US$1.7 billion Afreximbank financing boost for economy

The country’s economic fortunes could receive a significant fillip as the African Export-Import Bank (Afreximbank) weighs an additional US$1.706billion in transactions, according to the Ministry of Finance.

This prospective financing commitment comes on top of Afreximbank’s existing support for Ghana’s public and private sectors, which currently stands at an impressive US$1.761billion, underscoring the multilateral trade finance institution’s unwavering commitment to bolstering the country’s economic development.

Afreximbank’s potential US$1.7 billion investment in Ghana’s economy is poised to provide a much-needed boost to various sectors, ranging from infrastructure to trade facilitation, as the country navigates its path to economic recovery and sustained growth.

The bank’s robust support for Ghana’s development agenda was recently shown by a groundbreaking project nicknamed ‘Project Shiprite’. Earlier this month, a consortium comprising Afreximbank, the African Development Bank (AfDB), Eastern and Sout
hern African Trade and Development Bank (TDB) and Petra Pension Schemes jointly executed a facility agreement to extend senior debt funding of US$94million to PMD Assetco Limited (PMD).

This financing will facilitate the construction and operation of a cutting-edge floating dock ship-repair facility in the port of Takoradi, positioning Ghana as a regional maritime hub. With the full commitment of US$13 million in capital secured, Project Shiprite will boast a 13,500-tonne lift-capacity floating drydock, 30,000 square metres of reclaimed land, a 200-metre jetty, modern workshops, offices and heavy marine equipment upon completion.

Afreximbank Annual Meetings

Afreximbank’s steadfast backing of Ghana’s economic aspirations was further underscored by the recent visit of Abena Osei-Asare, Minister of State, who will lead Ghana’s delegation to the 2024 Afreximbank Annual Meetings and 3rd African-Caribbean Trade and Investment Forum (ACTIF2024) in Nassau, Bahamas.

The high-profile event, themed ‘Owning Our Desti
ny: Economic Prosperity on the Platform of Global Africa’, brought together over a thousand delegates including African and Caribbean leaders, policymakers, business leaders and thought-leaders to chart a course for sustainable economic transformation on the continent.

Ms. Osei-Asare will deliver keynote remarks at the opening ceremony and a plenary session focused on ‘Economic Transformation for Global Africa in a Polycrisis World’. She also participated in a high-level policy dialogue on ‘An Emergent Global Africa: A Platform for Sustainable Economic Transformation’.

Ghana’s strong ties with Afreximbank date back to the bank’s inceptio, as the country is a founding member and shareholder, holding 3,645 Class ‘A’ shares – representing 2.41 percent of the bank’s total shareholding.

Source: Ghana Web

Government secures landmark debt agreement with Official Creditors Committee

Government has successfully negotiated a Memorandum of Understanding (MoU) with the Official Creditor Committee (OCC) concerning the debt resolution terms established in January 2024.

The Ministry of Finance noted that the OCC, jointly led by China and France, has been instrumental in reaching this significant milestone.

The Ministry explained that the MoU solidifies the preliminary agreement with the official creditors from January, signifying a pivotal move towards reestablishing Ghana’s long-term fiscal stability.

It also indicates that finalizing the Official Creditor Committee’s terms will clear the path for the International Monetary Fund’s (IMF) endorsement, facilitating the release of a subsequent IMF funding installment of $US360 million.

The IMF Board’s green light is expected to unlock additional financial support from developmental allies, notably the World Bank. This accord is also anticipated to enhance ongoing negotiations with private lenders, as Ghana is eager to secure a similar settleme
nt promptly.

The Ministry, in a statement said, ‘Each official creditor will now follow its internal procedures to sign the MoU. Once signed, the agreed terms will be implemented through bilateral agreements with each OCC member We call upon our official creditors to fast-track their internal processes towards the signing of the bilateral agreements.”

‘Ghana continues to engage in good faith with all commercial external creditors, striving to finalise restructuring agreements that respect Ghana’s need for debt relief and the comparability of treatment principle. Ghana also reiterates its firm commitment to remain in arrears with its external commercial creditors until agreements compatible with the comparability of treatment principle are reached,’ it added.

The Ministry urged the official creditors to expedite their internal proceedings for the signing of these bilateral agreements.

Dr. Mohammed Amin Adam, the Finance Minister, expressed the Ministry of Finance’s deep appreciation to all OCC members, esp
ecially the co-chairs, China and France, for their steadfast dedication to aiding Ghana in addressing its financial challenges.

‘The Ministry of Finance on behalf of the Republic of Ghana extends our gratitude to all members of the OCC. particularly the committee’s co-chairs. China and France, for their unwavering commitment to assisting our country in resolving its debt issues,” it added.

He remarked that this landmark accord is a significant achievement in Ghana’s journey of debt restructuring and is poised to amplify the country’s reform initiatives, bolstered by the robust backing of its developmental partners.

Source: Ghana Web

Cedi has become the worst currency under ‘so-called economic Messiah’ – Hassan Ayariga

If former President John Mahama had to be kicked out of office when GHS4 cedis equalled a dollar, “then I don’t know why Vice President Mahamudu Bawumia is running for President” when Ghanaians need GHS16.00 cedis to get $1.00, the flagbearer of the All People’s Congress (APC), Mr Hassan Ayariga has said.

At a press conference on Tuesday, 11 June 2024, Mr Ayariga said: “Today, the cedi has become the worst currency under the so-called economic Messiah,” in reference to Dr Bawumia.

He said Ghanaian businessmen and women are “becoming poorer against their counterparts in other countries due to the high rate of the depreciation of the Ghanaian cedi.”

He noted that the government of Ghana lost over GHS10 billion due to the cedi depreciation.

“I don’t know how many of you have changed dollars, euros or pounds this morning but no one can dispute the fact that the Bawumia-led Economic Management Team has done a woeful job at keeping the cedi afloat. There is no strength in the cedi against the major trading curr
encies,” Mr Ayariga complained.

In light of that, he has advised Dr. Bawumia and the governing New Patriotic Party to concentrate on “finishing the 8 rather than breaking the 8, because there is no 8 to break.”

He said: “Dr. Bawumia should know that Ghanaians don’t have a short memory,” adding: “The suffering is real and escalating, so he should stop the jokes.”

“Dr. Bawumia, please stop crying for the steering wheel” because “the car is not a toy.”

The steering wheel, Mr Ayariga, noted, “was given to you and your boss, and you both drove to a different direction.”

“You have lost credibility as a party and as a candidate,” he said, pointing out that the NPP and its flagbearer have “no good policies” and also are full of “deceit and propaganda,”

“Your only option left is vote-buying,” Mr Ayariga added.

In his view, Dr. Bawumia should watch his ‘It Is Possible’ slogan since “Ghanaians are not listening to you anymore. You have inflicted pain and suffering on us, so, ‘it’s possible’ has no chance. Rather,
use that resource and change the narrative.”

“Our nation has become a banana republic under your watch, and it’s pathetic, Mr. Vice president.”

Source: Ghana Web

Inflation dropped from 25% to 23.1% in May 2024

Ghana’s inflation rate decreased marginally from the 25% recorded in April 2024 to 23.1% in May 2024.

Government Statistician of the Ghana Statistical Service, Professor Samuel Kobina Annim, revealed this at a press conference in Accra on Wednesday, June 12, 2024.

The month-on-month inflation for May 2024 experienced a 3.2% reduction.

According to the figures released by the Ghana Statistical Service (GSS), food inflation was the major contributor to the overall decrease in the inflation rate.

Food inflation for the month of May was 22.6%, compared to the 26.8% recorded in the previous month, April. This represents a deceleration from the 2.7% increase recorded in April 2024.

Non-food inflation was 3.6% month-on-month.

Consumer Price Index measures changes in the price level of a fixed basket of goods and services purchased by households.

Source: Ghana Web

Telecommunications and EMIs Chamber engage NPP flagbearer on the Telecoms Manifesto

The Vice President and the flagbearer of the New Patriotic Party (NPP), Dr. Mahamudu Bawumia, has been urged to prioritize and resolve key challenges that continue to plague the fortunes of the telecommunications industry as well as the digital payments ecosystem in Ghana if he wins the 2024 elections.

The calls were made by the leadership of the Ghana Chamber of Telecommunications (GCT) and the Electronic Money Issuers (EMIs) Chamber of Ghana.

In a scheduled engagement on June 7, 2024, at the secretariat of the two Chambers in Accra, the NPP’s flagbearer was taken through some of the key issues affecting players in the two industries.

For the GCT, the following key issues among others were discussed;

1. A conducive and supportive policy and regulatory environment

2. An enabling tax regime

3. Protection for industry infrastructure

4. Cost of doing business and ease of doing business

5. Indebtedness to industry

6. Development of the needed human capital for the industry

7. Increasing smartphone penet
ration across Ghana

Issues discussed for the EMIs Chamber meanwhile included;

1. Repeal of the E-Levy law

2. Facilitation of cross-border payments

3. Driving digital payments for People to Government as well as merchant payments

4. Enabling policy and regulatory environment

5. Cost and ease of access to the Ghana card database among others

The Ghana Chamber of Telecommunications was led by its Chairman, the CEO of Telecel Ghana, Ing. Patricia Obo-Nai, Acting CEO of AT, Leo Skarlatos, CEO of MTN Ghana, Stephen Blewett, CFO of ATC Ghana, Bright Owusu Bempah; and Ing. Dr. Kenneth Ashigbey the CEO of both Chambers.

The EMIs Chamber of Ghana was, on the other hand, led by the founding chairman of the Chamber, Philip Amoateng, the Director for Telecel Cash, the Acting Managing Director of AT Money, Mohammed Alhassan and other representatives.

On the NPP side, Vice President and flagbearer for the NPP, H.E Dr. Mahamudu Bawumia joined the two Chambers with the Minister for Communications and Digitalisation U
rsula Owusu-Ekuful; immediate past Majority Leader and Chairman of the NPP Manifesto Committee for election 2024, Osei Kyei-Mensah-Bonsu; Prof Kwaku Appiah-Adu, the Senior Policy Advisor, Vice President’s Secretariat; Dr. Augustine Blay, Executive Secretary to the Vice President; among other team members.

The meeting forms part of the efforts by the two Chambers to share their key issues with all parties ahead of the December 7 elections, with the hope that the issues are captured in their respective manifestos and implemented once they come into power.

The NPP Flagbearer, Dr. Mahamudu Bawumia, in his remarks, highlighted his support for the sector, especially spearheading the implementation of Mobile Money Interoperability in the country as vice president.

He expressed his commitment to ensuring that all the issues raised in the Telecoms Manifesto and at the meeting are worked on, working in close collaboration with members of both Chambers.

As part of both Chambers’ plans of meeting the flagbearers of t
he parties with representation in parliament, the two Chambers earlier in the week met with the NDC Flagbearer, John Dramani Mahama, on June 3, 2024.

The Chamber had earlier shared the Telecoms Manifesto with all political parties.

The next step for the Chamber would be to review the manifestos of all the political parties to find out how much of the Telecoms Manifesto has been incorporated into the political parties’ manifestos.

Then in 2025 monitor and advocate for the implementation of plans and policies of the ruling to ensure that the issues raised in the Telecoms Manifesto are implemented for the benefit of the country.

Source: Ghana Web

Ghana’s youth unemployment rate 7.16% – AfDB

The African Development Bank (AfDB) reports that Ghana’s youth unemployment rate stood at 7.16% in 2023, with the issue particularly acute among those aged 15 to 24.

The bank’s updated 2024 Africa Economic Outlook highlights that unemployment is significantly higher among women in this age group compared to their male counterparts.

The report notes a slight increase in multidimensional poverty, rising from 46% in 2017 to 46.7% in 2022, largely attributed to the lingering effects of the Covid-19 pandemic.

The data shows that female youth unemployment reached 36.7%, while the rate for males was 29.3%.

Rising youth unemployment in Ghana is a growing concern, prompting calls for intensified structural transformation.

The report points out that productivity in the services sector, the largest employer, has stagnated, while gains in industry and agriculture remain modest.

Agriculture’s share of employment fell from 53.9% in 2007 to 29.8% in 2019.

In contrast, industry’s share increased from 14.1% to 21.0%, a
nd the services sector saw its share rise from 31.9% to 49.2%.

The AfDB suggests several measures to fast-track Ghana’s structural transformation. These include enhancing competitiveness by addressing infrastructure bottlenecks, accelerating agro-industrialization through skills development and value addition, and bolstering private sector growth.

Additionally, the report emphasizes the need for a robust policy framework to support technology adoption and innovation.

Source: Ghana Web

We’ve begun the process to bring road tolls back – Roads Minister

The Ministry of Roads and Highways has announced its efforts to engage key stakeholders in a bid to finalize the reintroduction of road tolls, which were halted in 2021.

According to the Roads Minister, Francis Asenso-Boakye, the reinstatement of tolls is crucial for generating the funds needed to repair and maintain the country’s deteriorating roads.

The cessation of toll collection, effective November 18, 2021, was initially implemented to alleviate traffic congestion at toll booths and in anticipation of the e-levy.

This move, however, received mixed reactions from the public.

Speaking on the current initiative, the Roads Minister emphasized the necessity of reintroducing tolls to secure funding for road maintenance.

‘[Road] maintenance also means money. In many countries, they use the tolls that they collect from road tolls to finance maintenance.

‘But in our case, we have suspended it, and I think it is a good time for us to start the discussion to bring these road tolls back and get money to maint
ain our roads,’ he said.

Highlighting the importance of stakeholder engagement in this process, the minister added, ‘That is very important, and we have started the process by engaging the various stakeholders to get their buy-in to make sure that we bring the road tolls back.’

Source: Ghana Web

The Cedi’s free fall: A crisis of confidence in Bank of Ghana and Government of Ghana

Since 2017, the Cedi has taken a staggering nosedive of 246 percent against the dollar. It’s like watching a beloved football team slide down the league table – painful and inexplicable.

Any attempt to manipulate supply and demand artificially to support the Cedi/US$ exchange rate will not just fail; it will exacerbate the problem. These attempts may even cause the Cedi to depreciate further. It’s clear that we need more effective measures to stabilize the currency, and we need them now.

A statement signed by the president of GUTA (the Ghana Union of Traders Association), Dr Joseph Obeng, said, ‘… the Cedi’s depreciation has created a big mess for the business community …’. The union has described the current situation as a crisis. But it’s not just businesses that are suffering.

The cost of living is skyrocketing, and people’s spending power is plummeting. Every day, Ghanaians feel the pinch, having to make do with less money in their pockets. Less money in the pocket means less spending on everything fro
m food to children’s school fees. This increase in the cost of living has been caused by the high rate of Cedi depreciation, high inflation, high electricity and water tariffs, high interest rates, and high taxes.

Last month, according to the Bank of Ghana (BoG), ‘.the BoG remains fully committed to providing stability in the exchange rate for the Cedi. The Bank has enough foreign exchange reserves to support the market, and economic agents should stop engaging in speculative purchases as they will suffer economic losses when the correction occurs’.

The Bank also announced the establishment of a task force to oversee all foreign exchange bureaus and ensure they comply with regulatory standards. This task force’s primary goal is to address illegal operators’ activities in the foreign exchange market and enhance market transparency.

Contrary to what the BoG labels as speculative behavior, individuals and businesses are actually making rational decisions. Investing in foreign currencies, gold, or other precio
us metals in high-inflation environments is a prudent strategy to safeguard wealth, preserve purchasing power, and diversify investments. The allegations about the activities of ‘illegal’ forex traders are a diversion. It’s illogical to blame small-time currency traders for the Cedi’s depreciation.

The BoG and the Government of Ghana’s (GoG’s) consistent failure to deliver on their policy promises has undermined public trust, forcing even humble traders like the local Koko seller to scramble for scarce dollars.

As the Cedi’s value plummets, the prices of everyday essentials like ‘pure water’ skyrocket, making life even harder for ordinary Ghanaians. The BoG speaks, but its words ring hollow. Despite its policy tweaks and assurances, the Cedi’s woes continue.

There is also information in the public domain, fueling Cedi speculation, which the BoG is not addressing. The harsh truth is that the GoG’s borrowing spree has blown up in its face, shutting it out of international capital markets. The same markets th
at once propped up the Cedi with dollar injections now slam their doors shut, leaving the currency to plummet.

In their recent statement, the BoG admits that business sentiment is low, inflation is high, and disinflation is not working. They also admit to missing all targets but claim the targets they were reporting are broadly aligned with targets agreed upon under the IMF programme.

The BoG must confront its role in fueling inflation. Its 2022 financial statements reveal a staggering GHS60 billion loss, with GHS53.1 billion attributed to the GoG’s debt restructuring.

The BoG lent money to the GoG, citing economic stability, but this move only exacerbated inflation, Cedi depreciation, and economic woes. The BoG’s actions contradict its mandate, especially in an import-dependent economy like Ghana. Instead of enabling the GoG’s fiscal objectives, the BoG should have encouraged responsible spending. Now, it’s attempting to correct its mistake with open market operations. The BoG can, and must, do better to
achieve economic stability.

Ghana’s economy is trapped in a vicious cycle of exporting raw materials and importing finished goods, even for products we can produce locally like maize, rice, poultry, and fish. This excessive reliance on imports creates a staggering demand for foreign currency, draining our resources.

Shockingly, over 70percent of containers arriving with finished goods depart empty, equivalent to exporting nothing but ‘air’. While politicians tout occasional trade surpluses as successes, the reality is that these surpluses are mere paper victories, as the value of our exports repatriated to Ghana is negligible.

The depreciation of Ghana’s currency should, in theory, boost exports by making them cheaper. However, despite numerous government initiatives and programmes (PFJ, IDIF, 1W1C, etc.), Ghana’s export capacity remains woefully inadequate, leaving the country heavily reliant on imports.

The BoG can only use its limited foreign exchange reserves to prop up the Cedi, but it cannot generat
e new dollars. The BoG is essentially limited to ‘making the most of what it has’, rather than creating new growth opportunities.

No rational business owner or currency trader in ‘Cow Lane’ will ‘hoard’ US dollars, as they lack the resources to do so. Instead of harassing small-time traders and making empty promises, the BoG and GoG must confront the harsh reality of Ghana’s weak economic fundamentals, which drive the Cedi’s depreciation.

With sufficient foreign reserves, businesses can operate with clarity and confidence, unencumbered by the uncertainty that fuels instability. It’s time to face the brutal facts and address the root causes of the Cedi’s weakness.

By failing to do so, the BoG and GoG fuel speculation, encourage risky behavior, and create market chaos, leading to unrealistic price swings and a never-ending cycle of instability that ensnares everyone.

Source: Ghana Web