to GhanaWeb Business sources, the briefing would reveal a specific resolution to months of negotiations as the government looks to the IMF for a bailout program.
The IMF Mission Team, which recently visited the nation, is anticipated to report that it and the Ghanaian government have reached a staff-level agreement for a fund program.
Prior to the announcement, the sources emphasized that there were still a few important issues that needed to be “ironed out” before today’s formal announcement. This was as of yesterday [December 12].
The Stephane Roudet-led IMF team has been in town since December 1, with the main mission of following up on engagements with government on its Economic Recovery Program.
“Given the situation, the bank authorized the creation of a commemorative coin and offered to help with the acquisition of the coin via the proper channels.
The gold coin will have no monetary value, which means it won’t serve as legal tender or a medium of exchange, he said.
The governor of the Bank of Ghana added: “As a result, the commemorative coin is not expected to display any face value to avoid the risk of being confused with legal tender in circulation. Your Royal Majesty In recognition of the invaluable role and your remarkable achievements, the preservation of peace in the safeguarding of life, the development of Ghana, and ensuring the peaceful coexistence of the citizenry of Ghana, the Bank of Ghana proudly associate itself with the launch of this commemorative gold coin to climax your Majesty’s 20th year as the Asantehene.”
Read the full story originally published on December 13, 2021, by GhanaWeb
A commemorative gold coin has been launched in honour of Otumfuo Osei Tutu II
According to him, the Bank of Ghana has been following Otumfuo’s exploits since he was enstooled as the Asantehene over two decades ago.
Dr Ernest Addison explained at the launch of the gold coin in Kumasi on Sunday, December 12, that, “the Bank of Ghana has followed with keen interest the painstaking effort of his Majesty in the mediation of peace in Dagbon and also in ensuring a peaceful transition of power from different political administrations over the past twenty years.
“Under the circumstances, the bank approved the issuance of a commemorative coin and offered to assist to procure the coin through appropriate channels. The gold coin will be of no monetary value, by that we mean it will not be a medium of exchange and not exactly a legal tender.”
The governor of the Bank of Ghana added: “As a result, the commemorative coin is not expected to display any face value to avoid the risk of being confused with legal tender in circulation. Your Royal Majesty In recognition of the invaluable role and your remarkable achievements, preservation of peace in the safeguarding of life, the development of Ghana and ensuring peaceful coexistence of the citizenry of Ghana, the Bank of Ghana proudly associate itself with the launch of this commemorative gold coin to climax your Majesty’s 20th year as the Asantehene.”
About the commemorative gold coin
Otumfuo Osei Tutu II, on Sunday, December 12, 2021, launched the 24-carat commemorative gold coins as part of celebrating 22 years of his contribution to the peace, stability and development of Ghana.
The launch was under the authorization of the Central Bank, the Bank of Ghana, for Gold Coast Refinery Limited to mint the commemorative gold coins to celebrate the Asantehene.
This is the first time in the history of this country that non-circulating commemorative coins meant to celebrate and honour people, places, events and institutions are being issued.
The commemorative gold coin was issued at the Manhyia Palace in Kumasi, Sunday marked the last celebration of the Akwasidae festival. The auction of the gold coins will be used to establish a multi-purpose Cultural Resource Centre in Kumasi to promote activities related to traditional and customary conflict resolution in the country.
Key features of the commemorative gold coins
The coins are of 99.99 per cent assay at 24-carat fine gold, with a diameter of 37mm and weight of 31.104 grammes each. It is described by the organizers as the ‘treasured collectors articles’.
“The face of the gold coins bears the image of the Asantehene, with the Adinkra symbols ‘Bi Nka Bi’ and ‘Mpatapo’, which symbolise peace, harmony and reconciliation.
“The reverse bears an image of the Golden Stool (Sika Dwa),” a statement from the organisers said.
The Ministry of Finance, together with the International Monetary Fund (IMF) and the Bank of Ghana held a joint press conference today.
The three bodies informed Ghanaians of a staff-level agreement reached by the government and the Fund.
Ghana and the IMF have reached a new three-year arrangement under the Extended Credit Facility (ECF) of about $3 billion.
According to the Fund, the government’s strong reform programme aimed at restoring macroeconomic stability and debt sustainability while protecting the vulnerable, preserving financial stability, and laying the foundation for strong and inclusive recovery, was key in this decision.
As compared to yesterday’s trading of a buying price of 12.5517 and a selling price of 12.5643. At a forex bureau in Accra, the dollar is being bought at a rate of 12.10 and sold at a rate of 13.15.
Against the Pound Sterling, the Cedi is trading at a buying price of 14.1264 and a selling price of 14.1417 as compared to Friday’s trading of a buying price of 15.3872 and a selling price of 15.4038.
The Euro is trading at a buying price of 12.1319 and a selling price of 12.1440 as compared to yesterday’s trading of a buying price of 13.2192 and a selling price of 13.2324.
At a forex bureau in Accra, Euro is being bought at a rate of 12.70 and sold at a rate of 13.60.
The South African Rand is trading at a buying price of 0.6540 and a selling price of 0.6546 as compared to yesterday’s trading of a buying price of 0.7234 and a selling price of 0.7241.
The Nigerian Naira is trading at a buying price of 38.5774 and a selling price of 38.7487 as compared to yesterday’s trading at a buying price of 35.3767 and a selling price of 35.4993.
At a forex bureau in Accra, Nigerian Naira is being bought at a rate of 15.00 Naira for every 1 Cedi and sold at a rate of 19.00.
He added that the government’s declaration of a decrease in coupon payments amounts to a “haircut” and called it a disgrace to the Ghanaian people.
Togbe Afede XIV said in a 14-page opinion piece: “We are now faced with problems regarding debt sustainability and our capacity to find the fiscal room to fund urgent and important development demands.
“Now, the fears about Ghana defaulting on its debt repayment have effectively materialized with the announcement of a domestic Debt Exchange Programme. And we are making a mockery of ourselves talking ‘no haircuts’ when that is exactly the effect of reduction in promised coupon payments,” he said.
“These high-interest rates made it difficult for businesses to borrow to invest in the real sectors of the economy to achieve the value-addition we crave. It also perpetuated our import dependence, while making it difficult for local entrepreneurs to borrow, invest and increase local ownership of the economy,” he noted.
“Bank of Ghana officials have inadvertently frustrated the restructuring of the economy, which they themselves have identified as the solution to our balance of payments deficit and currency depreciation problems.”
“It is difficult to see how policy rate increases can fight cost-pushed inflation resulting from food or crude oil price increases or increased taxes on petroleum products. Sadly, even at the height of the COVID-19 pandemic, when income levels had fallen worldwide, and stimulus packages were being implemented everywhere to boost economic activity, BoG still ensured that we suffer under strangulating high-interest rates,” the economist added.
He asserts that the monetary policy regime of the nation is an aspect of economic policy that, in his opinion, has evaded scrutiny over time.
The Paramount Chief of the Asogli Traditional Area stated in an opinion piece that “the inability of monetary policy to fulfill its objectives and targets has been a key element of our challenges” on GhanaWeb.
“The arguments I made in 2003, 19 years ago, are still valid today. Bank of Ghana has indexed its policy rate to past inflation, a self-fulfilling prophesy, with predictable adverse consequences for inflation and the value of the cedi,” he noted.
He further raised concern over the current monetary policy rate of 27 percent which was recently announced by the Central Bank.
“By this dogmatic interest rate policy, BoG tried to keep its policy rate above year-on-year inflation. I am surprised that today they are happy to fix their policy rate at 27%, below the year-on-year inflation rate of 40.4%, when they have always argued for the opposite.”
“It is surprising that the economists at BoG still do not understand that the year-on-year inflation is a historical concept, and that, it is not past price changes that interest rates must seek to compensate for,” the economist added.
Sharing his view on how to address the disparity in the inflation rate and monetary policy rate, Togbe Afede called for an adjustment of expected inflation for adjusted seasonality.
“Expected inflation is what astute investors are interested in, much the same way they look at forward price-earnings (P/E) ratios as opposed to trailing P/E ratios in evaluating shares for investment purposes.”
“The Fisher effect, named after Irving Fisher, defines the link between inflation, nominal interest rate and real interest rate, and explains the tendency for interest rates to rise when expected inflation is high and fall when expected inflation is low. Thus, a fall in expected inflation, if the expected real interest rate is unchanged, should cause an equal fall in the nominal interest rate,” he explained.
The current economic challenges in Ghana have reached unprecedented levels as citizens, businesses and residents have been grappling to make ends meet in rather turbulent times.
Since the start of this year, the local currency has tumbled by over 50 percent to the US dollar, the cost of living on an upsurge, fuel price hikes, job losses, worker agitations, and general frustration among the Ghanaian populace has been brewing for months.
To support his claim, Togbe Afede XIV compared Ghana’s minimum salary to that of the United Kingdom, which is GBP9.50 per hour, or GBP76 for an 8-hour workday, whereas the wage in Ghana is GH14.88 per day, less than GBP1.
“These high interest rates made it difficult for businesses to borrow to invest in the real sectors of the economy to achieve the value-addition we crave. It also perpetuated our import dependence, while making it difficult for local entrepreneurs to borrow, invest and increase local ownership of the economy,” he noted.
He further accused the BoG officials of inadvertently frustrating efforts aimed at restructuring the Ghanaian economy.
“Bank of Ghana officials have inadvertently frustrated the restructuring of the economy, which they themselves have identified as the solution to our balance of payments deficit and currency depreciation problems.”
“It is difficult to see how policy rate increases can fight cost-pushed inflation resulting from food or crude oil price increases or increased taxes on petroleum products. Sadly, even at the height of the COVID-19 pandemic, when income levels had fallen world-wide, and stimulus packages were being implemented everywhere to boost economic activity, BoG still ensured that we suffer under strangulating high interest rates,” the economist added.
While indicating that Bank of Ghana’s monetary policy decisions have not helped in improving economic policy measures over the years, Togbe Afede XIV said it has succeeded in maintaining a growth-stifling ‘high inflation – high interest rate’ environment adding that “it has also created the most profitable banking sector in Africa, if not the world, all with disastrous consequences for the cedi.”
As compared to Friday’s trading of a buying price of 12.8886 and a selling price of 12.9014. At a forex bureau in Accra, the dollar is being bought at a rate of 12.60 and sold at a rate of 13.30.
Against the Pound Sterling, the Cedi is trading at a buying price of 15.3872 and a selling price of 15.4038 as compared to Friday’s trading of a buying price of 15.7343 and a selling price of 15.7527.
At a forex bureau in Accra, the pound sterling is being bought at a rate of 15.00 and sold at a rate of 16.30.
At a forex bureau in Accra, Euro is being bought at a rate of 12.80 and sold at a rate of 13.70.
The South African Rand is trading at a buying price of 0.7234 and a selling price of 0.7241 as compared to Friday’s trading of a buying price of 0.7527 and a selling price of 0.7533.
At a forex bureau in Accra, South African Rand is being bought at a rate of 0.45 and sold at a rate of 0.90.
On August 22, 2022, it issued a statement that read, “The Bank of Ghana has noted that certain unlicensed organisations are giving loans to Ghanaians in violation of the 2016 Banks and Specialized Deposit-Taking Institutions Act (Act 930).
These criminal organisations mostly use social media and mobile technologies in their operations.”
The Institute of Directors-Ghana(IoD-GH), in partnership with the Bank of Ghana (BoG) and other key stakeholders, is set to launch the newly created National Corporate Governance Code (NCGC).
The NCGC will serve as a unified national corporate governance reference for good corporate governance for all stakeholders in the country.
The launch event slated for Tuesday, December 13, 2022, at the Kempinski Hotel will see in attendance the President of the Republic, Nana Addo Dankwa Akufo-Addo, the Governor of the Bank of Ghana, Dr Ernest Addison, and the President of IoD-GH Rockson Dogbegah, among others.
The NCGC was developed through the setting up of a technical committee, made up of nominees from cross-sectoral stakeholder institutions, that engaged in a rigorous process of planning, developing and consulting relevant stakeholders to draft the Code.
Speaking ahead of the launch, the President of IoD-Gh Rockson Dogbegah stated that the project is to ensure that all critical stakeholders are actively involved in the development of the national corporate governance code for Ghana to ensure a high implementation culture.
He was also positive that the Code will accelerate Ghana’s economic growth and national development.
“The development of this comprehensive National Corporate Governance Code does not only set out the fundamental principles for the culture of good corporate governance for public and private organizations but it would also enhance Ghana’s global appeal as an investment destination in conformity with international best practices.
The Institute believes that the adoption of this Code will promote the best corporate governance practice in both the public and private sectors and hence, it must be embraced by all,” Mr. Rockson Dogbegah added.
Meanwhile, the event will feature the launch of the 3rd Edition of Directors Hand Book, the induction of new members into IoD-Ghana and the 5th IoD-GH Excellence Awards.
The award will recognise and celebrate the achievements of individuals and organisations that represent excellence in leadership, sound corporate governance practices and have also made significant contributions to the socio-economic development of Ghana.
Ghana’s newly introduced domestic debt exchange programme may have a considerable impact on about eight banks in the country, according to the Ghana Stock Exchange’s November 2022 fixed income market.
These financial institutions are said to be heavily exposed to Ghanaian government securities, particularly bonds.
The banks whose names have been withheld, according to the November 2022 Ghana Fixed Income Market report, collectively owned roughly 83.91% of the debt market share.
Per the reports, these eight banks (four international and four local) traded a sizable amount of bonds and bills on the bond market in the month of November 2022.
However, it has been projected that, depending on the size of their balance sheet, the debt exchange programme could have an impact on their liquidity situation.
Dept Restructuring Project
As part of its conditions to receive support from the International Monetary Fund (IMF), the Akufo-Addo government has introduced a debt restructuring programme to salvage Ghana’s dwindling economy.
Debt restructuring entails a government or institution refinancing its current debt commitments in order to avoid defaulting on its obligations or declaring bankruptcy.
Under the new programme, which took effect on Tuesday, December 1, 2022, domestic bondholders are required to exchange their current bonds for a new set of four bonds maturing in 2027, 2029, 2032, and 2037.
This means that bondholders will not be able to receive any interest in 2023.
According to the Finance Minister, the annual coupon on all of these new bonds will be set at 0% in 2023, 5% in 2024, and 10% from 2025 until maturity.
As compared to yesterday’s trading of a buying price of 12.8936 and a selling price of 12.9065. At a forex bureau in Accra, the dollar is being bought at a rate of 12.50 and sold at a rate of 13.30.
Against the Pound Sterling, the Cedi is trading at a buying price of 15.7343 and a selling price of 15.7527 as compared to yesterday’s trading of a buying price of 15.7404 and a selling price of 15.7588.
At a forex bureau in Accra, the pound sterling is being bought at a rate of 15.50 and sold at a rate of 16.30.
The Euro is trading at a buying price of 13.5512 and a selling price of 13.5659 as compared to yesterday’s trading of a buying price of 13.5565 and a selling price of 13.5711.
At a forex bureau in Accra, Euro is being bought at a rate of 12.70 and sold at a rate of 13.50.
The South African Rand is trading at a buying price of 0.7527 and a selling price of 0.7533 as compared to yesterday’s trading of a buying price of 0.7530 and a selling price of 0.7536.
The Nigerian Naira is trading at a buying price of 34.4242 and a selling price of 34.5335 as compared to yesterday’s trading at a buying price of 34.4109 and a selling price of 34.5202.
At a forex bureau in Accra, Nigerian Naira is being bought at a rate of 14.50 Naira for every 1 Cedi and sold at a rate of 19.00.
For the CFA, it is trading at a buying price of 47.7192 and a selling price of 47.7706.
At a forex bureau in Accra, CFA is being bought at a rate of 18.50 CFA for every 1 Cedi and sold at a rate of 23.50 CFA for every 1 Cedi.
Dr. Johnson Asiama, a former second deputy governor, and Raymond Amanfu, a former head of the banking supervision department, have both been charged with wilfully inflicting financial loss to the state, according to the charge sheet submitted to the High Court.
Also, Head of Treasury of the UT Bank, Catherine Johnson; former Chief Executive Officer of UT Bank, Prince Kofi Amoabeng; and Robert Kwesi Armah, General Manager of Corporate Banking of UT Bank and UT Holdings – the parent company of UT Bank, have been charged with various offenses such as dishonest appropriation of US$7million and other deposits of customers and fraudulent breach of trust, among other charges.
The trial judge is His Lordship Justice Bright Mensah, a Justice of the Court of Appeal, sitting as an additional High Court judge.
So far, the prosecution has called Eric Nana Nipah, the Receiver of UT Bank (in receivership), Stephen Afotey, Registrar of the High Court (Commercial Division) and Stephen Antwi-Assimeng, a former Chief Executive Officer (CEO) of the defunct UT Bank to testify on its behalf.
In his testimony, the first Prosecution Witness, Eric Nana Nipah, informed the Court that several investments placed by various companies such as, SSNIT SOS Fund, Forestry Commission, ECG Staff Fund, WAICA-Re and the National Communications Authority with UT Bank were moved out to UT Holdings without proper authorization.
The second Prosecution Witness, Mr. Afotey, testified that an amount of US$7 million was deposited with UT Bank on the instructions of the Court. However, this amount could not be traced when UT Bank was taken over by GCB Bank.
In November, the Court heard the testimony of the third Prosecution Witness, Stephen Antwi-Assimeng, the Chief Executive Officer of UT Bank at the time of the revocation of its license. He testified that UT Bank was already on liquidity support from BoG at the time he joined the bank.
Mr. Antwi-Assimeng intimated that UT Bank relied heavily on borrowing from BoG to deal with its liquidity challenges.
In his testimony, Mr. Antwi-Assimeng indicated that UT Bank established letters of credit in the total sum of GH¢141million for some customers of the bank and these letters of credit were maturing in May and July of 2016. He further informed the Court that the customers did not provide funds for the Letters of Credit and neither did UT Bank have liquidity on maturity.
Testifying further, Mr. Antwi-Assimeng stated that the bank had situations where a number of international lenders were calling in their loans because UT Bank had defaulted and some of the loans had reached maturity.
He testified further that UT Bank was experiencing an average of GH¢40million loss of customer deposits, one of the bank’s key sources of liquidity. This, according to him, resulted in acute liquidity shortage, with UT Bank forced to pay higher interest rates to attract new depositors.
Proceeding further, Mr. Antwi-Assimeng informed the Court that UT Bank, on application to BoG, received liquidity support of GH¢460million with the instruction not to use any part of the additional liquidity support for unapproved purposes. He also informed the Court that the bank also applied to BOG for an unsecured liquidity support of GH¢30million.
He explained that UT Bank applied for the unsecured liquidity support because it did not have adequate securities to provide collateral for this facility.
The matter has been adjourned for further hearing in mid-December this year.
Word circulating on social media today was that the Bank of Ghana has caught fire.
Reacting to the news, the Bank noted that what was misread as a fire outbreak was actually a routine fire drill (simulation exercise) to prepare staff for real-time fire situation.
The exercise was conducted in collaboration with the Ghana National Fire Service, the National Ambulance Service and the Ghana Police Service.
“As a public facility, routine fire drill is necessary for testing the efficiency and preparedness of the Bank’s safety systems to manage emergencies like fires, and inculcate in the staff of the Bank fire safety evacuation procedures,” the Bank added.
Meanwhile, the Bank of Ghana has warned against false reportage intended to create fear and panic in the country.
As compared to yesterday’s trading of a buying price of 13.0968 and a selling price of 13.1100. At a forex bureau in Accra, the dollar is being bought at a rate of 12.70 and sold at a rate of 13.60.
Against the Pound Sterling, the Cedi is trading at a buying price of 15.7404 and a selling price of 15.7588 as compared to yesterday’s trading of a buying price of 15.9926 and a selling price of 16.0112.
The Euro is trading at a buying price of 13.5565 and a selling price of 13.5711 as compared to yesterday’s trading of a buying price of 13.7974 and a selling price of 13.8123.
At a forex bureau in Accra, Euro is being bought at a rate of 12.70 and sold at a rate of 13.80.
The South African Rand is trading at a buying price of 0.7530 and a selling price of 0.7536 as compared to yesterday’s trading of a buying price of 0.7535 and a selling price of 0.7542.
At a forex bureau in Accra, South African Rand is being bought at a rate of 0.65 and sold at a rate of 1.10.
The Nigerian Naira is trading at a buying price of 34.4109 and a selling price of 34.5202 as compared to yesterday’s trading at a buying price of 33.8492 and a selling price of 33.9858.
As compared to yesterday’s trading of a buying price of 13.0973 and a selling price of 13.1105. At a forex bureau in Accra, the dollar is being bought at a rate of 13.35 and sold at a rate of 14.20.
Against the Pound Sterling, the Cedi is trading at a buying price of 15.9926 and a selling price of 16.0112 as compared to yesterday’s trading of a buying price of 15.6834 and a selling price of 15.6834.
At a forex bureau in Accra, the pound sterling is being bought at a rate of 16.10 and sold at a rate of 16.90.
The Euro is trading at a buying price of 13.7974 and a selling price of 13.8123 as compared to yesterday’s trading of a buying price of 13.7974 and a selling price of 13.8123.
At a forex bureau in Accra, Euro is being bought at a rate of 13.45 and sold at a rate of 14.00.
The South African Rand is trading at a buying price of 0.7535 and a selling price of 0.7542 as compared to yesterday’s trading of a buying price of 0.7535 and a selling price of 0.7542.
The Nigerian Naira is trading at a buying price of 33.8492 and a selling price of 33.9858 as compared to yesterday’s trading at a buying price of 33.8411 and a selling price of 33.9670.
At a forex bureau in Accra, Nigerian Naira is being bought at a rate of 16.00 Naira for every 1 Cedi and sold at a rate of 20.50.
For the CFA, it is trading at a buying price of 47.7192 and a selling price of 47.7706.
At a forex bureau in Accra, CFA is being bought at a rate of 18.50 CFA for every 1 Cedi and sold at a rate of 23.50 CFA for every 1 Cedi.
A new version of the GH1 coin with improved security measures has been introduced, according to the Bank of Ghana (BoG).
“The upgraded GH¢1 coin is bi-metallic with an outer gold and inner silver. The coin has a pronounced rough edge and incorporates a latent image, which appears in a rectangular form below the Scale of Justice at the back,” parts of a statement issued by the BoG read.
Ordinary, this announcement should be welcomed news to Ghanaians because it will help prevent fraud and help ensure that the country’s currency is secured.
But Ghanaians on social media are not taking the announcement of the new GH¢1 coin, which will be in circulation from Monday, December 12, 2022, well.
Some Tweeps have been questioning the time of the move by the BoG and the amount it might have cost the country, given the current economic hardships.
“Useless people, how much will this cost us huh? as for Nana Addo the least said about him the better,” one Twitter user wrote.
Some also said that the BOG should focus on stabilising the value of the Ghana cedi rather than issuing new currencies.
“Under Akufo Addo our currency has depreciated badly n he has introduced new denominations new features on our currency n wiping out some…what development paaa will this bring to the nation, of what benefit is this…Total waste,” another Ghanaian wrote.
The coins are anticipated to go into circulation starting on Monday, December 12, 2022, according to a statement released by the Central Bank on December 6, 2022.
The coin is similar to the current GH 1 coin in design, form, and pictures; the Scale of Justice is on the reverse and the Coat of Arms is on the front.
“The upgraded GH¢1 coin is bi-metallic with an outer gold and inner silver. The coin has a pronounced rough edge and incorporates a latent image, which appears in a rectangular form below the Scale of Justice at the back,” the BoG noted.
Meanwhile, the Central Bank said existing and upgraded GH¢1 coins will co-circulate until the existing coin is gradually withdrawn from the public domain.
The BoG however called on the public to accept the coins and use them for transactions.
According to an internal assessment, the government would typically lose somewhere around GH800 million if it had to pay all the taxes that the trotro or commercial transport companies are demanding.
Is all of this money lost? “No, that’s the solution,” he said.
“I really think we need to find a way – either it’s a fast-track court or whatever it is – to be able to really just focus on ensuring that people are brought to book; that for me is the biggest deterrent.
“We can put in place all the structures and so on, but if people are not punished for acts they committed there is no deterrent – and therefore they will get back to doing the same old thing.”
Read the full story originally published on November 5, 2019, by thebftonline
Even though the government through the Attorney-General has charged a former Chief Executive Officer (CEO) of the defunct Capital Bank, William Ato Essien, for his alleged role in the collapse of the bank and two others, Mr. Adu Boahen reckons stringent sanctions are needed to prevent a recurrence.
Speaking as one of the panelists at the closing of the 8th Ghana Economic Forum (GEF) in Accra, he stated: “I think one thing that has not worked well is the sanctions/punishments for those who perpetrated criminal acts; and that has been primarily because the courts have not worked as they should.
“I really think we need to find a way – either it’s a fast-track court or whatever it is – to be able to really just focus on ensuring that people are brought to book; that for me is the biggest deterrent.
“We can put in place all the structures and so on, but if people are not punished for acts they committed there is no deterrent – and therefore they will get back to doing the same old thing.”
He also suggested a credit rating system for banks, which will help with their interest rates and loans.
The Bank of Ghana (BoG) in 2017 embarked on a comprehensive reform agenda to strengthen the regulatory and supervisory framework for a more resilient banking sector.
A total of 16 universal banks which once operated in the country have been collapsed within two years as part of measures taken by the Bank of Ghana to cleanse the banking sector and make it more robust.
On her part, Elsie Awadzi – a Deputy Governor of the Bank of Ghana, emphasised that reforms undertaken by the central bank have made the banking sector better – and urged the banks to deploy more technology in their operations.
A senior partner at KPMG, Andrew Osei Akoto, commended the BoG for the “bold” measures it introduced into the banking sector, and added that it is time institutions are held to account in order to get the best of them to snowball into multinationals.
As compared to yesterday’s trading of a buying price of 13.0973 and a selling price of 13.1105. At a forex bureau in Accra, the dollar is being bought at a rate of 13.30 and sold at a rate of 14.20.
Against the Pound Sterling, the Cedi is trading at a buying price of 15.9926 and a selling price of 16.0112 as compared to yesterday’s trading of a buying price of 15.6834 and a selling price of 15.7004.
At a forex bureau in Accra, the pound sterling is being bought at a rate of 16.10 and sold at a rate of 16.90.
The Euro is trading at a buying price of 13.7974 and a selling price of 13.8123 as compared to yesterday’s trading of a buying price of 13.5751 and a selling price of 13.5875.
At a forex bureau in Accra, Euro is being bought at a rate of 13.35 and sold at a rate of 14.00.
The South African Rand is trading at a buying price of 0.7535 and a selling price of 0.7542 as compared to yesterday’s trading of a buying price of 0.7728 and a selling price of 0.7734.
The Nigerian Naira is trading at a buying price of 33.8411 and a selling price of 33.9670 as compared to yesterday’s trading at a buying price of 33.9146 and a selling price of 33.9459.
At a forex bureau in Accra, Nigerian Naira is being bought at a rate of 16.00 Naira for every 1 Cedi and sold at a rate of 20.50.
For the CFA, it is trading at a buying price of 47.7192 and a selling price of 47.7706.
At a forex bureau in Accra, CFA is being bought at a rate of 18.50 CFA for every 1 Cedi and sold at a rate of 23.50 CFA for every 1 Cedi.
According to him, practitioners must protect the system through transparency, fairness, and sound decision-making.
Speaking at the 2022 Governors Day in Accra, Benjamin Amenumey said the CIB will continue to develop future-fit and ethical professionals across the country.
“We will continue to set standards and ensure the observance of ethical standards and professional conduct among members. We will also enforce the Ghana Banking Code of Ethics and Business Conduct which was launched in 2021 in collaboration with the Bank of Ghana and the Ghana Association of Banks,” he noted.
Touching on efforts to improve the CIB’s relevance in the financial sector, Benjamin Amenumey said plans are underway to redesign its curriculum to create more opportunities for skillsets development.
This, he explained, will ensure the Institute becomes the premium learning partner to churn out trusted professionals for the banking industry.
Mr Amenumey said the CIB will seek to mobilise resources for the acquisition of necessary capabilities and technologies to enable it achieve the objectives of effective learning and delivery.
He, however, called for effective collaboration and financial support from key stakeholders toward the acquisition of the requisite technology.
Meanwhile, Bank of Ghana Governor, Dr. Ernest Addison on his part assured financial institutions in the country of providing support with additional liquidity in the midst of the current economic challenges.
“In addition to the near-term adoption of the IMF programme, we will provide a balance of payment support to help with financing gaps, boost investor confidence and restore stability,” Dr. Addison noted.
Despite substantial shocks in the larger economy, the country’s banking sector fared brilliantly in the first 10 months of the year, especially over the third quarter, according to data just issued by the Bank of Ghana (BoG).
Banks in the nation survived the effects of the pandemic and deteriorating macroeconomic conditions to report robust asset growth and improved profitability in the period under consideration thanks to strengthening across the board during and after the sector shake-up.
Between October 2021 and October 2022, the value of the banking sector’s assets increased collectively by 43.7 percent to reach GH 249.9 billion, or 42.2 percent of the revised 2022 Gross Domestic Product (GDP) projection of GH 592 billion.
“Underpinning the growth in assets was sustained growth in deposits and borrowings, as well as the revaluation effect of the foreign currency component of key balance sheet indicators,” BoG Governor Dr. Ernest Addsion said at a press briefing after the 109th meeting of the Monetary Policy Committee (MPC).
Providing further details, he stated that total deposits and borrowing grew by 46.5 and 17.2 percent respectively to hit GH¢172.1billion and GH¢30.4billion at the end of October 2022.
The industry remained profitable, posting a cumulative post-tax profit of GH¢4.4billion; a 17.2 percent rise over the 10 percent growth during the same period last year. Profitability was underpinned by net interest income, which grew by 22.7 percent to GH¢12.8billion.
Also, net fees and commissions grew to GH¢2.9billion – raising operating income by 27 percent in the process.
Financial Soundness
The industry’s Financial Soundness Indicators were a mixed-bag but remained “broadly positive” as the Non-Performing Loans (NPL) ratio improved from 16.4 percent in October 2021 to 14 percent in October this year – attributed to the higher growth in credit relative to increase in the NPL stock.
However, the currency depreciation and mark-to-market investment losses by some banks ensured the industry’s Capital Adequacy Ratio (CAR) shrank from 19.8 percent to 14.2 percent on a year-on-year basis; it however remained above the prudential minimum threshold of 13 percent.
The central bank was however quick to note that despite the 10-month performance, key indicators are pointing to a slowdown in the industry; with macroeconomic headwinds expected to take a toll on the performance of banks as well as credit to the private sector.
“There are strong signs of emerging spillover effects from the recent macroeconomic challenges,” the BoG Governor remarked.
Credit performance
The BoG however noted that in its latest survey of credit conditions conducted in October 2022, commercial lenders are expecting to persist with tightening credit to businesses and households over the next six months.
“This is expected to reflect in a steady increase in average lending rates and a marginal decline in credit demand by enterprises and households,” Dr. Addison added.
Already, the interbank weighted average rate has increased to 23.98 percent in October 2022 from 12.66 percent a year ago – in tandem with hikes to the monetary policy rate and central bank-mandated hikes in the Cash Reserve Ratio from 12 percent in August 2022 to 14 percent in October.
As such, average lending rates across the industry rose from 20.34 percent to 31.4 percent YoY.
The Monetary Policy Committee of the Bank of Ghana increased the monetary policy rate by 250 basis points, from 24.5% to 27%, as of this coming week.
The Committee provided a number of explanations for the rise, including heightened economic and policy uncertainties, inflationary pressures, and a drop in the value of the Ghana cedi in relation to the US dollar.
He highlighted that though the increase in monetary policy rate is a conventional practice across the world, Ghana’s case requires a different approach.
“The reason is that if you look at our inflation basket, the causes of inflation are more of a cost-push than a demand-pull. So if you increase the monetary policy rate, you expect the inflation rate to drop. But in the past 12 months, about 14% has increased to 27%, and why is inflation at 40.4%? Why is the producer price index also 65.2%? So it tells you that the problem is bigger than the demand pulls rather than the cost-push. So what do we do to arrest the various component of what is contributing to our inflation rate,” he shared.
The economist earlier explained that “Central banks across the world what they have been doing to catch up inflation is to increase their monetary policy rate. The idea is that there is excess liquidity in the economy and for the current inflation, it is a demand pool. There is a lot of money in the system chasing fewer goods, which has allowed a high rate of inflation. So to arrest and bring down inflation they are increasing monetary policy rate.”
He continued, “The current increase in our monetary rate will only allow our lending rate to shoot up because if you look at our lending rate we use what is called the Ghana Reference rate and that is what we use as competition for our lending rate. One key component is the monetary policy rate then we look at the treasury bill rate. So if our monetary policy rate goes up it will affect the Ghana Reference Rate which in the variable will also affect our lending rate on the market so I think the fiscal side should respond either than just using the monetary policy rate to solve this high inflation we’re facing.”
The Interbank forex rates from the Bank of Ghana today, December 1, 2022, have shown that the Ghana Cedi is trading against the dollar at a buying price of 13.0978 and a selling price of 13.1110.
As compared to yesterday’s trading of a buying price of 13.0980 and a selling price of 13.1112. At a forex bureau in Accra, the dollar is being bought at a rate of 14.00 and sold at a rate of 14.75.
Against the Pound Sterling, the Cedi is trading at a buying price of 15.6834 and a selling price of 15.7004 as compared to yesterday’s trading of a buying price of 15.7098 and a selling price of 15.7268.
The Euro is trading at a buying price of 13.5751 and a selling price of 13.5875 as compared to yesterday’s trading of a buying price of 13.5663 and a selling price of 13.5799.
At a forex bureau in Accra, Euro is being bought at a rate of 13.90 and sold at a rate of 15.10.
The South African Rand is trading at a buying price of 0.7728 and a selling price of 0.7734 as compared to yesterday’s trading of a buying price of 0.7705 and a selling price of 0.7710.
The Nigerian Naira is trading at a buying price of 33.9146 and a selling price of 33.9459 as compared to yesterday’s trading at a buying price of 33.8553 and a selling price of 33.9575.
At a forex bureau in Accra, Nigerian Naira is being bought at a rate of 17.00 Naira for every 1 Cedi and sold at a rate of 21.50.
For the CFA, it is trading at a buying price of 48.4208 and a selling price of 48.4939.
At a forex bureau in Accra, CFA is being bought at a rate of 19.70 CFA for every 1 Cedi and sold at a rate of 23.50 CFA for every 1 Cedi.
He claims that the policy’s goal of stockpiling domestically mined gold in return for finished petroleum products will lessen the need for foreign currency to pay for the annual imports of petroleum products worth around US$3 billion.
“As a result, we will avoid spending $3 billion on foreign exchange since the Bank of Ghana won’t need it.
The pressure on the cedi is instantly relieved as a result, and the currency will depreciate much, much less as a result, he said.
This comes on the back of the Russia-Ukraine war, which continues to impact the global oil market.
Subsequently, the price of Russian crude fell following sanctions imposed by the EU and U.S.; although it is now selling more oil to countries like China and India, which have not imposed sanctions on Moscow.
On the demand side, the easing of COVID-19 restrictions globally has led to increasing demand for crude oil – thereby pushing prices on the world market to go up amid the shortfall of supply with Russia being ‘cut-out’.
More recently, prices are beginning to fall on the world market due to a contraction in global output.
According to the minister, the January to September 2022 receipts exclude US$14.61million petroleum receipts from Corporate Income Tax and PHF Income that spilled over from 2021 to 2022.
This brings the total petroleum receipt available for distribution to US$1.18billion. The Carried and Participating Interest (CAPI) contributed the highest, at 50.8 percent, to total petroleum receipts for the period; followed by Royalties, 23.9 percent; and Corporate Income Tax, 25.1 percent.
The rest include Surface Rental of 0.17 percent to petroleum receipts for the period.
However, the minister said there were no receipts from gas for the period under review. This is despite recording a total of 189,469.44 million standard cubic feet (Mscf) of gas produced in the first to third quarters of the year from the three producing fields.
Total crude oil production for January to September 2022 was 39.15 million barrels. This comprises Greater Jubilee’s output of 23.09 million barrels, Tweneboa Enyenra-Ntomme (TEN) of 6.43 million barrels and Sankofa-Gye Nyame (SGN), 9.64 million barrels, representing 58.97, 16.41 and 24.62 percent respectively of the total output.
But the first to third-quarter of 2022 crude oil production of 39.15 million, according to the minister, is 5.73 percent lower than the production of 41.53 million barrels for the same period in 2021.
“The reduction in crude oil production is generally due to natural field decline from the TEN and SGN fields,” he added.
Meanwhile, of the total crude oil production for January to September 2022 of 39.15 million barrels, Ghana National Petroleum Corporation (GNPC) on behalf of the state lifted 7.55 million barrels – comprising 4.71 million barrels from the Jubilee field, 0.99 million barrels from TEN field and 1.85 million barrels from Sankofa Gye Nyame (SGN) field.
Petroleum Receipts for January to September 2022
Total receipts from crude oil liftings only by GNPC for January-September was US$873.25million (GH₵8.34billion), comprising the 63rd – 67th Jubilee liftings; 20th and 21st TEN liftings; and the 9th and 10th liftings from the Sankofa Gye-Nyame field.
He claims that the policy’s goal of stockpiling domestically mined gold in return for finished petroleum products will lessen the need for foreign currency to pay for the annual imports of petroleum products worth around US$3 billion.
“As a result, we will avoid spending $3 billion on foreign exchange since the Bank of Ghana won’t need it.
The pressure on the cedi is instantly relieved as a result, and the currency will depreciate much, much less as a result, he said.
Instead of the Bulk Distribution Companies going to the Bank of Ghana every few weeks to ask for foreign exchange to import oil, he said, this will no longer be the case when the barter policy is implemented.
This, he added, will effectively lower depreciation of the currency by ushering in a more stable exchange rate regime to enable the business community to flourish.
Speaking at the 11th Association of Ghana Industries (AGI) Awards 2022 in Accra, he said the import-reliant nature of the economy – particularly for finished petroleum products – accelerates depreciation of the cedi, increases cost of doing business and the cost of living.
“What drives fuel price increases, what drives the cost of doing business is fundamentally the exchange rate. So, if you are able to have a handle on the exchange rate movement, you are able to lower depreciation of the cedi,” he said.
Since independence, he added, the country has accumulated just 8 tonnes of gold despite being one of the world’s leading producers of the precious yellow metal.
Against this backdrop, the Vice President said the policy will require large gold mining companies to sell at least 20 percent of their gold to the central bank in domestic currency.
All other miners, including community mining schemes and small-scale miners, will also be mandated to sell their gold to the Precious Minerals Company beginning in first-quarter 2023.
Domestic purchase of the precious metal is to enable government accumulate substantial gold reserves for the barter policy.
No anti-dollar agenda
Dr. Bawumia said the barter policy is to correct a problem in the economy, contrary to claims that government is against the use of United States dollars in international transactions.
“We are not on any mission against use of the United States dollar in international transactions. In fact, we want to accumulate more dollars in our reserves.
“We have a specific issue to deal with – oil import and the nexus between those oil imports and the price of fuel, transport, food and utilities – and that is essentially what we are targetting by exchanging our gold for oil,” he clarified.
Most importantly, the move is to insulate domestic industries from persistent depreciation of the cedi – which also affects the cost of doing business and cost of living.
The domestic currency has depreciated by over 53 percent this year, one of its worst performances in history.
With a more stable exchange rate and microeconomic environment, he said: “There are many products that we are importing which we have the capacity to produce in Ghana”.
Meanwhile, president of AGI Humphrey Ayim-Darke said exchange rate volatility remains a major headache for businesses.
“Exchange rate losses continue to rise, and we can only hope that the measures being put in place will give us a glimmer of hope and some recovery within next year.
“While we acknowledge that a number of the current challenges emanate from external shocks over which we have little control, we urge government to expedite the announced measures so we can all smile again,” he advocated.
AGI Ghana Industry and Quality Awards
Organised by the Association of Ghana Industries in partnership with the Ministry of Trade and Industry and Ghana Standards Authority, the annual awards ceremony is designed to recognise excellence and innovation in the country’s manufacturing sector.
This year’s event, themed ‘Leveraging public-private collaborations to facilitate business recovery’, saw Kasapreko Company Limited walk away with the coveted Industrial Company of the Year award.
According to him, illicit black-market traders’ activities were causing the cedi to continue to fall against other major currencies, such as the US dollar, necessitating a crackdown to maintain compliance with Ghana’s forex laws and regulations.
In response to worries expressed by Torgbui Amenya Fiti V, Paramount Chief of the Aflao Traditional Area, about the November 10 arrest of numerous currency dealers at the Aflao Border.
Mr Dery said: “We’re all aware of the falling cedi to the dollar and it’s the disorder and lawless way in which foreign exchange is being done in Ghana.”
“It’s not done anywhere that you can get foreign money/exchange without telling us how you got it. How could you go to a place without providing an identity and you can change money?”.
“The lawlessness in that is also contributing to the falling cedi and the Bank of Ghana has decided to ensure that it brings sanity. I’ll assure you, all those who are acting lawfully will be allowed to operate but all those operating illegally will be stopped.”
Mr Dery said the same reason applied to arresting the cedi’s free fall that the Central Bank had withdrawn forex support for the importation of some foods that could be produced locally including rice and vegetable oil.
The Minister promised to forward Torgui Fiti’s concerns but said it was important to explain the reason for the arrest.
He assured that the country’s borders would remain open as the government was committed to the ECOWAS border protocol but urged all stakeholders to cooperate with security agencies to keep the peace and security of the nation.
Dr. Ernest Addison, the governor of the Bank of Ghana, has allayed concerns about the nation’s declining foreign reserves by asserting that once the policies set by the government and the Bank begin to show results, everything would return to normal.
The Gross International Reserves (GIR) have decreased to GH6.6 billion as of October this year, representing just 2.9 months of import cover compared to GH10.6 billion a year ago, which represented 4.8 months of import cover, according to the Summary of Economic and Financial Data (November 2022) published by the Bank of Ghana.
In the same vein, the net international reserves (reserves readily available to the central bank) have also depleted to GH¢2.8billion from GH¢7.2billion in the same period under consideration. This has raised some concerns over a possible total depletion of the reserves, which would have dire consequences for the economy – especially on the cedi, as it has already lost more than 50 percent of its value to the dollar this year.
But queried at a press conference after announcing a 250 basis points increase in the policy rate, which effectively takes it to 27 percent, Dr. Addison said the depleted reserves result from significant outflow transactions that have taken place this year with no corresponding inflows; adding that these are government obligations which have to be performed at all cost.
“This year alone, even though we didn’t go to the capital market we still had to service our debt. The numbers suggest that we experienced an outflow of US$5.2billion year-to-date in 2022. That is the extent of pressure on the central bank’s reserves because we had to pay our loans, almost US$3billion outflows to service debt – interest and amortization; almost US$800million to pay for energy payments; another US$1.8billion to support the market’s functioning. So we are seeing a situation where from the outflow side these are obligations that you cannot default. As I speak, we are still servicing our debt.
“And from the inflow side, the only major inflow that has come to support the budget this year is the Afri-Exim bank loan; and then, fortunately, we have the cocoa loan inflow in October. On a net basis we have lost, on a balance of payment basis, almost US$3.4billion as at the end of September; and we are projecting that we will even lose more. By December we could have lost US$4billion,” he said.
“If we are successful with the restructuring operations, the burden on balance of payments, in terms of external interest payment, will also be lifted; so we do not expect to see the same type of outflows we have seen this year…The IMF financing is an important part of the outlook. Hopefully, that will bring in US$3billion over the three-year period. And one of the things we are doing is buying gold to help improve reserve buffers,” he said.
He stressed, “Policy rate is only significant if the Bank of Ghana is a significant provider of liquidity to the banks, then you can charge at a policy rate plus which will be cheaper. But as we speak the people are not borrowing from the bank of Ghana to lend so you only give an indication.
“That indicative figure doesn’t reflect in the structure of my cost of capital and, therefore, it will not bring down my interest rate, it’s as simple as that. The earlier Finance Minister and his people understand this dynamics the better. It is for them to improve the support they give to the private sector,” he said.
Member of Parliament for Bolga Central, Isaac Adongo has accused the Akufo-Addo-led government of crippling the private sector since the New Patriotic Party assumed office in 2017.
According to Mr. Adongo, the “real credit” of the private sector has declined by a negative 3.9 percent, making it more difficult for businesses to thrive compared to the previous NDC administration.
He stressed, “Policy rate is only significant if the Bank of Ghana is a significant provider of liquidity to the banks, then you can charge at a policy rate plus which will be cheaper. But as we speak the people are not borrowing from the bank of Ghana to lend so you only give an indication. That indicative figure doesn’t reflect in the structure of my cost of capital and, therefore, it will not bring down my interest rate, it’s as simple as that. The earlier Finance Minister and his people understand this dynamics the better. It is for them to improve the support they give to the private sector.”
“If real credit to the banking sector or private sector has decline by negative 3.9 percent in other words it is a lot more difficult to get money now under NPP to run your business than it was to get previously and that the volumes have contracted in real terms by 3.9 percent how is that a reflection of support to the private sector. So no wonder real private sector credit has declined…” he added
The MP also insisted that about GHC8 billion and GHC9 billion liquidity in the banking sector has been frozen by government through the issuance of illiquid bonds to GCB Bank and CBG for the collapse of the seven banks instead of giving them cash or liquid bonds.
This he said has compromised the liquidity of these two banks, thereby, affecting their ability to meet their obligations to customers and extend needed credit to the private sector.
“Available data suggest a consistent decline of the private sector under the NPP Government thereby affecting the creation of sustainable jobs by the private sector,” Mr. Adongo reiterated.
Dr. Joseph Obeng, President of the Ghana Union of Traders Association (GUTA), Mr. Appiah Kusi, Regional Director of CUTS International for West Africa, and Michael Obiri-Agyei, Executive Director of the EXIM Frozen Foods Association-Ghana have all criticized the central bank’s current policy as being hurried.
They disagree with the new Bank of Ghana policy suggesting the removal of forex support for the importation of specific goods designated as non-critical.
The central bank will no longer provide forex support for the import of rice, poultry, vegetable oils, toothpicks, pasta, fruit juice, bottled water, ceramic tiles and a few others.
Touching on the subject on the Eye on Port programme, these trade leaders acknowledged the wisdom behind the policy; however, it lacks enough stakeholder consultation and an effective contingency plan.
“I believe as a country we cannot forever import everything we need; however, if you want to stop the dependence on imports, you need to have the relevant capacity to produce to meet local demand and export. As it stands now, our total demand doesn’t match our local capacity to produce. There is a deficit,” Mr. Appiah Kusi Adomako opined.
“Already, the cedi has been battered by the raging storms of depreciation and the economy is staggered by inflation. So if we allow this BoG measure to stick, we are going to create more problems. They need to look at the welfare implications on households; commodities are expensive and people don’t earn nearly enough. Things will get worse when there is scarcity,” Mr. Adomako added.
He said while such a policy will bring long-term benefits such as strengthening the cedi, create jobs and grow local industries, without an effective strategy in place this policy could worsen the present economic crisis.
The West African Regional Director of CUTS International said the Bank of Ghana will have to liaise with other key institutions – such as the Ministry of Food and Agriculture, the Statistical Services – in the decision-making process for such a drastic policy.
He explained that such an approach will have to be data-driven and all-encompassing to ascertain Ghana’s readiness to implement such a policy.
Similarly, he said government should come up with an effective and timely contingency plan that will make up for the production deficit.
“For example when you come to the rice production sector, government can look at providing subsidised loans to go into massive rice production for a period – and ban rice importation after. That is a policy backed by action. As of now, none of that has been done.”
The Executive Director of the EXIM Frozen Foods Association, Ghana, Michael Obiri-Agyei, said this is an example of a policy intended for good but not carefully thought-through.
He said government and the Bank of Ghana did not hold extensive consultations with stakeholders to help them appreciate the wisdom behind the directive, and also help them plan ahead.
“This is not the solution that we need right now. Take somebody who has imported frozen goods. Such a person has already engaged his suppliers to export to him. Prior to engaging the supplier, he was relying on the forex with assistance from the Bank of Ghana to pay the supplier. How do you expect him to survive? When you do these things, you cripple people doing legitimate business in your country. You make people unable to thrive in the business they have chosen to do. When you restrict them from accessing forex, you might as well tell them to close their businesses,” he lamented.
According to panellists, the directive will cause traders to engage in desperate methods including smuggling and patronising the black market.
“You do not expect that when you restrict people from gaining access to forex, you will solve the problem. What you will do is open us up to a black market that cannot be controlled. Others may also decide to import through Togo and smuggle goods into the system. The FDA is then unable to regulate what we consume; government is unable to collect taxes,” Mr. Obiri-Agyei articulated.
“The moment Bank of Ghana announced this directive, we knew it was the beginning of the greater challenges that we are going to have; because people might begin hoarding, demand will rise and pressure will be placed on these imported goods – and prices will hike,” added GUTA President Dr. Obeng.
Like his fellow panellists, he expressed admiration for the nation’s aspirations to self-sufficiency; but he said this cannot be done without proper preparation.
He said, for a long time, traders were blamed for the cedi-depreciation due to excessive importation.
Dr. Obeng emphasised that Ghanaian traders are open to sourcing goods locally, but only if Ghana can produce at the same capacity, standard quality and at competitive prices.
He said he believes government should take a measured approach in trying to discontinue the importation of these commodities.
“We have always been of the opinion that local production should be promoted side by side with importation,” he expressed.
The Gross International Reserves (GIR) have decreased to GH6.6 billion as of October this year, representing just 2.9 months of import cover compared to GH10.6 billion a year ago, which represented 4.8 months of import cover, according to the Summary of Economic and Financial Data (November 2022) published by the Bank of Ghana.
This has raised some concerns over a possible total depletion of the reserves, which would have dire consequences for the economy – especially on the cedi, as it has already lost more than 50 percent of its value to the dollar this year.
But queried at a press conference after announcing a 250 basis points increase in the policy rate, which effectively takes it to 27 percent, Dr. Addison said the depleted reserves result from significant outflow transactions that have taken place this year with no corresponding inflows; adding that these are government obligations which have to be performed at all cost.
“This year alone, even though we didn’t go to the capital market we still had to service our debt. The numbers suggest that we experienced an outflow of US$5.2billion year-to-date in 2022. That is the extent of pressure on the central bank’s reserves because we had to pay our loans, almost US$3billion outflows to service debt – interest and amortization; almost US$800million to pay for energy payments; another US$1.8billion to support the market’s functioning. So we are seeing a situation where from the outflow side these are obligations that you cannot default. As I speak, we are still servicing our debt.”
“And from the inflow side, the only major inflow that has come to support the budget this year is the Afri-Exim bank loan; and then, fortunately, we have the cocoa loan inflow in October. On a net basis we have lost, on a balance of payment basis, almost US$3.4billion as at the end of September; and we are projecting that we will even lose more. By December we could have lost US$4billion,” he said.
The Bank of Ghana Governor however expressed optimism over discussions with the IMF: that when completed and successful, the agreement will add about US$3bilion to the foreign currency buffers, in addition to its own gold purchasing policy which has already kick-started.
“If we are successful with the restructuring operations, the burden on balance of payments, in terms of external interest payment, will also be lifted; so we do not expect to see the same type of outflows we have seen this year…The IMF financing is an important part of the outlook. Hopefully, that will bring in US$3billion over the three-year period. And one of the things we are doing is buying gold to help improve reserve buffers,” he said.
He called the action that has not yet been taken by the current demonstration a “great decision.”
In an interview with the morning program “Ghana Montie” on NEAT FM, he commented, “It is really original.
Dr. Bawumia previously said that the government is discussing a new strategy to make sure that the nation pays for imported oil goods with gold rather than foreign currency.
In a Facebook post on November 24, 2022, the Vice President said the policy is expected to take effect by the end of the first quarter of 2023 and form parts of efforts to address the persistent depreciation of the cedi.
He explained that once the policy is implemented, “it will fundamentally change our balance of payments and significantly reduce the persistent depreciation of our currency with its associated increases in fuel, electricity, water, transport, and food prices”.
“This is because the exchange rate (spot or forward) will no longer directly enter the formula for the determination of fuel or utility prices since all the domestic sellers of fuel will no longer need foreign exchange to import oil products,” the Vice president said.
Adding that, “the barter of gold for oil represents a major structural change. My thanks to the Ministers for Lands and Natural Resources, Energy, and Finance, Precious Minerals Marketing Company, and the Governor of the Bank of Ghana for their supportive work on this new policy. We expect this new framework to be fully operational by the end of the first quarter of 2023. God bless our homeland Ghana.”
He claims that the Central Bank will take action to ensure that banks maintain their financial stability.
He claimed that this is the Central Bank’s most significant responsibility.
The BoG’s decision comes as the government gets ready to restructure its debt in order to clear the way for an IMF bailout.
Bondholder haircuts will be part of this.
At a press conference, Dr. Ernest Addison stated: “The good news is that we believe there are appropriate buffers.
However, the Central Bank will implement measures to guarantee the banks’ continued viability.
On the subject of Ghana’s galloping inflation, the Governor said, “The inflation forecast shows that inflation will likely peak in the first quarter of 2023 and settle around 25% by the end of 2023. This forecast is conditioned on the continued maintenance of the tight monetary policy stance and the deployment of tools to contain excess liquidity in the economy.”
He noted that there are some risks associated with inflation such as additional pressures from the proposed VAT increase in the exchange rate have to be monitored.
Dr. Addison added that “to continue to anchor inflation expectations, the committee, therefore, decided to increase the policy rate by 250 basis points to 27%.”
As compared to yesterday’s trading of a buying price of 13.0985 and a selling price of 13.1117. At a forex bureau in Accra, the dollar is being bought at a rate of 14.40 and sold at a rate of 14.85.
Against the Pound Sterling, the Cedi is trading at a buying price of 15.7677 and a selling price of 15.7848 as compared to yesterday’s trading of a buying price of 15.8230 and a selling price of 15.8415.
At a forex bureau in Accra, the pound sterling is being bought at a rate of 16.80 and sold at a rate of 17.40.
The Euro is trading at a buying price of 13.6163 and a selling price of 13.6299 as compared to yesterday’s trading of a buying price of 13.6241 and a selling price of 13.6377.
The South African Rand is trading at a buying price of 0.7643 and a selling price of 0.7651 as compared to yesterday’s trading of a buying price of 0.7642 and a selling price of 0.7649.
At a forex bureau in Accra, South African Rand is being bought at a rate of 0.65 and sold at a rate of 1.10.
The Nigerian Naira is trading at a buying price of 33.8487 and a selling price of 33.9730 as compared to yesterday’s trading at a buying price of 33.8156 and a selling price of 33.9201.
According to reports, the government was able to finance the maturities of its 5-year bonds thanks to assistance from the Bank of Ghana in the amount of GH2.83 billion.
This is due to investors’ lack of interest in rollovers, according to a report by Joy Business.
The results showed that the GH¢2,066.12 million bids were accepted from the 91-day treasury bill, GH¢223.55 was accepted from the 182-day bill, and GH¢101.71 for the 365-day bill.
The target for the auction however was GH¢2,176 million but GH¢2,392.27.
The increase in this week’s subscription may be an indication of increasing investor confidence as last week’s bills were also over-subscribed.
Dr. Ernest Addison, the governor of the Bank of Ghana (BoG), has expressed worry about the solvency of some Ghanaian banks.
According to him, the Central Bank will put in measures to ensure that banks remain solvent. This, he said is the most important task of the Central Bank.
The decision by the BoG comes as the government prepares to restructure its debt to pave way for an International Monetary Fund (IMF) bailout. This will include haircuts to bondholders.
Dr. Ernest Addison explained at a media briefing that: “The good thing is that we think that there are adequate buffers. Nevertheless, the Central Bank will put in measures that will ensure that the banks remain solvent.”
On the subject of Ghana’s galloping inflation, the Governor said, “The inflation forecast shows that inflation will likely peak in the first quarter of 2023 and settle around 25% by the end of 2023. This forecast is conditioned on the continued maintenance of the tight monetary policy stance and the deployment of tools to contain excess liquidity in the economy.”
He noted that there are some risks associated with inflation such as additional pressures from the proposed VAT increase in the exchange rate have to be monitored.
Dr Addison added that “to continue to anchor inflation expectations, the committee, therefore, decided to increase the policy rate by 250 basis points to 27%.”
The Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) has increased the Monetary Policy Rate by 250 basis points to 27 percent.
The prime rate, which is of keen interest to businesses, signals the rate at which the Central Bank will lend to commercial banks.
It also subsequently influences average lending rates on loans to individuals and businesses.
In his address to the media, Governor of the Bank of Ghana, Dr. Ernest Addison, noted that the increase forms part of efforts to address current inflationary pressures.
“The inflation forecast shows that in the outlook, inflation will likely peak in the first quarter of 2023 and settle at around 25 percent by the end of 2023. This forecast is conditioned on the continued maintenance of tight monetary policy stance and the deployment of tools to contain excess liquidity in the economy. There are however some risks to this forecast that would have to be monitored, including additional pressures from the proposed VAT increase, and exchange rate pressures.”
“Continued vigilance to the evolution of these potential price pressures in the outlook will be key. The Committee is of the view that significant upside risks to the inflation outlook remain. To continue to anchor inflation expectations, the Committee therefore decided to increase the policy rate by 250 basis points to 27.0 percent,” he said.
Following the increase in the policy rate, his means cost of borrowing is expected to go up further.
Domestic economic activity has moderated somewhat, the Bank of Ghana has revealed.
High frequency indicators monitored by the Central Bank signalled some moderation in economic activity in the third quarter, relative to the first two quarters of the year.
The main indicators, it pointed out that dragged down the index were domestic VAT, ports activity, and cement sales.
The Bank’s survey of Business and Consumer confidence conducted in October 2022 continued to point to softening economic sentiments. Consumer confidence dipped on account of rising inflation and uncertainty about future economic conditions.
Business sentiments also deteriorated on concerns about rising operational costs, sharp currency depreciation, and weak consumer demand.
These survey findings, the Bank of Ghana, said were aligned with the decline in Ghana’s Purchasing Managers’ Index (PMI), which eased further to 44.0 in October 2022 from 45.6, a month earlier.
The Bank of Ghana’s (BoG) Monetary Policy Committee (MPC) has raised the policy rate once again by 2.5 percentage points to 27%.
This is the fifth time the policy rate has been revised this year.
In October, the Committee increased the policy rate to 24.5 percent, the fourth increment.
The Monetary Policy Committee following its 109th meeting noted that inflation risks and concerns about the exchange rate were the driving forces for the recent increase.
This means that the cost of borrowing is anticipated to increase further, however it will depend on the customer’s risk profile. Customers with established credit may get slightly better rates than first-time borrowers or those who are viewed as being at risk.
“The inflation forecast shows that in the outlook, inflation will likely peak in the first quarter of 2023 and settle at around 25% by the end of 2023. This forecast is conditioned on the continued maintenance of tight monetary policy stance and the deployment of tools to contain excess liquidity in the economy. There are however some risks to this forecast that would have to be monitored, including additional pressures from the proposed VAT increase, and exchange rate pressures. Continued vigilance to the evolution of these potential price pressures in the outlook will be key”, Dr. Ernest Addison, Governor of the Bank of Ghana stated”.
He added “the Committee is of the view that significant upside risks to the inflation outlook remain. To continue to anchor inflation expectations, the Committee therefore decided to increase the policy rate by 250 basis points to 27.0%”.
The monetary policy rate was raised by the Bank of Ghana from 24.5 percent to 27 percent by a factor of 250.
Dr. Ernest Addison, the chairman of the monetary policy committee and governor of the BoG, said the decision was made in response to the government’s plan to raise the VAT by 2.5 percent and skyrocketing inflationary rates.
Following its scheduled 109th meeting, which was held last week, the Monetary Policy Committee of the Bank of Ghana will publish its decision about the policy rate today, November 28.
The Institute of Economic Affairs explained that a hike may be required prior to the announcement because of the growing difference between inflation and the policy rate, which has forced commercial banks to borrow money from the BoG at significantly lower rates while lending to the government at higher rates.
In a statement issued by the Institute, it added that a possible hike in the Policy Rate (PR) will impact the cost of lending and the cost of doing business in the country.
Interest rates for 91-day Treasury Bills were 35.5%, 182-day Treasury Bills were 36.3%, and 364-day Treasury Bills were 35.8%.
Despite rising interest rates, the instrument’s returns are still negative because of excessive inflation and the cedi’s devaluation.
Inflation for the month of October stood at 40.4% whiles the Ghana cedi has depreciated by 54% according to the Bank of Ghana.
The results showed that the GH¢2,066.12 million bids were accepted from the 91-day treasury bill, GH¢223.55 was accepted from the 182-day bill, and GH¢101.71 for the 365-day bill.
The target for the auction however was GH¢2,176 million but GH¢2,392.27.
The increase in this week’s subscription may be an indication of increasing investor confidence as last week’s bills were also over-subscribed.
All significant mining firms must sell 20% of all gold processed at their refineries to the Bank of Ghana (in Ghana Cedis) before the gold is exported starting on January 1st, 2023 (as agreed upon with the Bank of Ghana).
The Bank of Ghana and the Precious Minerals Marketing Company (PMMC) will coordinate with large-scale mining companies to ensure compliance with this directive.
Also, all Community Mining Schemes (CMS) shall sell their gold outputs to Government through PMMC.
Therefore, all mining licenses for CMS shall include a clause mandating licensee to sell their gold output to Government.
Also, all Licensed Small-Scale Gold Miners shall sell their gold to Government through PMMC.
The gold to be purchased by the Bank of Ghana and the PMMC will be in cedis at spot price with no discounts.
These directives would also help local gold refineries obtain gold supplies from PMMC to support their operations as they work toward obtaining the required London Bullion Market (LBMA) certification.
The cost of crude oil keeps falling. On Monday, the product is being exchanged at a price of roughly 87 dollars per barrel on the global market.
Fuel prices in Ghana are projected to decrease at the pump in the following pricing window on December 1, 2022, provided that this progress continues and the Bank of Ghana is able to provide enough foreign currency for the BDCs at a favourable rate.
Brent crude is down by 0.72 percent and is being offered at 86 dollars 99 Cents a barrel having reached its lowest level since September at 85 dollars 80 Cents. Should this decline persist petroleum consumers would heave a sigh of relieve as prices could drop a little further.
A strong Cedi could make this a reality. Currently, price of diesel has dropped from GH¢23.49 a litre to GH¢20.50 a litre. Petrol also reduced from GH¢17.99 to GH¢16.82 per litre.
Liquified Petroleum Gas has not witnessed a decline on the international market and will increase in the next pricing window, December 1, 2022.
In 2023, the government plans to spend more than 200 billion Ghanaian cedis while expecting to earn just 143 billion, resulting in a 7.7% budget deficit.
The former finance minister recommended the government to make significant spending cuts in order to adequately address the situation while speaking on State of Affairs.
“We are not raising enough revenue and stuck to tax revenue of 12 to 13 percent, as well as the revenue setting, if we are lucky, at 15.5 percent was the highest in actual terms for 2015. Therefore we are not able to break the Sub-Sahara average of 17.5 let alone the 20 percent that the Minister indicated.
“So you can see the road that we need to travel in that tax to GDP at 20 percent and we are talking of a five percent increase. Even if it is total revenue we are talking about, a 24 percent increase. We are not closing the gap but we are making the effort to increase revenue because there will always be a deficit, Mr. Terkpe stated.
He added: “I think there are some positive vibes coming from the budget but I’m afraid we have a long way to go in reducing the deficit and bringing the debts to sustainable levels so that we can go to the market again. Because now everything is dependent on the domestic market, treasury bills, bonds, and the Bank of Ghana beginning to take over the mantle of financing the deficit.”
The former finance minister indicated that the government’s debt/deficit is part of the Appropriation Bill and the Bank of Ghana cannot allocate to itself the fiscal responsibility of who to pay.
“Because when the budget is presented there is a projection of how it should be financed,” Mr. Terkper explained.
