Accra: The Chief Investment Officer of Axis Pension Trust, Peter Bawuah, has urged the government to capitalize on the current economic stability by diversifying the portfolio radically and ensuring the financial system supports the real sector to build lasting resilience. Speaking at the 4th Annual Forecast Dinner and Charter Recognition Ceremony organized by the Chartered Financial Analyst (CFA) Society Ghana in Accra, Bawuah emphasized the need to leverage economic strength to industrialize the economy and reduce import dependency. He encouraged the implementation of strategic policies and capital allocation to reshape the economy's productive base.
According to Ghana Web, Bawuah expressed concerns about Ghana's heavy reliance on external markets, stating that the country's import-oriented nature is unsustainable. He identified agriculture, aquaculture, agro-processing, ICT, and domestic manufacturing as critical sectors needing investment to establish a resilient economy. Bawuah also highlighted the importance of diversifying the economy beyond stabilizing the currency through dollar inflows, questioning the sustainability of such measures.
Bawuah warned investors that the era of easy, broad-market gains is over, pointing to the severe overvaluation signaled by the S and P 500 trading at 200 percent of US GDP, referred to as the 'Warren Buffett Indicator'. He stressed the need for selectivity and active management in a world of overvaluations, advocating for disciplined and tactical diversification strategies across sectors, geographies, and asset classes.
Courage Kwesi Boti, Head of Macroeconomic Research, Investor Relations, and ESG at GCB Bank, echoed similar sentiments, analyzing the extraordinary measures underpinning the Ghanaian economic recovery. He highlighted the unsustainable nature of recent inflation drops, achieved through costly central bank sterilization and government suspension of GHS68 billion in validated payables. Boti cautioned that these interventions are not structural fixes and predicted a potential rise in inflation, plateauing interest rates, and challenges arising from the government's planned US$64 billion deficit financing.
Abena Amoah, Managing Director of the Ghana Stock Exchange (GSE), pointed out constraints in the real economy, noting weak credit transmission to productive sectors despite lower policy rates. She called for companies to raise patient capital for growth on the exchange and emphasized the necessity of synchronizing the government's infrastructure initiatives with private sector funding access to avoid stifling the private sector. Amoah concurred with the call for diversification, stressing that true industrialization requires capital to flow to productive sectors rather than merely servicing debt and imports.