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Akufo-Addo showed excellent leadership in tackling effect of coronavirus on economy – BoG Boss

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Governor of the Bank of Ghana (BoG) Dr Ernest Addison has said the government was very swift in its response to the effect of the Coronavirus pandemic on the local economy.

He said also that president Nana Addo Dankwa Akufo-Addo provided excellent leadership by rising up to the challenge that the Pandemic had brought to the economy.

Dr Addison explained that the government decided to do “whatever it takes” to minimize the impact of the Pandemic on citizens including a stimulus package of over GHc11.2 billion to address the social and economic consequences.

To complement the fiscal policy actions, the Bank of Ghana deployed its various tools, namely interest rate tool, macro-prudential policies, market liquidity support, and triggered its emergency financing clause to purchase a Government COVID-19 Bond, Dr Addison said 2020 Annual Dinner of the Chartered Institute of Bankers (Ghana) on Saturday, November 28 in Accra.

He told the bankers that “2020 has been a difficult year. After three years of prudent management of the Ghanaian economy, we ended the year 2019 with significant consolidation of fiscal policy, a decline in the rate of inflation, robust build-up of international reserves of the central bank, and stability in the exchange rate. Then come beginning of 2020; the Ghanaian economy was hit with an external shock, the Covid-19 Pandemic, which impacted negatively on global trade, commodity prices, tourism and international capital flows.

“Apart from the public health challenges associated with the Pandemic, it also brought in its wake unprecedented economic consequences with disruptions in global supply chains, and heightened uncertainty in global financial markets. The imposition of restrictions disrupted economic activity. The Pandemic led to general anxiety, volatile expectations, and unprecedented levels of uncertainty, all of which weighed heavily on public policy, at the centre of which is macroeconomic management.”

He added “The Government was very swift in its response and His Excellency the President provided excellent leadership by rising up to the challenge that the Pandemic had brought to the economy. The Government decided to do “whatever it takes” to minimize the impact of the Pandemic on citizens including a stimulus package of over GHc11.2 billion to address the social and economic consequences. To complement the fiscal policy actions, the Bank of Ghana deployed its various tools, namely interest rate tool, macro-prudential policies, market liquidity support, and triggered its emergency financing clause to purchase a Government COVID-19 Bond.

“Specifically, the Bank of Ghana introduced the following regulatory and policy interventions: The Monetary Policy Rate was reduced by 150 basis points to 14.5 percent to complement fiscal policy and provide support to economic growth; The cash reserve requirement (CRR) ratio for banks was lowered from 10 to 8 percent to provide additional liquidity to Banks. This policy measure was expected to free up additional resources of about GHS2 billion for banks and SDIs to lend to critical sectors of the economy; The CRR for RCBs, S&Ls, Finance Houses was reduced from 8 to 6 percent; and from 10 to 8 percent for microfinance companies;

“The Capital Conservation Buffer was reduced by 1.5 percentage points to 11.5 percent and providing capital relief of about GHS1.1 billion for banks; The provisioning requirements for loans categories was reduced from 10 to 5 percent and which translates to about GHS115.3 million in capital relief to Banks; Restrictions were imposed on dividend and other capital distributions for the financial years 2019 & 2020 to preserve liquidity and capital buffers; The deadline for new capital requirement for SDIs (MFIs and RCBs) was extended to December to provide temporary relief to SDIs, given current economic conditions;

“The Bank of Ghana requested Banks to grant 3-12 months moratorium on principal payments on loans granted to customers in the worst pandemic-hit sectors; A reduction in mobile money charges and waiver of transaction fees on minimum transactions (GHS100) and increased wallet limits was agreed with the TELCOS to promote electronic transactions as part of COVID protocols; The combination of these measures translated into a relief of more than GH¢4.0 billion to the economy, and with multiplier effects strong enough to provide the necessary impulse required to contain threats of recession and support economic recovery efforts post COVID-19.”

Source: 3 News

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Prez Nana Addo Unveils Golden Opportunity To Private Sector

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The President, Nana Addo Dankwa has unveiled great golden opportunities to the private sector on the maiden day of his swearing-in.

In his maiden speech, President Nana Addo challenges the private sector to establish the state of the arts industries like the Ekumfi Fruits and Juices factory and produce products which would help cut down on imports in the medium to long term.

The Alliance for Development and Industrialization, (ADI), has learnt that ADB bank, OBTF and KFW have taken up the challenge. Currently, ADB in partnership with OVCF and GIRSAL are supporting various businesses that are related to raw material production and community engagement to meet such a challenge.

In view of this, Ekumfi Fruits and Juice Factory through the support of ADB is expected to expand its out-growers scheme to employ over 3000 workers within the space of 24 months.

It is also estimated that the Ekumfi factory and its allied businesses is expected to generate an annual revenue exceeding US$90million within the next 24 to 36 months. This is still inadequate as the country consumes six times the value and this gives room for other businesses to fill in.

Even if the gab is filled halfway, it is likely to generate GHC2 billion into the economy. It is for other industries to the advantage of this opportunity to the economy could expand.

This also opens the opportunities for the farmer who are into the cultivation of commodities such as citrus, mango, passion fruits, pineapple among others, which is estimated to create more than 20, 000 jobs through the value chain process.

The Ekumfi Juice factory, a wholly Ghanaian indigenous company has secured funding from the ADB bank to support the expansion of its out-grower scheme.

The credit facility which is to finance Ekumfi outgrowing partner company has the mandate cultivate most of the fruits the factory needs. This would help expand the cultivation of pineapples in the central region to over 1500 acres to feed the Ekumfi Juice factory.

Additionally, this facility is expected to help the company move from a single shift production to a two-shift per day, increasing employment at the farms and factory by about 1,000 and 300 respectively.

The move is to make the company commercially more productive and also meet the factory’s daily demand of an average of 8 acres of pineapple.

ADB bank believes it is time that such a facility comes in to possibly augment the supply of pineapple to the factory and also keep the production of the pineapple juice factory afloat. The reason has been that most companies in the country fold up due to lack of raw materials, hence the need to provide six-year guarantee support.

ADB bank provided the guarantee underwritten by Ghana Incentive-Based Risk-Sharing System for Agricultural Lending, (GIRSAL), to get KFW financing through the Out-grower Value Chain Fund (OVCF) of the Ministry of Food and Agriculture (MOFA). ADB ventured into this arrangement because it has seen the good product from the Ekumfi Juice Factory and the way the factory was going to impact greatly on the economy as well as the lives of the people.

The factory is currently the largest and only all-natural fruit juice on the Ghanaian market.

The facility is now the biggest fruits processing factory in West Africa, with the capacity to process 10 tons of fruits per hour putting Ghana on the international radar with regard to the competition of products on the export market.

The Ekumfi Pineapple Processing Factory is the first factory to be constructed within 18 months under the government’s flagship initiative the ‘One District One Factory’ project in line with the President’s vision and support from Ghana EXIM Bank as well as support from other banks.

The factory is sited on a 50-acre land and has 100-metres length and 50-metres width of factory floor space large enough for additional production works.

The GIRSAL set up by the Bank of Ghana is a non-bank financial institution with the objective to de-risk agricultural financing by issuing agricultural guarantee instruments to enhance the total amount of credit to the agricultural and agribusiness sectors.

Source:Peacefmonline.com

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‘I’ll Make Economy More Stable’

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PRESIDENT-ELECT, Nana Addo Dankwa Akufo-Addo, has said his new administration will put in place measures to make the economy more stable.

President Akufo-Addo, who addressed Ghanaians from his private residence at Nima in Accra, said he was committed to making Ghana the beacon of hope for Africa by building a stronger economy.

This was after Jean Mensa, Returning Officer, declared the results of the 2020 Presidential Election.

According to him, the ultimate goal of his second tenure will be to grow the country in all fronts and improve the livelihood of all Ghanaians.

“My immediate task will be to continue with the process of reversing the effects of COVID-19 effects on our economy and on our lives. And put the nation on course for full economic recovery and development,” the President said in his victory statement.

“Before the pandemic struck, Ghana in recent years was among the fastest growing economies in the world. I give you my word, we will regain that reputation,” President Akufo-Addo emphasized.

The President further noted, “Just as I have been doing since January 2017, I give you my word that I will continue to work very hard to build a prosperous and progressive Ghana for which we are here.”

Forecasts

Various economic forecasts by the International Monetary Fund, the World Bank and international research institutions and credit agencies have revealed that the Ghanaian economy will grow strongly at about 4.8% in 2021 despite the expected challenges with respect to the fiscal economy.

This is expected to provide opportunity for the economy to mobilize more revenue to take care of budget financing and repayment of debts amongst others.

President Akufo-Addo won the 2020 elections with 51.59 per cent of the votes on the ticket of the New Patriotic Party (NPP), adding that “the decisive margin of victory in this election constituted for me an endorsement of policies and programmes initiated by my government and put before the electorates. And I am determined to, in all my power, accomplish the task of this new mandate and thereby justify the confidence reposed in me.”

He assured all Ghanaians that he would do his best for everyone, and therefore would not let anyone down and urged all Ghanaians irrespective of their political affiliations, ethnic backgrounds, amongst others to support his government to deliver results for all.

By Jamila Akweley Okertchiri

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Govt Considers Investor -Friendly Reforms

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GHANA’S PLANS to overhaul its regulatory system and establish a one-stop shop for investors as part of broader efforts to boost FDI, are explored in a new Covid-19 Response Report (CRR) produced by Oxford Business Group (OBG) in partnership with the Ghana Investment Promotion Centre (GIPC).

The CRR charts the steps taken to enhance Ghana’s business environment by promoting transparency and accountability, which include the launch of an online delivery tracker documenting progress of the government’s infrastructure projects.

Other topical issues examined include the national push to improve food security and self-sufficiency, which have taken on added importance since the arrival of the virus and will be driven forward through large-scale agricultural modernization efforts.

The Covid-19 Alleviation and Revitalization of Enterprises Support (CARES) programme, an expansive GH¢100 billion economic response and development plan, is another key focus of the report. Aspects of this wide-ranging, two-phased initiative analyzed includes the country’s plans to bolster the healthcare system, boost support for businesses, introduce a national unemployment insurance scheme and provide retraining initiatives.

Ghana’s infrastructure projects and the opportunities they present for investment are also given extensive coverage. Subscribers will find details of the many major initiatives in the pipeline, led by the six-phase Railway Master Plan, road developments, bridges, hospitals and homes.

The CRR includes interviews with high-profile personalities from across the public and private sectors, including Mahamudu Bawumia, the Vice-President of Ghana.

In an interview, Dr Bawumia shares his thoughts on the economic sectors most in need of investment, the part that digital solutions will play in transforming Ghana and how the country can leverage its location as the headquarters of the African Continental Free Trade Area Secretariat.

“We believe our country has the potential to be a hub in many areas such as petrochemicals, financial services, education and digital services,” he told OBG. “We have achieved a lot in recent years regarding digital services in particular. We are now at a stage where we have all infrastructures in place and will be connecting it in 2021 to achieve a fully interconnected system across the country.”

Yofi Grant, the CEO of GIPC, added that “with the African Continental Free Trade Area Agreement set to commence in January 2021, our strategy will be geared towards impact investment and targeting investors in sectors that will give Ghana the competitive advantage needed in the Fourth Industrial Revolution.”

Karine Loehman, OBG’s Managing Director for Africa, said that while fallout from the pandemic had weighed heavily on Ghana, exacerbated by declining oil prices and significant global trade reductions, a survey of C-suite business executives in the country conducted by OBG in September and featured in the CRR suggested companies were resuming their operations and upbeat about the future.

“With a combined 63% of companies already operating at or above 60% capacity, 79% of business leaders expected their company to be operating above those levels by January 2021,” she said, adding, “Company revenue forecasts for the next 12 months are also encouraging, with 40% of respondents expecting returns to be steady and 25% indicating higher or much higher revenues.”

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