Business Analyst - July 5

Tuesday, July 5, 2022
IMF bailout…
Govt justifies decision
• Continued from front
ongoing Russia-Ukraine war.
“COVId-19 is the primary reason. It was a
global challenge…the twin crisis [also
affected us], and it’s a matter that is a wellknown
problem”.
He said until these two global crises, the
government was working assiduously to put
the ailing Ghanaian economy back on track
after it assumed office.
Mr. Oppong Nkrumah gave the
• Insists Covid and Russia-Ukraine
war are primary reasons
justification while speaking on the Citi
Breakfast Show yesterday which was
monitored by Business ANALYST
Ghana’s economy, he said, was
performing comparatively better but was
plagued by some major macroeconomic
distortions, thereby throwing the economic
buffers created off gear.
He further attributed the current
situation to the recent economic downgrade
by international rating agencies.
“Beyond the twin crisis, our domestic
program which was what will ordinarily
help us respond, so we do not go for a balance
of payment support, has also been
challenged. One of the major things that
have affected us is our downgrade [by
international rating agencies], therefore our
inability to get access to the international
market,” he noted.
It would be recalled that The Ministry of
Information on Friday, July 1, 2022,
announced that President Nana Addo
dankwa Akufo-Addo had given approval for
Ghana to begin engagements with the IMF
for a bailout.
According to Mr. Oppong Nkrumah, the
Minister for Finance, Ken Ofori-Atta, will be
leading the negotiations with the IMF in the
coming days. That news has since been
received with mixed feelings.
This will be the 17th time Ghana was
going to the IMF for help. The 16th time was
under the John Mahama administration in
2015 and ended in 2019.
“The Fund is not a single bullet to
answer all the questions that we have but if
they can come to support the program that
we have on the table. The President has
made that decision and we have started
putting in place the mechanisms,” Mr.
Oppong Nkrumah added.
NPP group calls for
immediate reshuffle
over IMF bailout
Loyal patriots, a youth group in the New
Patriotic Party (NPP) is calling for a
reshuffle in the NPP administration.
A statement co-signed by the Chairman
and the secretary for the group,
Bernard Okyere Opoku and Maxwell
Agyei-Nyanor, noted that it has become
a known and accepted fact that the current
general economic situation in the
world is hurting and Ghana is also experiencing
its worst of the economy.
According to the group, there are
both internal and external factors responsible
for the economic difficulties
we find ourselves in as a nation which
has necessitated the country seeking to
subscribe to the International Monetary
Fund (IMF) for a bailout.
They added that “These factors include
but not limited to non-linkages of
government programmes, unstable currency,
domination of our productive sectors
by foreigners, and our people's
penchant desire for foreign-made goods
which are not being regulated or tackled
by the government and most importantly,
non-performance of some government
appointees.
The group says Akufo-Addo has not
caused any major reshuffle since NPP
assumed office and that it will be appropriate
if he makes some changes immediately.
” It is a common observation that
some appointees of the government are
sleeping on the job and it has become
the concern of most political watchers
and even the ordinary man on the
street. Most of these appointees by their
actions and inactions believe that they
are untouchable.
“Their reasons, one cannot easily put
a finger at but obviously points to the
fact of close association with people
who wield a lot more powers in the corridors
of power in the government.
“What should be done and must be
done by the President is to cause reshuffle
in his government and go a step further
ahead to relieve some appointees of
their portfolios but he hasn't done that,”
a statement from the group said.
Ghana has significant role to
play In financial integration in
West Africa – BoG Governor
THE Governor of the Bank of Ghana, dr.
Ernest Addison, says Ghana has a significant
role to play in the integration of the financial
system of ECOWAS.
This process includes capital market
integration, regional currency convertibility/quoting
and trading national currencies,
harmonisation of the legal and
regulatory frameworks of the banking sector,
harmonisation of legislation; and
cross-border payments system integration.
Speaking with the business and finance
committee, the Governor said the
implementation of these reforms would
ensure the development of a robust financial
sector in Ghana to participate in funding
trade transactions presented through
the African Continental Free Trade Agreement
(AfCFTA) platform.
“Ghana’s financial sector can play a
pivotal role in leveraging AfCFTA to boost
the country’s socio-economic development.
This can be achieved through investments
in infrastructure and financial
technology to support regional trade transactions.
These favourable conditions
and Ghana’s position as the gateway
to West Africa, among other factors,
earned Ghana the rights to host the
AfCFTA Secretariat”, he mentioned.
He said that Ghana’s banking
sector is currently well capitalised,
with adequate liquidity to support
transactions generated through increased
trade.
The Central Bank has also put in
place robust regulatory and supervisory
frameworks to support in-country
and cross-border trade
transactions.
There are also policies and safeguards
to reduce Anti-Money Laundering
and Combating the
Financing of Terrorism (AML-CFT)
activities and create a robust and
sound financial system to support
regional trade. Ghana’s financial
sector can therefore be instrumental
in meeting the funding needs of businesses
in the country to trade under the
AfCFTA umbrella.
In response to the opportunities that
the AFFTCA presents, the Governor said
commercial banks are required to
strengthen all risk management systems
and scale-up capacity in trade finance to
support the private sector.
Additionally, banks and non-bank financial
institutions are encouraged to increase
investments in digitisation
platforms as well as cyber-security systems
to facilitate safe and secure trade transactions
through AfCFTA. These institutional
developments should complement the
PAPSS and MANSA platforms through
which Afreximbank will work with local
businesses and financial institutions to
help facilitate intra-Africa trade.
dr. Addison concluded, urging, all financial
institutions to collaborate and take
advantage of the opportunities offered
through AfCFTA to boost the country’s
trade efforts.