The Composite Index of Economic Activity is Improving, So What, says the Informal Sector

By Sydney Casely-Hayford, Sydney@bizghana.com

The Bank of Ghana (BoG) uses an aggregate of indexes, grouped and called the Composite Index of Economic Activity (CIEA) to guide the Bank’s Monetary Policy Committee in its bi-monthly report and policy interest rate setting.

The CIEA gets little mention in the financial press compared to its more well-known counterpart the Gross Domestic Product (GDP).  The GDP is produced by the Ghana Statistical Service (GSS) and the CIEA is a BoG product.  However, according to the Monetary Policy Analysis Division of the BoG, the CIEA tracks the GDP very closely and is taken by the BoG as a very good indicator of business confidence.

Once a month the Monetary Policy Analysis Division (MPAD) of the BoG undertakes a real sector survey of the economy.

Let me explain the CIEA a little more.

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).

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.

Critical News 18th July 2010

The week in Ghana ends with the JoyFm political news program “Newsfile” now hosted by Kwaku SakyiAddo.  Last week, the studio raged with the Rawlings’ home situation after Nana Konadu had come on air to tell Ghanaians how she and his “Jerryship” were not living together because Government had until now not given them alternative accommodation.  Well, it turned out not to be exactly true, but the two and a half hour discussion took up most of the three-hour program and other news was left to fester till the this week.