Chinese Money, The New Safety Net

By Sydney Casely-Hayford, Sydney@bizghana.com

Two weeks on 11^th December, I made the argument that Government had no choice than to raise fuel prices. http://thenewghanaian.wordpress.com/2011/12/11/expect-fuel-price-hike-soon/

I also said this would happen after Christmas or in the New Year and I predicted at least a 15% hike.  I was spot on.  December 29^th, Government announced 15% increases in petroleum prices, except for Kerosene and Premix.  Both these subsidized fuels are “political fuels” used to stave off the inevitable rebellion by the poor but radical fisher folk.

Expect Fuel Price Hike Soon

By Sydney Caasely-Hayford, Sydney@bizghana.com

A recent decision by an Accra High Court could have misunderstood the use of the Ex-refinery price differential In the calculation of fuel pump prices and this may force Government to raise retail pump prices if the National Petroleum Authority (NPA) loses its appeal and Government is mandated to carry out the court order.

Simply explained, the court ruled that the ex-refinery differential used in the calculation of the fuel prices is a form of tax and must therefore have Parliamentary approval before implementation.  The detail of the case is captured in a series of articles in most Ghana media.

If you delve a little deeper into the calculation of retail pump prices made available by the NPA and in the public domain, you notice that the ex-refinery differential is used to reduce the final pump price rather than increase it.  In effect, it is a subsidy not a tax.

International Monetary Fund expands lending tools

The International Monetary Fund (IMF) has announced new measures to help countries protect themselves from the eurozone debt crisis.

The Precautionary and Liquidity Line (PLL) is designed to help countries with “sound economic fundamentals” meet short-term financing needs.

To qualify, countries must also have “sound policies”.

Italy and Spain have seen their borrowing costs spike on fears they may fall victim to the debt crisis.

Earlier on Tuesday, Spain raised 2.98bn euros ($4bn, £2.6bn) in an auction of three- and six-month bonds, but at much higher yields than in a similar auction last month.

IMF Technical Assistance Finds A Teachable Moment in Africa

Source: IMF Survey online

Stephen George is a public high school principal worried about the usual things: how students will fare on upcoming exams, crowded classrooms, and how to make sure his teachers get paid on time.

George has his work cut out for him. Matilda Newport High School in Monrovia, Liberia on the west coast of Africa has all the usual stresses that keep high school principals around the world awake at night, and then some.

The civil war wreaked havoc on daily life for the almost four million people in the small West African country. Roads and buildings were destroyed, people were displaced from their homes, and schools shut their doors.

Africa Should Cut Reliance on Commodity Exports—Ministers

Source: IMF Publication

Africa should broaden its economic base and not remain so dependent on commodity exports for its growth, African finance ministers said during the IMF-World Bank Spring Meetings in Washington.

Four ministers told a press briefing that diversification into more labor-intensive industry would make Africa’s growth less volatile and more inclusive.

So why all the Fuss about Ghana’s 2011 Budget?

Courtesy of IMANI (www.imanighana.org) and AfricanLiberty.org

Ghana’s latest budget has been met with uproar in some quarters.

There is no dismissing or diminishing the fact that under trying circumstances the ruling government has been working hard to balance its books and stabilise the economy.  There may be some disputes over the precision of measurements and accounting conventions, but the evidence does point to some clear successes on the macroeconomic front.

The strengthening cedi has of course led to a significant boost in imports, but in real terms (accounting for inflation) the increase is in line with recent trends in the current account, and is thus not exactly scary (which is what you would expect if the currency had been artificially overvalued).

UN Official Says Resources, Policies And Leadership Key To Achieving Anti-Poverty Goals

From www.undp.org

Countries can make headway on slashing hunger, poverty and a host of other socio-economic ills over the next five years, the head of the United Nations Development Programme (UNDP) said today, stressing three essential elements for progress.

“With sufficient and predictable resources for development, the appropriate policies, and strong leadership and capacity, we do believe that the MDGs and other internationally agreed development goals can be met,” Helen Clark stated, referring to the Millennium Development Goals (MDGs) which world leaders have pledged to achieve by 2015.

A Snap shot of the World Bank and IMF Annual Meetings: How to achieve a world without poverty!

By Franklin Cudjoe, Washington, D.C., www.imani.org

The World Bank and the IMF have not had many friends in the developing world since post-Structural Adjustments days, when their advice and interventions, largely backed by aid yielded slow and negative growth.  It is the case though, that dealing with the two Bretton Woods institutions is like loaded dice. In one breadth they provide you with advice, and then in another, they continue to support countries that fail, even when their failure did not originate from bad advice, but essentially rooted in disrespect for the most basic institutions needed to effect real change.

Take Ghana, for instance.  Not all the IMF and World Bank’s involvement in our mostly self-inflicted tottering economy in the 1980s come to doom and gloom? There were significant gains, which could have been used to diversify our agrarian based economy- yet we watched politicians splurge most of the gains on the 1992, 1996 and 2000 general elections. And just when our strangling debts were paid off, with a promise to ‘taking off’ into the middle income bracket, we watered down the gains again in 2008, with a world record deficit of almost 20% to GDP- mostly incurred as a result of light-speed spending, mainly outside of the budget and ostensibly to chase political votes.

NDC, Lying With The Truth

A year ago on 10^th July 2009, I wrote an article attacking NDC public truths. NDC Big and Small Lies Will Un-Make the Party.   Actually walking the soil and riding Mass Metro Transit, Tro-Tro and taxis in Ghana, trying to make sense out of the complex economic chains, is an eye opener of how the macro and micro economic environments are separate from each other.  Ghana is two economies.  The macro numbers, which capture the attention of academia, the donor community and the regulatory authorities and the micro economy, where 80% of Ghanaians live and struggle to make a living.  In stark contrast to each other, visualize the banking hall of Stanchart, Ecobank, Barclays or any of the others and juxtapose that against the trade paths in Makola and Mallam markets or the lines of kiosks on the road sides of Odorkor and Palladium and other peri-urban communities.