The Ghana Chamber of Mines has reported that, mining companies repatriated over US$4.2 billion to Ghana in 2023, marking just over 1.4% of the previous year’s repatriation value.
A total of $2.7 billion was routed through local banks, slightly down from $2.73 billion in 2022.
Meanwhile, transfers through the central bank rose from $1.41 billion in 2022 to $1.5 billion in 2023.
Overall,
Repatriation of funds
This repatriation represented 71.3% of their $5.9 billion mineral revenue for the year, a slight decrease from 73% in 2022.
In 2023, mining companies sold $716.97 million to the Bank of Ghana as part of a forex purchase initiative, which grants the central bank the first option to buy any forex exceeding the Mining Sector Returns (MSR) that companies release into the market.
The Domestic Gold Purchase Programme (DGPP) also saw significant growth, with gold sales to the central bank rising from 93,799 ounces in 2022 to 447,492 ounces in 2023, a 377.1% increase.
According to the Bank of Ghana, mineral export receipts improved from $6.8 billion in 2022 to $7.8 billion in 2023.
This 15% revenue growth was driven by increased proceeds from the export of all minerals except manganese.
Looking ahead, Ghana’s mineral sector is poised for broad-based growth in 2024, particularly in the production and export of its four traditional minerals.
Gold production is expected to range between 4.3 million and 4.5 million ounces.
The report highlights that new projects, such as Newmont’s Ahafo North and Cardinal Resources’ Namdini Gold Mine, are set to boost production.
These new ventures, along with the output from existing mines, are anticipated to raise the Chamber’s attributable production to between 3.1 million and 3.3 million ounces in 2024.
Financial Analyst, IC Securities, has revised its earlier forecast for the year end exchange rate for a US dollar to Ghana cedi.
It had revised upwards the exchange rate to GH¢15.91 to US$1.0 against an earlier forecast of GH¢13.2 to US$1.0. The revision was necessary to reflect the current macroeconomic performance trend.
IC Security emphasis that, the Bank of Ghana’s unexpected policy rate cut in January 2024, triggered an ‘anticipated strong selling pressure on the cedi’.
Meanwhile, the firm delayed revising their forecast until mid-year, expecting certain financial inflows and the final tranche of the cocoa syndicated loan for the 2023/24 season. However, these inflows fell short, and the market was flooded with cedis.
The Bank of Ghana’s adjustment to the Cash Reserve Requirement (CRR) had limited impact on reducing local currency liquidity, as banks converted their maturing securities into CRR positions. Additionally, the clearance of contractor arrears contributed to the increased supply of cedis in the forex market, putting further pressure on the currency.
IC Securities noted that approximately $2.3 billion is expected to flow into the country in the latter part of 2024. These inflows are seen as credible and likely to occur within the indicative timelines.
While the cedi might experience short-term appreciation due to these inflows, domestic investors are expected to continue hedging their bets as the December elections approach, potentially neutralising any gains.
Currently, the cedi is trading at around GH¢15.00 to the dollar in forex bureaus
IC securities
, influenced more by the anticipation of World Bank inflows than by actual foreign exchange sales, as the Bank of Ghana maintains constrained interventions and focuses on building reserves.
The Cedi has taken a staggering nosedive since 2017, recording about 246 percent lost in value against the US dollar.
All attempts to manipulate supply and demand artificially to support the Cedi/US$ exchange rate keep failing; it rather end up exacerbating the problem. These attempts have even cause the Cedi to depreciate further. It’s clear that we need more effective measures to stabilize the currency, and we need them now.
A statement signed by the president of GUTA (the Ghana Union of Traders Association), Dr Joseph Obeng, said, “… the Cedi’s depreciation has created a big mess for the business community …”. The union has described the current situation as a crisis. But it’s not just businesses that are suffering.
The cost of living is skyrocketing, and people’s spending power is plummeting. Every day, Ghanaians feel the pinch, having to make do with less money in their pockets. Less money in the pocket means less spending on everything from food to children’s school fees. This increase in the cost of living has been caused by the high rate of Cedi depreciation, high inflation, high electricity and water tariffs, high interest rates, and high taxes.
But according to the Bank of Ghana (BoG), “.the BoG remains fully committed to providing stability in the exchange rate for the Cedi. The Bank has enough foreign exchange reserves to support the market, and economic agents should stop engaging in speculative purchases as they will suffer economic losses when the correction occurs”.
The Bank also announced the establishment of a task force to oversee all foreign exchange bureaus and ensure they comply with regulatory standards. This task force’s primary goal is to address illegal operators’ activities in the foreign exchange market and enhance market transparency.
Contrary to what the BoG labels as speculative behavior, individuals and businesses are actually making rational decisions. Investing in foreign currencies, gold, or other precious metals in high-inflation environments is a prudent strategy to safeguard wealth, preserve purchasing power, and diversify investments. The allegations about the activities of ‘illegal’ forex traders are a diversion. It’s illogical to blame small-time currency traders for the Cedi’s depreciation.
The BoG and the Government of Ghana’s (GoG’s) consistent failure to deliver on their policy promises has undermined public trust, forcing even humble traders like the local Koko seller to scramble for scarce dollars. As the Cedi’s value plummets, the prices of everyday essentials like ‘pure water’ skyrocket, making life even harder for ordinary Ghanaians. The BoG speaks, but its words ring hollow. Despite its policy tweaks and assurances, the Cedi’s woes continue.
There is also information in the public domain, fueling Cedi speculation, which the BoG is not addressing. The harsh truth is that the GoG’s borrowing spree has blown up in its face, shutting it out of international capital markets. The same markets that once propped up the Cedi with dollar injections now slam their doors shut, leaving the currency to plummet.
In their recent statement, the BoG admits that business sentiment is low, inflation is high, and disinflation is not working. They also admit to missing all targets but claim the targets they were reporting are broadly aligned with targets agreed upon under the IMF programme.
The National Democratic Congress, NDC, has announced the national campaign team and the campaign steering committee members for the 2024 general election.
The campaign team is headed by the General Secretary, Hon Fifi Kwetey while the steering committee is headed by National Chairman, Johnson Asiedu Nketiah.
These were contained in a press statement released today signed by the General Secretary of the party.
Below is the full press release:
PRESS STATEMENT
For Immediate Release
19th June, 2024
NDC APPOINTS NATIONAL CAMPAIGN TEAM FOR THE 2024 GENERAL ELECTIONS
After extensive consultations and deliberations, the Functional Executive Committee of the NDC, at its meeting held on Tuesday, 18th June 2024, constituted the National Campaign Team that will prosecute the party’s 2024 presidential and parliamentary campaigns.
James Agyenim Boateng- Spokesperson, Running Mate’s Campaign
Eric Adjei- Deputy Spokesperson, Running Mate’s Campaign
Other members of the National Campaign Team are:
Richard Anamoo- Representative of the NDC’s Professionals Forum.
Shine Gaveh- Representative of the Cadres Front
Dr. Nashiru Issahaku
Obuobia Darko-Opoku
Dr. Mary Awusi
The National Campaign Team shall work under the guidance of a Campaign Steering Committee that comprises:
Johnson Asiedu Nketia- Chairman
Fifi Fiavi Kwetey
Dr. Ato Forson
Rt. Hon. Doe Adjaho
Alhaji Hudu Yahaya
Kofi Totobi Quakyi
Samuel Ofosu Ampofo
Dr. Kwabena Duffour
Betty Mould Iddrisu
Julius Debrah
Marrietta Brew
Dr. Valerie Sawyer
Sam Pee Yalley
Alhaji Alhassan Ligbi
The National Campaign Team and Steering Committee shall all work under the leadership of the flag-bearer of the party, H.E. John Dramani Mahama and report to the Functional and National Executive Committees of the party in the discharge of their duties.
Verifiable statistics indicate that, Ghana’s youth unemployment rate stood at 7.16 percent in 2023.
The African Development Bank (AfDB) report further indicates that, those in the age bracket of 15 to 24 dominates the canker.
These were contained in the bank’s updated 2024 Africa Economic Outlook which also highlighted that, unemployment is significantly higher among women in this age group compared to their male counterparts. The data shows that female youth unemployment reached 36.7%, while the rate for males was 29.3%.
Africa development bank
Consequently, the report showed a slight increase in multidimensional poverty, rising from 46% in 2017 to 46.7% in 2022, largely attributed to the lingering effects of the Covid-19 pandemic.
Meanwhile, productivity in the services sector, the largest employer, has stagnated, while gains in industry and agriculture remain modest.
Agriculture’s share of employment fell from 53.9% in 2007 to 29.8% in 2019. In contrast, industry’s share increased from 14.1% to 21.0%, and the services sector saw its share rise from 31.9% to 49.2%.
The AfDB suggests several measures to fast-track Ghana’s structural transformation. These include enhancing competitiveness by addressing infrastructure bottlenecks, accelerating agro-industrialisation through skills development and value addition, and bolstering private sector growth.
Additionally, the report emphasises the need for a robust policy framework to support technology adoption and innovation.
Ghana’s economy is currently among high rated countries in the African continent battling significant revenue losses through tax evasion, tax exemptions, and systemic tax inefficiencies.
This, according to Tax Justice Network Africa, Ghana looses approximately US$1.4 billion annually due to illicit financial flows. This amount could do alot to improve the standard of living of the people.
Also, according to a report by the United Nations Conference on Trade and Development (UNCTAD), the African continent looses nearly US$89 billion annually due to illicit financial flows. The report identifies Africa as a ‘net creditor to the world,’ indicating a substantial outflow of capital from the continent. The alarming situation has flamed passions and concerns of some politicians and civil society organizations to raise awareness while proffering solutions.
“Our governments must also acknowledge that the problem is a major issue, and I think the biggest challenge in our generation now is the issue of illicit financial flow”, Francis Kairu, Strategic Programmes Director at TJNA, in an interview with journalists during the African Parliamentary Network on Illicit Financial Flows and Taxation Summit held in Ghana, emphasised the urgency of addressing these issues.
“Ghana is one of the countries that loses the most because you have natural resources, you have a huge population that is being taxed.”
Parliament of Ghana
Ghana is one of the countries that grant tax exemptions and tax holidays every other day.”
However, tax experts and some economists attribute almost half of the total financial loss to the situation of ‘under-declaration’ of export values for commodities such as gold, diamond, and platinum.
Companies engaged in such practices are accused of evading taxes and royalties, exacerbating the continent’s financial drain.
Also speaking at the event, Joseph Osei-Owusu, first Deputy Speaker of Parliament of Ghana, indicated that: “If we allow so much illicit outflow when our public needs, need to invest in public infrastructure, unfortunately, we will borrow and not provide services.”
“Illicit financial flow is a global phenomenon, but a dire situation in the country not because of the staggering figures,” he said.
APNIFFT is a flagship programme coordinated by Tax Justice Network Africa (TJNA) with an overall objective to provide an opportunity for its members, the African legislators, to strategise, learn from each other and build their capacities in tackling illicit financial flows (IFFs) and tax injustices in the continent.
APNIFFT was first conceptualised in 2015 and eventually launched in 2017 by TJNA. Since its inception, APNIFFT’s operational strategy has focused on national-level legislative interventions to combat the continent’s IFF issues.
This has been operationalised through country-based (National) parliamentary caucuses that now serve as a basic unit of engagement and mobilisation of Members of Parliament (MPs). These basic units then combine to form regional caucuses, based on membership of regional economic councils, to form the continental caucus.
The network currently boasts a total of 702 members from 41 countries in Africa.
It meets with MPs and members of Civil Society Organisations through capacity-building sessions and meetings to fast-track Africa’s conversation and action around illicit financial flows.
Mr Osei-Owusu, also the New Patriotic Party (NPP) MP for Bekwai said laws were not the weakest thing but their implementation.
He expressed concerns at the high level the continent was experiencing financial outflows which were perpetuating the kind of damage the slave trade had had done to Africa.
The Office of the Registrar of Companies (ORC) has warned to strikeout names of businesses and companies which have not yet filed their annual returns.
Directors and proprietors of over 500,000 businesses and companies have up to June 30, 2024 to file their annual returns.
The affected companies is made up of over 8,000 companies and over 500,000 business names. However, they have all been notified and reminded through various sensitisation programmes and multiple publications over the past two years, the ORC have said in a press statement.
“A company struck off the register can only be restored by the Registrar of Companies after a court finds sufficient cause and issues an order to the Registrar of Companies directing the restoration of the name to the register as per Section 289 (7) of the Companies Act 992”, the statement issued last week has indicated.
Initially, the Office of the Registrar of Companies gave the companies until the end of 2023 to comply but decided to extend the period to allow for intensive public education by the ORC and adequate preparation on the part of the defaulting businesses.
The ORC noted that per Section 289 (5) of the Companies Act 2019 (Act 992), a company that has its name struck off from the register cannot and is not permitted to conduct business under that name for twelve years. It further noted that business names (sole proprietorships) lose the right to the name as it falls into the public domain after being removed from the register by reason of default, in accordance with Section 59(A) of the Registration of Business Names Act 1962 (Act 151).
Office of registrar of company
The release stated that filing annual returns is vital for maintaining compliance and transparency within the business community. It ensures that companies and businesses fulfil their statutory obligations and remain in good standing with the Office.
Additionally, the release advised that failure to meet these obligations not only jeopardizes the entity’s legal standing but also undermines public trust and confidence. Therefore, it requests that these entities take immediate action to be in good standing to avoid paying penalties and suffering potential legal repercussions.
The ORC encourages compliance from all stakeholders to uphold the integrity of the business environment and foster trust and confidence among investors, consumers, and the public. It has thus urged defaulting companies to visit the ORC’s website to check the names of affected companies in default.
Ghana has been negotiating with the Independent Power Producers (IPPs) since last year to rework the arrears as part of its external debt revamp.
However, in recent concern raised by the private power producers, they are threatening to walk away from the US$1.6 billion arrears payment negotiation.
This is huge threat to the success of the efforts made for the past years to restructure the country’s debts.
“The government has not kept its side of the bargain on payments, despite some producers agreeing to haircuts and others cutting energy charges”, Elikplim Apetorgbor, chief executive officer of Independent Power Generators Ghana, has said in an interview last week. “We were expecting that by now half of the outstanding would be settled and a payment plan prepared for the remainder.”
“We are compelled to re-evaluate our concessions and may be forced to demand the full settlement of arrears”, he emphasized.
The government has paid about US$400 million as of the end of December, Apetorgbor said. Part of the deal with the IPPs was for the state-owned power distributor Electricity Company of Ghana to remain current on its payments to them from June 2023 onward. But it was only paying 70% of the monthly bills and cut that to 21% in the last three months, Apetorgbor said.
However, according to Bloomberg news on the same matter, “a Finance Ministry spokeswoman didn’t immediately respond to requests for comment.”
Independent power producers
The country is restructuring almost all of its US$45 billion of debts to make them sustainable under an International Monetary Fund program. This standoff could potentially affect that assessment.
Ghana won an IMF bailout in 2023 after debt ballooned and it missed a eurobond payment. It concluded a domestic debt rework last year and hopes to soon finalize talks to reorganize US$5.4 billion of loans and US$13 billion of eurobonds.
The nine member-IPGG produces over 60% of Ghana’s peak demand of 3,618 megawatts and 80% of its thermal generation.
Data from the Bank of Ghana indicates that, total revenue and grants for the first four months of 2024 amounted to GH¢30.4 billion (2.9 percent of GDP) compared with a target of GH¢37.7 billion (3.6 percent of GDP).
Bank of Ghana
Also, total expenditures on commitment basis, including other outstanding payments for the period amounted to GH¢49.0 billion (4.7 percent of GDP) compared with a target of GH¢55.5 billion (5.3 percent of GDP).
According to the Bank of Ghana Governor, Dr Ernest Addison, Ghana’s fiscal performance is “broadly” in line with the targets agreed under the International Monetary Fund (IMF) Balance of Payment supported programme.
Provisional data on the execution of the budget “shows that the primary balance (commitment basis) was in a deficit of 0.6 percent compared with a target deficit of 0.2 percent.”
The overall broad budget balance (commitment basis), “was a deficit of 1.8 percent of GDP compared with a deficit target of 1.7 percent of GDP.
GCB Capital has predicted an end of year inflation of 17 percent amidst tightening of the monetary policy by the Bank of Ghana.
GCB Capital further predicts that May inflation will fall to 21% from April inflation of 25%.
It notes that, the predicted decline will be influenced largely due to base effects. However, there are significant concerns, among market players, about the potential impacts of the recent depreciation of the cedi and its delayed consequences on prices.
With GCB Capital worried over the “second-round effects”, such is seen as a significant risk to the short-term economic outlook noting that; “The recent rise in ex-pump petroleum prices, leading to increased transport fares, is expected to drive up general prices further.
“With quarterly utility tariff adjustments yet to be implemented and prevailing economic uncertainties, the risk of near-term inflation remains high.”
GCB Capital proffered that, such “situation necessitates a persistently tight monetary policy to manage inflation expectations and support the disinflation process.”
In line with its suggestion, the Monetary Policy Committee (MPC) last week maintained a tight monetary policy stance to counter emerging inflationary pressures from currency depreciation and transport fare increases.
The MPC’s latest forecasts indicate a slightly elevated inflation profile due to the cedi’s depreciation and recent transport fare hikes.
BoG
Adding that, achieving this target hinges on maintaining a strict monetary policy and implementing aggressive liquidity management operations.
Consequently, GCB Capital acknowledges the MPC’s decision to align with its expectations and the market view, noting that, the evident risks to inflation necessitate continued vigilance and policy strictness.
According to the central bank, inflation has significantly decreased from 41.2 percent in April 2023 to 25 percent in April 2024. This notable reduction in inflation is observed in both the food and non-food components.
The central bank attributes the decline in inflation to several factors: relative stability in the local currency, a tighter monetary policy stance, and stable petroleum prices.
Despite the sharp disinflation from April 2023 to April 2024, inflation remained sticky in the first quarter of the year, hovering around 23 percent with a slight increase in March.
The sluggish disinflation process can be explained by a reduced supply of some seasonal food items and exchange rate depreciation, particularly impacting non-food inflation.
The World Bank today approved a $250 million International Development Association (IDA)* credit for a five-year Ghana Financial Stability Project. The project will support Ghana’s Financial Sector Strengthening Strategy (FSSS) by contributing to financial stability through the recapitalization of viable Banks and Specialized Deposit-taking Institutions (SDIs) impacted by Ghana’s Domestic Debt Exchange Program (DDEP).
The financial system is critical to the functioning of the Ghanaian economy, providing critical services to households, firms, government, and supporting economic growth. To address the severe impact of the DDEP on financial institutions, the Government established the Ghana Financial Sector Stability Fund (GFSF) to provide solvency support to banks, pension funds, insurance companies fund managers and collective investment schemes.
“This project will contribute to Ghana’s financial stability, by providing solvency support to banks and SDIs impacted by the DDEP through the GFSF.” said Robert R. Taliercio, World Bank Country Director for Ghana, Liberia, and Sierra Leone. “Through direct support to banks and SDIs, the project will benefit Ghana’s financial sector and the economy by supporting the access of depositors and other financial consumers to savings, payments, and other core financial services provided by adequately capitalized banks and SDIs.“
The Ghana Financial Stability project is expected to immediately benefit eligible undercapitalized but viable banks and SDIs and become accessible to other banks and SDIs that may need support in the future due to potential new losses and providing a backstop against unexpected losses.
The World bank
The project promotes financial stability, a key requirement to protect people and preserve jobs,” said Carlos Leonardo Vicente, Senior Financial Specialist and Team Lead.
The project complements the World Bank’s Development Program Financing series and the IMF-Extended Credit Facility, which support reforms to improve the macroeconomic environment and enable financial institutions to operate profitably and generate internal capital. It also complements other World Bank funded projects aimed at economic recovery and job creation in Ghana, such as the Ghana Development Financing Project which supported the establishment of the Development Bank of Ghana and provides long-term financing to small and medium enterprises and small corporates.
