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Business magnates and economists have called for applause for the government for improving many of the indicators used in measuring the ‘Ease of Doing Business Report’ by the World Bank, including the cost of electricity, access to credit, infrastructure among others.
This is as a result of prudent and pragmatic economic management measures put in place by the government.
The Chairman of Fidelity Bank, Ghana, Edward Effah says he expects the ‘Ease of Doing Business’ in the country to improve significantly in the coming years.
“I expect to see that over the next year or two Ghana’s ranking when it comes to the ease of Doing Business will improve significantly. The World Bank uses a number of indices such as access to credit, interest rates, infrastructure, cost of electricity, property rights and so on. I think we need to commend the government…. we’ve seen significant improvement in many of those areas over the last 18 months.”
He said investor confidence has soared, adding that “we were at the Eurobond road show and there was a lot of investor confidence in the Ghanaian economy and that was different from Ghana two years ago where investors saw Ghana as a disaster.”
Explaining further, Effah noted that “what impressed investors were that growth has gone from 3.5 percent to 8.9 percent and inflation is now single digit, the currency was the worst performing currency in 2014 with devaluation of about 35 percent but in 2018 is one of the best performing currencies, our international reserve is more than 4 months of import cover and is one of the highest in the region, interest rates are coming down, so all these factors go to help in the ease of doing business.”
Effah also called on Ghanaians to support the ‘Ghana Beyond Aid’ policy, saying it is noble. “We need to build a solid private sector. We need big Ghanaian companies to pay taxes and create more jobs.”
Some other private sector players have also commended government for the introduction of the digital address system, reduction in electricity tariff, reduction in bank lending rates, mobile interoperability among others, adding that will enhance the business environment further.
Meanwhile, President Nana Addo Dankwa Akufo-Addo has assured that, based on lessons from the past, and the current economic successes, the government will work hard not to seek any assistance from the International Monetary Fund (IMF) in the future.
“I am hoping strongly that this will be the last time Ghana will have the recourse to go to the IMF for assistance,” President Akufo-Addo said during a two-day Ghana CEO Summit 2018 in Accra.
The President said the growth recorded after a year of fiscal discipline and innovative economic management had been remarkable.
He, however, asked successive future governments to draw lessons from the trend in order not to run the country into macroeconomic difficulties in the future.
He stressed that the government would not relent in its quest to remain fiscally disciplined in the management of public finances in a move to sustain the gains made so far.
For this reason, the President noted that the country must live within its means if it wanted to grow its economy.
“As a government, if you want to be committed and disciplined in the management of the public finances of your country, it will be very unusual to find yourself in macroeconomic challenges which will require the assistance of external entities,” he added.
The Resident Representative of IMF, Ms Natalia Koliadina, who has also applauded the macroeconomic gainsof the country, urged the government to continue to adhere to prudent fiscal discipline in order to sustain the stability achieved so far.
That, she said, would help improve on the gains made over the past one year even outside the IMF-supported programme.
Speaking at a panel discussion at the same event, the director asked the government to develop more means in order to reduce the country’s debt.
While commending the managers of the economy for reducing the debt to GDP ratio to 60 percent as at February 2018, she said the country’s public debt was still significant. Ms Koliadina said ‘Ghana Beyond Aid’ would be difficult to achieve if Ghana’s debt stock was not controlled effectively.
“Let me congratulate the government for a successful 2017 in terms of restoring macroeconomic stability. The fiscal deficit was reduced from 9.3 percent of GDP in 2016 to 6.0 percent of GDP in 2017 and this is an enormous effort,” she indicated.
Fiscal deficit dropped from 9.0 percent of GDP in 2016 to 6.0 percent of GDP in 2017, inflation has hit single digit in April 2018, interest rates have been trending downwards with 91-day Treasury Bill rate at 13.34 percent. Ghana’s economy is one of the strongest in Sub Saharan Africa whilst the cedi has been relatively stable against the US dollar in 2018.
“Last year was the first time that the government was able to record a primary surplus. The surplus allowed debt to GDP ratio to decline, so now debt is on a declining path. This is a major achievement, but of course it did not come without its cost.
“This recovery process is only the beginning for Ghana because much more needs to be done. And the focus now is on making sure that macroeconomic stability is continued and maintained in the future outside the IMF-supported programmes.”
Source: Adnan Adams Mohammed