Features
Economic recovery on course
Ken Ofori Attah
There is no doubt that, in spite of the current economic challenges, the government is working hard round the clock to ensure an effective economic recovery in order to make things better for Ghanaians in the country.
It is an indication of the determination of the government to surmount the obstacle that is affecting the country today. What makes us hopeful is that, in spite of the economic difficulties facing the country, developmental projects in all parts of the country are still ongoing.
Technical, Vocational, Engineering and Technology education (TVET) is going alongside the free SHS being implemented with maximum alacrity. Other projects, such as the new regional and district hospitals as well as the promotion of electricity and water in various parts of the country, among others, are ongoing. Again, electricity supply has been relatively constant compared to what was experienced previously under what became known as “Dumsor”.
In other parts of Africa, for instance, power outages have become a common phenomenon. The cases of South Africa, Nigeria and a few other African countries testify to this fact.
COUNT OUR BLESSINGS
It is for this reason that people in Ghana must be happy and hopeful for happy days ahead. We need to count our blessings one by one.
It is true that economic conditions are very tough, but from all indications, every effort is being made to bring the situation under control. The Debt Restructuring Programme by the government is meant to bring the situation under control in order to push forward positive growth and this is the reason why the government is still negotiating with its creditors to bring the debt level under control.
The Domestic Debt Exchange has been completed successfully. In the same way, efforts are also being made to enter negotiations with our foreign counterparts to bring the situation under control as far as the foreign debt level is concerned.
The debt level has gone up not because of any reckless spending. Rather, they went into the building of schools, both technical and grammar education, the provision of water and electricity for the people, the construction of roads and many others.
This is a country that has proven to be responsible as far as developmental projects are concerned. It is believed that very soon, positive economic results will be encountered.
NEGOTIATIONS ON DEBT RESTRUCTURING
Finance Minister Ken Ofori Atta went to China to have negotiations on debt restructuring with officials of that country. Sources say the Minister went via Addis Ababa, where he attended the UNECA High-Level Ministers meeting on Global Financial Architecture. After that meeting, Mr Ofori-Atta headed to China on March 22, 2023.
The Minister who led the government delegation had bilateral talks with China as well as seek financial assurances for Ghana’s programme with the International Monetary Fund. This is an indication of the great effort being made by government to normalise the economic situation of the country and make it better.
The trip was postponed to the end of March because it coincided with the National People’s Congress of China meeting in early March 2023. The Minister of Finance has already held meetings with officials of Exim Bank China in Ghana, all in the line with re-profiling the country’s debt to China.
GENERATION OF FUNDS
The government is also working hard to derive enough money from Treasury Bills in order to keep things going. We therefore need to be hopeful because all these efforts are yielding the desired results in line with the economic recovery.
The Government of Ghana secured GH¢3.88 billion from the sale of treasury bills in its latest auction held on March 10, 2023. This was an oversubscription of the GH¢1.10 billion it was targeting.
However, interest rates have dropped significantly to 18 per cent. According to the auction results from the Central Bank, the government secured GH¢2.90 billion from the 91-day bill and GH¢972.49 million from the 182-day bill. The subscriptions surpassed the government’s set target of GH¢2.775 million but it sold more than the GH¢3.31 billion secured by the government in last week’s auction. Interest rates, however, reduced to 18.52 per cent for the 91-day bill, 22.8 per cent and 21.27 per cent for the 182-day bill.
CONFIDENCE IN ECONOMY
The oversubscription is an indication of great confidence in the Ghanaian economy. If there had been no confidence, there would have been undersubscription. This goes to show, among others, that things are on course for rapid recovery.
The fall in rates has been attributed to the successful debt restructuring program. According to the government, the Domestic Debt Exchange programme has accounted for the reduction in the rate of Treasury Bills from 35 per cent to 24 per cent.
There is therefore no doubt that things are gradually stabilising and getting better. If this is the case, then let us have confidence that, as long as we are on the right path, Ghanaians will soon smile.
What we are all seeking is for inflation to fall to a level that is lower than what it is now. If this happens, and it will surely do so, the economic recovery programme will move at a faster rate than it is now.
INFLATION
Inflation could fall sharply to below 40 per cent by the end of April 2023. According to a Senior Credit Research Analyst at REDD Intelligence, Mark Bohlund, his base effects analysis indicate that “inflation will fall by more than 10 percentage points by April 2023.”
The fall in inflation will not happen by mere chance. Rather, it will come about as a result of pragmatic steps taken by the government to achieve that purpose.
“The inflation rate has declined for two straight months and may fall more sharply to below 40 per cent by the end of April due to base effects,” said Mark Bohlund, a senior credit research analyst at REDD Intelligence. Bloomberg said the Ghana cedi, which whipsawed in 2022 over concern about its ballooning debt load and then optimism about a provisional International Monetary Fund bailout, has been relatively steady this year, helping to keep inflation in check.
ECONOMY TO BOUNCE BACK
In conclusion, therefore, the economic situation being experienced in Ghana is tough, admittedly, but the government has taken the right steps to ensure that positive results are achieved as early as possible. We must all therefore be hopeful that, as President Akufo Addo has said, the economy will surely bounce back.
Ghana will not continue to stay in this economic situation. We must therefore be hopeful in light of the ongoing recovery efforts that are taking place thanks to the bold economic steps put in place by the government.
The economic recovery is surely bound to occur within a short time, so we must all support the government with prayer and action in our daily practical dealings so that things will be better for all of us.
Email address/WhatsApp number of author:
Pradmat201@gmail.com (0553318911)
By Dr Kofi Amponsah-Bediako