Business in Ghana

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Posts Tagged ‘Interest rates’

Batakari For My Jacket. Critical News, 10th May 2015

Posted by Business in Ghana on May 10, 2015

Sydney Casely-Hayford, sydney@bizghana.com

On Tuesday, 31st May 2011, I organized and hosted a program I called The BiG Debate. We looked at the issue of high bank interest rates and its impact on Ghanaian businesses.

At that time, with bank interest rates as high as 30% in some cases and spreads ranging between 12% and 15%, banks continued to make high profits despite the claim that non-performing loans were a restriction on their performance and a key reason for less lending.

But there were other related arguments suggesting that Regulators, Government, Borrowers of Funds, Lenders to the banking sector as well as Bank’s own weak accounting all contribute in large measure to the persistently high lending rates in Ghana. Clearly, our stuttering economy would benefit from lower borrowing rates in the market place.

How to intervene and trigger a downward spiral in favor of the borrower has eluded analysts, Government and Donors. The BiG Debate attempted to identify the intervention points and offer answers to Government.

Treasury Bill rates were at 10%, and the competing business of risk lending took a back-step while Banks diverted deposits into 91-day bills and quicker profit yielding trade.

Two years on, the T Bill rate is at 25% and the situation is worse now than it was then. Read the rest of this entry »

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Africa Attractiveness Survey: Africa’s Share of Global FDI Increases Over the Last Five Years

Posted by Business in Ghana on May 6, 2013

Global share of FDI up but project numbers down in 2012

African GDP expected to be 4% in 2013 and 4.6% in 2014

JOHANNESBURG, South-Africa, May 6, 2013/ Africa’s share of global foreign direct investment (FDI) has grown over the past five years highlighting the growing interest from foreign investors, according to Ernst & Young’s third Africa Attractiveness Survey (http://www.ey.com/za), released today.

The report combines an analysis of international investment into Africa over the past five years with a 2013 survey of over 500 global business leaders about their views on the potential of the African market. The latest data shows that despite a fall in project numbers from 867 in 2011 to 764 in 2012 — in line with the global trend — project numbers are still significantly higher than anything that preceded the peak of 2008. The continent’s global share of FDI has also grown from 3.2% in 2007 to 5.6% in 2012.

Mark Otty, Ernst & Young’s EMEIA Managing Partner comments, “A process of democratization that has taken root across much of the continent; ongoing improvements to the business environment; exponential growth in trade and investment and substantial improvements in the quality of human life have provided a platform for the economic growth that a large number of African economies have experienced over the past decade.” Read the rest of this entry »

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IMF Concludes Article IV Consultation Mission to Ghana

Posted by Business in Ghana on April 12, 2013

Press Release No. 13/117, April 12, 2013

A mission from the International Monetary Fund (IMF), led by Christina Daseking, visited Accra during April 2-12, 2013, to conduct discussions for the 2013 Article IV consultations. The mission met with President Mahama, Vice-President Amissah-Arthur, Finance Minister Terkper, Bank of Ghana Governor Wampah, other senior officials, members of parliament, and representatives of the private sector, think tanks, trade unions, and civil society.

At the end of the mission, Ms. Daseking issued the following statement:

“Economic growth continued at a robust pace of 8 percent in 2012 amid rising fiscal and external imbalances. A growing public sector wage bill, costly energy subsidies, and higher interest cost, pushed the fiscal deficit to about 12 percent of GDP. The external current account deficit also widened to 12 percent of GDP, while unadjusted fuel and energy prices and a tightening of monetary policy helped keep inflation in single digits. Read the rest of this entry »

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The Relevance Of The Monetary Policy Rate In The Monetary Transmission Mechanism

Posted by Business in Ghana on August 5, 2012

Source: Center for Policy Analysis.  http://www.cepa.org

In May 2007 the Bank of Ghana formally adopted inflation targeting (IT) as the framework for stabilizing prices within the economy. Since then, significant progress has been made in developing the policy framework as well as the institutions and markets that underpin its implementation _ money and capital markets have been developed, there is a framework for forecasting liquidity, and a broad range of instruments with which to conduct monetary policy is available.

The monetary policy tool of the BOG is the monetary policy rate (MPR) _ the rate at which commercial banks can borrow from the central bank _ and it is set at a level that is consistent with meeting the BOG_s inflation target. The MPR, thus, is expected to communicate the stance of monetary policy and act as a guide for all other market interest rates. Read the rest of this entry »

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

Posted by Business in Ghana on October 30, 2011

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. Read the rest of this entry »

Posted in Financial Services, Sydney Casely-Hayford | Tagged: , , , , , , , , , | 3 Comments »

Government Must Tackle Seriously This Outrageous Interest Rates

Posted by Business in Ghana on November 3, 2010

By Ben Ofosu-Appiah

“Deposit your money with a commercial bank in Ghana and the interest you earn on it can be as low as 7%. Borrow money from a commercial bank in Ghana and you will be faced with an interest rate of 30% or higher.” This was how a friend recently put it. Why are interest rates in Ghana so outrageously high and the Bank of Ghana and the government not doing anything about it? Read the rest of this entry »

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