Ghana Post Elections

The Ghana cedi is now the worst-performing currency among Africa’s top currencies just two months into 2022. This is because it has depreciated by about 7.6% to the dollar from January 1, to February 25, 2022. The local currency has overtaken the Zambian kwacha, which was the worst-performing currency on the continent two weeks ago. Both Ghana and Zambia have challenges in addressing their escalating debts as well as struggling with revenue mobilization and expenditure management. This puzzle is impacting negatively on the country’s exchange rate, interest rate and inflation. The recent downgrade of the country’s ability to borrow is also a major worry as investors are still unsure about the outlook of the Ghanaian economy. This affirms some economists and analysts’ assertion that all concerns regarding the Electronic Transaction Levy must be addressed and passed immediately by Parliament. But there could be some hope going forward as the World Bank Group has approved a five-year...

Former Deputy Finance Minister, Cassiel Ato Forson, has pleaded not guilty to the charge of causing a €2.3 million loss to the state. Two other accused persons, Sylvester Anemana, a former Chief Director at the Ministry of Health and Richard Jakpa, a businessman, also pleaded not guilty. The three were granted bail in sums totaling Gh¢8 million. The case relates to the procurement of some 200 ambulances by the Prof. John Evans Atta Mills and John Mahama governments. Documents filed by the A-G traces the events culminating into the alleged crimes, from a 2009 announcement during a State of the Nation Address of plans to procure ambulances for the country. The A-G says following this address, the Ministry of Health (MOH) initiated action to acquire more ambulances. The third accused person, Richard Jakpa, is said to have used his company, Jakpa at Business, to present a proposal and term loan to the Health Ministry, which he claimed to have arranged from Stanbic Bank to finance the suppl...

Government will borrow ¢3.78 billion in the first quarter of this year to finance part of the budget, its Issuance Calendar has revealed. For the first three months of 2022, the government of Ghana plans to issue a gross amount of ¢24.5 billion, of which ¢20.7 billion is to rollover maturities. This indicates that the government’s debt level is not going to reduce anytime soon. As usual, most of the funds to be mobilised will come from the 91-day Treasury bills, a move that has helped reduce foreign debt but rather crowded out the private sector from access to financing on the domestic market. According to the data, the government will borrow as much as ¢11.3 billion of the 91-day T-bills during the period, higher than the previous quarter. It will be followed by the 182-day T-Bills in which a total of ¢3 billion will be mobilised. Then, finally, the biggest of ¢1.6 billion will be issued in March 2022. ¢2.15 billion will, however, be mobilised from the 364-day bills. The majority of t...

The International Monetary Fund is maintaining its 6.2% forecast of the expansion  of the Ghanaian economy in 2022. This is bigger than the 4.7% growth rate it projected for the country last year. Though it did not give reasons for the projected high Gross Domestic Product for this year, the expected increase in economic activities, following further easing of Covid-19 restrictions will trigger that. Improved aggregate demand and supply of goods, exports as well as government and household spending will influence the expansion of the economy, which before the Covid-19 pandemic had been growing at a rate of about 6% on the average. In its October 2021 World Economic Report, the IMF said Ghana’s economy will grow at a rate of 6.2% in 2022. This is higher than forecasts by research institutions, sighted by Joy Business . The higher growth rate indicates that businesses will be able to generate more revenue from sales and expand into the future. Industry is expected to pick up this yea...

  The Concerned Drivers Association of Ghana (C-DAG) has announced a 40% increment in transport fares across the country from Monday, January 17, 2022. In a press release dated January 10, the Association noted that the upward adjustment has been necessitated by the unbearable hardships facing drivers currently. “It must be noted that we commiserate with Ghanaians on the current economic hardship, but in order to keep us in business, we are left with no other option but to adjust transport fares a little upward, which is a 40% increment,” part of the statement reads. C-DAG stated that the increment is influenced by many factors, including fuel price at the pumps, the increase in vehicle prices, and the increment of spare parts and lubricants. “It must be noted that we also experience the economic conditions of the country. It has become extremely difficult for us to manage our homes as prices of basic commodities, including sachet water, have also seen an upward increment,” they ad...

  The Ghana cedi is expected to end 2022 at ¢7.03 to the US dollar, the Center for Economics, Finance and Inequality Studies of the University of Ghana has projected. According to the Center, its forecast of the end-year depreciation of the cedi to the dollar is 99% accurate. This means that the cost of operations of businesses, particularly manufacturing, will go up. This will consequently trigger increases in prices of some goods on the market, and for that matter inflation. The Centre therefore wants the Bank of Ghana to supply enough forex to meet the demand of the dollar as it appears the current forex auction strategy is not meeting the market demand for forex. “This view of inadequate supply of forex is gleaned from the wide disparity that exist between Bank of Ghana’s forex quote and the interbank quotes. The similar disparities in quotes among banks at the retail level also indicates the inadequate supply of forex on the market”, it pointed out. Over the medium term, the C...

Ghana’s total expenditure in 2022 is projected at ¢128.3 billion which will be 25.8% of GDP. Data from the Ministry of Finance indicate that total expenditure (including payments for the clearance of arrears) is projected at ¢128.3 billion (25.8% of GDP) in 2022.   This means government expenditure in 2022 is expected to increase by almost 13% relative to the ¢113.8 billion expenditure in 2021. In terms of revenue mobilization, government intend to raise an amount of ¢89.1 billion (17.9% of GDP) for 2022 and represents a nominal growth of 23% over the projected outturn for 2021. Further analysis shows that the overall budget deficit (including finsec and IPPs cost) is projected at ¢39.2 billion (7.9% of GDP) for 2022. The ministry also noted that for the second time in a row, interest payments are expected to be higher than compensation of employees. “Interest payments is projected at ¢37.2 billion (7.5% of GDP) in 2022”. Additionally, “compensation of employees is projected t...