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Cedi Depreciation: It’s time to seek lasting solutions – Terkper

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Cedi Depreciation -It’s time to seek lasting solutions – Terkper

Cedi Depreciation: It’s time to seek lasting solutions – Terkper

Former Finance Minister under the erstwhile Mahama administration, Seth Terkper says it is time the managers of the economy and other relevant stakeholders focused on the issues that affect the cedi leading to its constant decline against other major trading currencies, particularly the dollar.

Seth Terkper believes the time is right to have a discourse devoid of politics as the nation like that which the nation witnessed prior to the 2016 elections when the performance of the currency was very topical.

He agreed that the issues confronting the cedi cannot be said to be specific as the economic conditions at different times affect its performance, however, there are some solutions that could be put in place in the short, medium and long term to check its performance.

The Ghana Cedi has declined close to 13% since December against the US Dollar and currently sells at about GHC5.56 to the Dollar.

This has caused many to raise eyebrows, particularly when prior to their election in 2016 and shortly after, Vice President Bawumia and other government spokespersons touted their competence in managing and improving the fortunes of the currency.

“I think it is time for sobering reflection by everybody because the Cedi was subject to intense debate and discussion during the last election and I don’t want to go over this, together with issues like I will not borrow when I come office, together with issues like we can arrest the Cedi, we know the fundamentals, so I think it is time for sobering reflections by all of us. It is good you have gone back and I think one of the lessons from going back is that there aren’t same set of issues, some will be similar some will be same but the economic situation differs from one time to the other but I think comparing the headlines is good,” he explained.

The Former Finance Minister added “It is time to focus on the issues collectively and look at the solutions. What solutions can be short term and what solutions over time will increase the supply of foreign currency because it is a question of people need the Dollars to pay for imports and that is the demand side, and there are the cocoa farmers, the miners and others who are boosting the supply.”

The Cedi under the former Finance Minister’s watch in 2014 depreciated by about 33% and 22% in 2015. This resulted in the release of forex into the economy by the Central Bank and issuance of “Home Grown Policies” and also the IMF deal.

Comparing the situation of the Cedi decline during his tenure and what the nation is experiencing now, Seth Terkper was baffled that the currency is experiencing such fall despite the amount of forex available to the government.

He said between 2017 and 2018, the government has had close to 200% more foreign exchange into the economy largely due to Oil prices and Cocoa prices.

On the back of this, he is convinced there is more to the current situation than is being speculated and has called for more open discourse about the matter to identify the challenges and institute appropriate measures.

The Former Finance Minister recounted, “from the end of 2015, 2016 when we had this crisis, when the prices went down output went down. The supply of foreign exchange from Oil was $500 million. Today, we are making about $1.8 billion from crude oil alone to compliment cocoa. That is why I mentioned the period. What is it that may be going on that we may not know? Considering that if you compare the period now from back then, there is more supply into the economy, so what is it that is not working?”

His call for broad discussions about the declining currency comes at a time when renowned economist, Dr Nii Moi Thompson has made similar proposal arguing that no single government has the brains to solve the currency and economic challenges of the country.

Source: awakenewsonline.com

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Poor records and non-existent data pose challenge to debt recovery – Governor

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Poor records and non-existent data pose challenge to debt recovery - Governor

Poor records and non-existent data pose challenge to debt recovery – Governor

Dr Ernest Yedu Addison, the Governor of the Bank of Ghana, has stated that poor records and non-existent data has become a major challenge to receivers of the nine collapsed banks to recover debts owed to people and institutions.

He said out of the total loan debt of GH¢ 10.1 billion owed to people and institutions by these banks prior to the revocation of their licenses, only GH¢ 731 million have been recovered through loan repayment by customers, placement, liquidation of bonds and income and other income sources, leaving a balance of about GH¢ 9.3 billion yet to be recovered.

Dr Addison, addressing issues on the Banking Sector reforms at the fourth CEO Summit in Accra, said the difficulties had limited the effectiveness of the receivership process and delayed its outcomes.

He the situation had led to an engagement of the judicial system by the receivers to help in the recovery of certain assets from shareholders, directors and other loan defaulters.

He said there were currently about 50 cases pending before various courts across the country, but despite the efforts, the recovery process was being challenged by acts of some individuals involved, who had resorted to some measures to frustrate the system.

Dr Addison mentioned some of the challenges to include poor records, which made it difficult for receivers to identify and pursue some of the loan defaulters due to insufficient or non-existent information on their transactions.

He further explained that investigations so far had shown that some assets were not registered in the names of the financial institutions, but in the names of connected parties, making it difficult to dispose the underlined collaterals to offset their outstanding loans.

The Governor underscored the critical role of the judiciary in ensuring efficient adjudication in commercial cases, but said the country would not be able address some of the problems associated with the poor structural regime concerning Non-Performing Loans if the courts failed to adjudicate some of these cases with speed.

He recommended the possibility of setting up special courts to adjudicate matters relating to the specific issues arising out of the banks resolutions and revocation of licenses, as well as issues relating to collateral.

Dr Addison said a swift and fair judicial system would enhance the efforts being made by the Central Bank to bring some sanity into the banking sector, by fighting against financial crime including money-laundering.

Mr Ernest De-Graft Egyir, the Chief Executive of the Ghana CEO Network, thanked the Governor for shedding more light on what was going on in the banking sector, in order to ensure good corporate governance among the leadership of institutions.

He said the Summit on the theme: “The Futuristic Economy: Technology-Driven Future of Business and Governance for Economic Transformation,” had become necessary for discussions because the world of business and governance was at the threshold of transformation driven by emerging technologies.

He said the emerging technologies were profoundly changing the world of work, with regards to jobs, skills, education, industry, manufacturing, business models and economies among others, and CEOs must strategise to meet the demands and challenges that may arise from this transition.

Source: ghananewsagency.org

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BoG had 7 days worth of imports before requesting Fund’s support – IMF

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BoG had 7 days worth of imports before requesting Fund’s support – IMF

BoG had 7 days worth of imports before requesting Fund’s support – IMF

The International Monetary Fund’s Resident Representative to Ghana says when Ghana officially requested for the Fund’s support back in 2014, the country only had around seven days’ worth of imports in net foreign exchange reserves, equivalent to $400 million.

In an article, Dr Albert Touna-Mama said, “When Ghana officially requested the Fund support on August 8, 2014, the cedi had depreciated by 40 per cent, inflation was in the double-digits, and the Bank of Ghana only had around seven days’ worth of imports in net foreign exchange reserves, equivalent to $400 million.”

He added, “In the first half of 2014, the fiscal deficit was almost exclusively financed by BoG printing money for an amount equivalent to 22 per cent of the previous year’s fiscal revenue, compared with a target of only 5 per cent, as alternative financing sources were drying up fast. Interest rates stood at around 24–25 per cent on domestic debt.”

According to Dr Touna-mama, “The generous terms of the Fund financing provided Ghana with the needed breathing space to avoid resorting to measures that are harmful to national prosperity.”

“For instance, the Government was able under the programme not to accrue new arrears while at the same time adopting a clearance plan to deal with legacy arrears.”

The IMF Executive Board approved a $918 million loan to Ghana in 2015 to support a reform program aimed at faster growth and job creation while protecting social spending.

Source: Myjoyonline.com

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Government to offload shares of some state enterprises

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Government to offload shares of some state enterprises

Government has hinted of plans to offload part of its shares in some state enterprises onto the Ghana stock market.

The move is part initiative to power the private sector to hold a majority stake in some of the state enterprises. The government believes offloading the shares will maximise the profit of the enterprises.

In an interview with Joy FM, Chief Executive of the State Enterprises Commission Stephen Asamoah Boateng said discussions with the finance ministry are far advanced to float some of the state enterprises on the stock market.

The Chief Executive in the interview refused to disclose the possible state enterprises to be listed on the stock market.

“We are now preparing the grounds to see which ones are potentially good to float on the stock market so that Ghanaians can also buy into it, I am more relax in terms of getting the fundamentals right, now the new authority coming in need to get the structures going..”

He also explained the conversion of the commission into an authority and its centralisation.

“The other ministries which give policy directions sometimes they assume the role of ownership and you have the state enterprise setting there, the divestiture implementation committee so there were adverse authorities everywhere we have to bring everything under one authority to centralise it to have an oversight role and that authority then reports to the others including parliament.”

Source: primenewsghana.com

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