Category: News

 

Adnan Adams Mohammed

Some financial experts and economists are calling on the Monetary Policy Committee of the Bank of Ghana to cap commercial banks interest rate. 

Other experts have also laid blames on the BoG for not being stricter in its regulatory and enforcement regimes to compel the banks to benchmark the MPC Policy Rate currently pegged at 13.5 percent whiles commercial banks average interest rate is around 21% according to BoG data. 

The Bank of Ghana’s Summary of Economic and Financial data show that average lending rates have dropped from about 31 percent in 2016 to about 21 percent in 2021. Despite the improvement in the cost of credit in Ghana over the years, businesses in peer economies enjoy cheaper lending rates. Research conducted by International advisory firm, Konfidants showed that cost of credit is one of Ghana’s weakest points.

“The disparity in the country’s revenue and expenditure have forced government to borrow from banks, leading to a crowding out of the private sector as well as the prevalence of high-interest rates”, Governor of the Bank of Ghana, Dr. Ernest Addison has posited. 

According to the Konfidants research, the country ranks at the bottom of the list when compared to the top African exporters.

The 13.5% policy interest rate in Ghana as of September 2021 was doubled the African average of 7%, and also compared unfavourably to 1.5% in Morocco, 3.5% in South Africa, 4.5% in Côte d’Ivoire.

In response to questions on the high lending rate at the recently held Monetary Policy Committee press conference, the  governor of the Bank of Ghana, Dr. Ernest Addison noted that improved fiscal consolidation will help in reducing the cost of credit in the country.

“If you look at the macro side, one of the problems we have is the strong demand from the side of the budget. If we were seeing greater fiscal consolidation, you would expect that lending rates will also follow. I use the example of country’s that run balanced budgets. Currently, the banks are holding GH¢ 80 billion in government bonds. If Ghana’s revenues were equal to its expenditures, where do you think that money will be and what do you think will happen to interest rates in that context.”

“So the issue of fiscal consolidation is also very key in addressing this issue of the high lending rates. We are working at it, government is doing its part by trying to reduce the budget deficit. It’s not easy, but work is being done,” he added

 

The Chief Executive of the National Petroleum Authority (NPA), Dr Mustapha Abdul-Hamid says his outfit is poised to ensure that bitumen used in the construction of roads in the country is of high quality and streamlined. 

He said the draft licensing framework and operational guidelines for efficient regulation of the bitumen industry in the country had been developed. 

Dr Abdul-Hamid disclosed this during a working visit to the SocieteMultinationale de Bitumes (SMB) refinery in Cote d’Ivoire. He said the visit was to experience at first-hand and understand the operations of the bitumen industry from the refinery to utilisation; as well as adopt best quality assurance practices to be implemented for use by bitumen facilities in the country. 

Dr Abdul-Hamid expressed appreciation to the newly appointed SMB Director General, Mrs Josephine Marie Sidebe and emphasised that “besides the learning experience, the visit in a long run would be beneficial to both countries in strengthening the business ties between the two organisations.” 

He also highlighted that the lessons from the visit would enable the downstream regulator to finalise all the existing draft frameworks and guidelines necessary for mainstreaming the bitumen industry in the country. MrsSidebe on her part assured Ghana of supplying the best quality of bitumen for road constructions, adding that, “SMB meets requirements of every country on the continent.” 

“Unfortunately, most of the countries have different specifications. For Ghana, it’s about your requirements. If you require American standard, we will produce for you. So, we can produce both American and European specifications” she added. 

Ghana imports its bitumen from SMB which produces, stores and trades about 47 per cent of the total bitumen consumed on the continent. Over the years, SMB has held strategic partnerships with Total International and Vivo Energy through the importation of bitumen to the Ghanaian Market; and currently with Ghana Oil Company (GOIL) through a partnership to construct a 6,000 metric tonnes bitumen processing plant in Tema. 

Currently, the bitumen market is not regulated. To streamline the operations of bitumen marketers and to enable the NPA to commence the process of regulating bitumen consumption, a committee was constituted in 2017.

 

Adnan Adams Mohammed

Access to electricity has been one of the bedrocks of industrialized economies, social integration and global development and it affects every aspect of human life and economic development.

For about two decades now, businesses in the country have consistently advocated for cheaper and reliable power supply as successive governments keep giving assurance, but all seems a mirage to the business owners and individuals. 

In attempts to win the trust of businesses for the assurance of stable electricity supply, the President, Nana Addo Dankwa Akufo-Addo, last week commissioned the Pokuase Bulk Supply Point (BSP) Substation to increase reliability of power supply to homes, businesses, and industrial plants in the northern parts of Accra. It is also expecting to soon commission other BPS at Kasoa in the Central Region and two primary substations at Kanda and Legon in Accra.

“Electricity is no longer a luxury. But rather a necessity, and we must commit ourselves to working hard and ensure that we achieve universal coverage in this country as soon as possible to spur economic growth,” the President at the commissioning ceremony. “Government remained committed to ensuring safe, stable, and affordable power supply in the country.”

The substation, President Akufo-Addo pointed out, was strategically positioned to cater to the increasing load demand for electricity in the Northern parts of Accra and noted that, the government is carrying out several other initiatives and projects to meet the increasing power needs rising out of population growth and the Governments industrialisation agenda. 

Subsequently, a Senior Presidential Advisor, Yaw Osafo-Maafo has recounted that, for the industry to be able to absorb the teeming unemployed youth in the country, it is necessary for firms to have access to reliable power at an affordable cost, as that will make them competitive. 

The former senior minister speaking at the Ghana Economic Forum described the unemployment situation as scary.But, assured that with a well-functioning and competitive energy sector, industries should be able to take up more graduates to reduce the unemployment menace. 

“The industrialisation drive by government demands that we pay keen attention to the energy sector if we are to confront head-on the scary unemployment canker challenging our development agenda today in this country.” 

“Energy is therefore key in creating employment through industrialisation. You cannot industrialise without energy. It’s not just energy, but energy at a competitive price. If you are taking energy at twice the cost in Nigeria and thrice the cost in Liberia, you cannot then produce anything to sell competitively,” he said. 

Mr. Osafo-Maafo emphasised that the energy sector is key and critical in the development discussion of any economy; and more importantly, emerging economies like Ghana must make energy the backbone of development, hence government has stepped up efforts to ensure this happens. 

“This made government deepen the discussion on the Energy Sector Recovery Programme (ESRP) with establishment of the cabinet interministerial task force on energy with a five-year implementation plan and arrangement from 20218 to 2023 in five priority objective areas: namely the security of supply, competitive tariffs, support for low-income consumers, as well as strategic industrial growth and universal access to electricity and energy. 

“These multifaceted priority areas have guided government to make significant investment into the entire energy sector, and equally doing so in recent times with the view of ensuring that there is reliable and sustainable power at competitive and affordable prices to drive government’s industrialisation agenda, including the One District, One Factory initiative,” he said. 

However, an Independent Energy Consultant, Dr. Nii Darko-Asante has shared that, inefficiencies and power-theft remain the biggest challenge, particularly in the distribution of electricity to consumers contributing to higher electricity tariffs.

He asserted that, despite efforts put in place to reduce the energy sector legacy debt power-theft and inefficiencies have made the cost of electricity high in the country. Therefore, he wants the power distribution companies; Electricity Company Ghana (ECG) and Northern Electricity Distribution Company (NEDCo) to complement efforts of the generation companies in reducing the level of theft and inefficiencies in the system. 

“In terms of industrial tariffs, Nigeria has a lower tariff than Ghana in the sub-region due to cheaper gas. To improve, a significant portion of the inefficiencies and electricity-theft must be stopped to reduce debt in the sector. 

“We need to bring the ECG and NEDCo more in line with efficient operations. There is a performance improvement programme that both are being mandated to put together to reduce their losses by 2 percent on year-on-year basis,” he said. 

Dr. Darko-Asante maintained that the financial performance of ECG and NEDCo is important to sustainability of the energy sector, hence the decision by government to strictly monitor their operations for them to achieve the set target is very necessary. “When it comes to ECG and NEDCo meeting the performance indicators, there will be benefits and sanctions enforced by regulators and the State Interest and Governance Authority to ensure that for the needed change we actually meet the targets,” he said. 

He explained that even though Ghana is not doing badly on setting electricity tariffs in the West African sub-region, cost of electricity to industry is still high compared to its peers in the region. 

Cash Waterfall System

To improve revenue collection on the part of ECG, Dr Darko Asante agrees thatthe cash waterfall system was introduced to clear the debt owed power production companies. He further explained that the cash waterfall system was introduced to automatically demarcate a portion of the revenue collected by ECG to pay-off the capacity charges of power plants to reduce debt in the sector. 

“Normally, when the producers supply power to ECG, ECG is supposed to pay directly to the producers so that they (producers) will pay the fuel suppliers. But ECG was unable to pay the power producers because of losses and theft in the system. 

“The good thing about this system is the certainty and predictability it brought to the industry in terms of providing liquidity on weekly basis to the power plants,” he said. Dr. Darko-Asante expressed optimism about the system, saying he is hopeful the cash waterfall mechanism will gradually help in reducing the energy sector debt as cheaper gas is supplied to the power plants to generate electricity.

The Pokuase BPS 

The Pokuase BPS has a total capacity of 580 Mega Volt Ampere (MVA) being the largest and most technologically advanced substation in Ghana among other four BPS in the Accra region. It is expected improve power supply quality and reliability to the over 350,000 utility consumers in Pokuase, Nsawam, Achimota, Anyaa, Sowutuom, Kwabenya, Ashongman, Legon, Haatso, Agbogba, Adenta and Aburi communities. 

The facility will also reduce transmission and distribution losses and improve the financial viabilities of the Ghana Grid Company (GRIDco) and the Electricity Company of Ghana (ECG). Construction of the USD64.7 million facility commenced in April 2019 and was completed in May 2021. It was funded by the United States of America through the Millennium Challenge Corporation (MCC).

The Pokuase BSP is the first major construction project to be completed under the Ghana Power Compact with the MCC. The USD316 million Compact is helping the Government of Ghana improve the power sector. The Compact is also funding a BSP at Kasoa in the Central Region and two primary substations at Kanda and Legon in Accra. The Compact will end in June 2022. Government implemented the Pokuase BSP project through the Millennium Development Authority

The ESRP Project 

In collaboration with the World Bank, government created the ESRP which identifies the policies and actions neces
sary for the sector to recover its financial footing. The five-year plan runs from 2019 to 2023. 

Subsequently, a government negotiating team established under the Energy Sector Recovery Task Force started engagements with Independent Power Producers (IPPs) and gas suppliers under a consultation process to secure more favourable and sustainable agreements for both parties. 

According to the Finance Ministry, the ESRP has started to pay dividends, with the announcement that it has so far saved the country’s energy sector US$5billion as of December 2020. This came about by relocating Karpowership and securing agreements with CENIT Power and Cenpower Generation Company

 

Adnan Adams Mohammed

Financial experts have cautioned the government against its appetite of borrowing, especially from the international market, as they predict Ghana is likely to return to International Monetary Fund (IMF) for debt sustainability support. 

They believe that the increasing interest costs of international bonds on the capital market will take a huge toll on the government’s finances and liquidity in the economy. 

The situation, already, is adversely affecting businesses in accessing funds to expand and develop.As government’s inability to raise funds from the international market has pushed it to resort to borrowing from the domestic market, stifling businesses from needed funds. 

“It’s going to have an impact on our economy. I mean the bonds that we’ve floated because obviously once the premium yield goes up, we should expect that every investor would require a higher rate as far as our bonds are concerned”, Professor Lord Mensah, lecturer at the University of Ghana Business School has said. “We should expect higher rates on any issue [new bonds or rollover]. It will affect the possible floatation that we’re going to do in future. Businesses will also be affected in a way because once interest rates go up in a certain environment, it increases the cost of operations. Even the banks struggle to raise funding.”

Also, an Economists and Fixed Income Strategist, Neville Mandimika, has indicated that, in the best-case scenario is for Ghana government to return to IMF as the public debt keeps ballooning.“At this point, Ghana needs to present a credible plan B on how they would fund the budget in the absence of Eurobond issuance adding, do they still have access to the Eurobond market at these levels? Could they issue one at a reasonable price? The answer seems to be no.”

“In a worst-case scenario where debt is growing amid a global risk-off mood, Ghana may have to head back to the IMF,” the economist is quoted in a Bloomberg Survey. 

Ghana’s current public debt stock stands at around GH¢336 billion ending July 2021. A figure that could hamper economic growth and recovery efforts. In a recent Bloomberg survey, Ghana was shown to likely pay a higher premium should it return the issue more Eurobonds on the international capital market in 2022. 

Though Ghana has often relied on Eurobond issuance to fund government expenditure, the nation’s credit-risk premium has risen to the highest since the onset of the coronavirus pandemic. In addition, the Bloomberg survey pointed that limited access to loans from foreign entities may force the Government of Ghana to supply debt domestically. A decision that could hamper gains made by the local currency, the cedi. Per a Bloomberg Index conducted in October 2021, Ghana’s US dollar bonds were the worst-performing instrument. The index which tracked the emerging-market hard-currency debt recorded a decline of 5.8 percent.

 By Elorm Desewu

The government’s fiscal consolidation efforts is being threatened with low revenue mobilization, energy sector payments and wage settlements.

The total revenue and grants for the first seven months of 2021 amounted to GH¢34.3 billion representing 7.8 percent of Gross Domestic Product, (GDP), which is below the projected target of GH¢38.8 billion representing 8.8 percent of GDP.

The government is very optimistic that fiscal policy implementation in the remaining months of the year is expected to be shaped by revenue collection efforts and strict alignment of expenditures with revenue inflows to ensure attainment of the fiscal deficit target for the year.

Total expenditures and arrears clearance amounted to GH¢61.1 billion representing 13.9 percent of GDP, which was below the programmed target of GH¢63.8 billion (14.5 percent of GDP). 

The debt sustainability concerns remain, which warrants additional fiscal consolidation efforts, carefully balanced with sustainable growth strategies and efficient debt management strategies. 

Provisional data on the budget execution for the period January to July 2021 indicated an overall broad cash fiscal deficit of 6.1 percent of GDP, against the target of 5.7 percent of GDP. This was due to higher revenue shortfalls. The corresponding primary balance was a deficit of 1.9 percent of GDP compared to the target deficit of 1.3 percent of GDP

These developments impacted the stock of public debt which increased to 76.4 percent of GDP (GH¢335.9 billion) at the end of July 2021, compared with 76.0 percent of GDP (GH¢291.6 billion) at the end of December 2020. Of the total debt stock, domestic debt was GH¢173.4 billion (39.5 percent of GDP) while the external debt was GH¢162.5 billion (37.0 percent of GDP).

 

 

The expansion of banking operations on digital platforms spurred by the COVID-19 pandemic, have provided cyberattack opportunities to those who are up to no good, Dr Maxwell Opoku-Afari, First Deputy Governor of the Bank of Ghana has said.

 

Addressing cyber security risks, therefore, “have become more important than ever and policymakers need to internalise this fact in their discourse”, he said last week at the official launch of the National Cybersecurity Awareness Month 2021 at the NCA Conference Room.

 

“We are all aware that the banking sector is one critical institution whose role is to support growth. Over the years, banks have progressively moved to digitise their operations and in the process have become vulnerable to cyberattacks” Dr Opoku-Afari noted, adding: “Our inability to put in place policies to protect the infrastructure of banks from attacks could result in the destruction of the very foundation of growth and this has national security implications”.

 

He said regulating and close monitoring of cyber activities in the banking sector, thus, become “an important critical role for the central bank”.

 

“While we pursue this agenda, we need to recognise that regulatory frameworks alone may not be enough to protect the nation’s critical information infrastructure”, warned.

 

Read Dr Opoku-Afari’s full speech below:

 

Good morning and as always, it is a great pleasure to be here today to be discussing issues of cybersecurity which has gained heightened attention in recent times. Before I begin, let me commend the organizers of this programme for their thoughtfulness and for bringing together players in the cyber security space to share experiences on all these important issues, and it is my fervent hope the issues discussed and lessons learnt would strengthen our resolve to counter cyber threats in the economy.

Let me also thank the National Cyber Security Centre for extending an invitation to me to speak to such a distinguished audience on such an important issue which has become a top priority amongst most governments and private sector institutions, not here alone in Ghana but across the globe. It is also important to me because it also affords me to share with participants the steps being taken at the Central Bank to protect the financial sector from cybersecurity threats and related activities. This is important to assure the banking community of our efforts to safeguard the banking system and put it on that steady pedestal towards supporting growth. It is indeed an honour to be able to join you today.

The gradual evolution and change in the business models of firms and institutions and the speed with which the entire digitalisation agenda is progressing is forcing us to re-think ways and means of protecting the very infrastructure that supports this new way of life. Analysts have predicted that the next financial shock or shock to the global economy could manifest itself in the form of a cyber-attack and this makes it imperative for us to begin to think of how to secure and protect our infrastructure Cyber-attacks (i.e. attacks on information and communication technology systems) have emerged as a global threat to financial stability and our way of life. Successful cyber-attacks on computer systems and networks supporting critical national assets and infrastructure could cause significant havoc to our way of life, cause financial loss, undermine public confidence, and cause major disruption to our economy. I am therefore encouraged that all the major stakeholders are gathered here today to launch a national effort aimed at creating cyber security awareness to combat the rising threat posed by cyber-attacks and cyber-crimes. It is my hope that the steps we are taking today will be sustained to promote confidence in the financial system and also ensure financial inclusion.

Mr Chairman, let me also add that the COVID-19 pandemic, and issues emanating from it, has accelerated the adoption of digitalisation in Ghana and this is progressing at top speed. Embracing the new norm of working remotely, transferring resources across financial platforms, purchasing goods and services online e.t.c., are gradually changing the face of our economy and we need to position ourselves in readiness for the threats that come along with these changing lifestyles and doing business. The pandemic has also impacted cybersecurity in various ways, including:

Bringing to the fore a rapidly evolving cybersecurity threat landscape that has rendered traditional or conventional cybersecurity safeguards inadequate; and Increased cybersecurity exposure for Critical Information Infrastructure.

These new and emerging threats have left nations and organisations exposed and vulnerable to cyber-attacks. Current trends in cybersecurity point to significant increases in attacks against Critical Information Infrastructure and related organisations that are drivers of national economies. For many organisations today, the concern is no longer “if or when the organisation is hacked”, but rather “the organisation is likely hacked, we just don’t know how and when it happened”. Addressing cyber security risks has become more important than ever and policymakers need to internalise this fact in their discourse. In what follows, I will discuss regulatory regimes that are being followed through to enhance cybersecurity awareness in the banking sector.

We are all aware that the banking sector is one critical institution whose role is to support growth. Over the years, banks have progressively moved to digitise their operations and in the process have become vulnerable to cyberattacks.

Our inability to put in place policies to protect the infrastructure of banks from attacks could result in the destruction of the very foundation of growth and this has national security implications.

Regulating and close monitoring of cyber activities in the banking sector thus become an important critical role for the central bank. While we pursue this agenda, we need to recognise that regulatory frameworks alone may not be enough to protect the nation’s critical information infrastructure. Regulatory frameworks must be followed by actionable steps to lock in potential intentions.

For this reason, I will attempt to go through some issues and highlight the importance of cyber security awareness including on cyber hygiene as a means of confronting head-on cyber security risks.

Globally, cyber-attacks on digitised payment products are increasingly becoming sophisticated, especially on financial institutions with insecure IT systems. We have witnessed global cyber-attacks which resulted in disruptions to some critical financial services and destroyed financial assets and savings. It is important therefore to ensure that the security of electronic banking products and services are not compromised.

National Response and Preparedness At the National level, the Government of Ghana recognises the threat cyberattacks and cybercrimes poses to critical information infrastructure as well as the damage it can cause to the trust and confidence in our financial system. As a result, the government responded swiftly through regulatory measures such as the Data Protection Act, 2012 (Act 843) and the Cybersecurity Act, 2020 (Act 1038), as well as supporting directives and other related legislation to enforce provisions of the law across all sectors of the economy.

The Data Protection Act, 2012 (Act 843) recognises a person’s right to protect and safeguard their personal data and the Act sets out eight (8) basic principles for
those institutions that control data to implement measures to protect the rights of data subjects and safeguard their personal information.

At the same time, the new Cybersecurity Act, 2020 (Act 1038): makes provision for the protection of Critical Information Infrastructures in the country including information under the control of the financial sector which is identified as a prime sector. Section 44 of the Cybersecurity Act, 2020 (Act 1038) further provides the legal basis for BoG to lead the Sectoral Computer Emergency Response Team (CERT) for the financial sector, and I must say that as far as this is concerned work has already started to ensure the deployment of a security setup that provides realtime visibility into cyber threats and attacks targeting the financial sector.

Mr Chairman, Given the increasing spate of cyber-attacks on the financial sector worldwide, which has become more frequent with sophistication in recent times, and given the fact that our financial sector has also had its fair share of these attacks, the Bank of Ghana, as far back as October 2018 took actionable steps to issue the Cyber and Information Security Directive in a bid to enhance and protect the security of this critical sector of our economy. The Directive, at the time was aimed at creating a secure environment within the cyberspace for the financial services industry and thus serve to generate adequate trust and confidence in Information Communication and Technology (ICT) systems. Following the issuance of the Directive, the Bank of Ghana has introduced many initiatives to strengthen and secure the information security architecture of the banks, to ensure the systems at the banks are robust and resilient.

Mr Chairman, permit me at this stage to list a few of the actions we have taken in this regard:

a. The Bank of Ghana has worked collaboratively with the commercial banks to meet the governance requirements of the Directive, that is, appointments of Board Committee on Cyber and Information Security with a clear Charter; assignment of Director of Cyber and Information Security (DCIS); and appointment of Chief Information Security Officers (CISOs).

b. Banks have been reporting their cyber and information security incidents to the Bank of Ghana on monthly basis. c. The Bank of Ghana continues to have periodic engagement with member banks to clarify aspects of the Directive.

d. The Bank of Ghana, through the Directive, has facilitated safer digital transformation with the adoption of cloud technologies.

e. So far, the Bank of Ghana has prepared a banking sector Cyber and Information Security guidelines to protect consumers and create a safer environment for online and e-payments products. Among others, the guidelines seek to create a secure environment for transactions within the cyberspace and guarantee trust and confidence in ICT systems; provide an assurance framework for the design of security policies in compliance to global security standards and best practices by way of cyber and information security assessments, and protect banks, customers and clients against the potentially devastating consequences of cyber-attacks.

In pursuing these objectives, the Bank of Ghana has embarked on the Financial Industry Command Security Operations Center (FICSOC) project to enable the industry to have aggregated visibility into the cyber threat landscape confronting the sector, through monitoring and threat intelligence sharing. The components of the FICSOC Project include: 1. Security Information and Event Management (SIEM): With the SIEM, a collector will be placed at each member bank’s premises to collect security alert streams from the banks and forward them to the FICSOC over a dedicated secured network for monitoring, analysis and information sharing.

2. Threat Intelligence Sharing: Regarding the sharing of intelligence threat, threat intelligence nodes will be placed at each member bank’s premises to receive relevant threat intelligence, including Indicators of Compromise (IoCs) from the FICSOC.

3. Network Traffic Analysis: Network traffic analysis is an important component of the FICSOC at each member bank that inspects Internet traffic for malicious or suspicious content and sends constant reports to the FICSOC for analysis.

4. Digital Forensic Laboratory: The FICSOC Project will also provide a Digital Forensics Laboratory comprising digital forensic evidence collection and storage facility, evidence processing rooms, and spaces for Examiners to discuss cases and hold relevant briefing. Not all these can be possible without the requisite human capacity needs, and the Bank of Ghana is looking into these issues closely to ensure sound implementation and rollout of these objectives. A cybersecurity expert with appropriate digital forensics capability will support the BOG in these efforts to helpfully deploy the project.

It is anticipated that this integrated approach to cyber security management would support financial institutions achieve both business and security-focused objectives, as well as regulatory compliance in an efficient and effective way.

Mr. Chairman, regulatory compliance by itself is not cyber security. The onus lies on banks to examine the state of their security systems, identify gaps and design appropriate mechanisms to counter possible cyber threats. In addition to these cyber security regulations, financial institutions will also be required to implement an integrated approach by adopting enterprise-wide frameworks of cyber risk management in line with business objectives.

Mr. Chairman, a lot has been said already in this forum on Cybersecurity Awareness and the role of employees in combating cyber-attacks, cybersecurity training, and the need to have in place a cyber-security hygiene policy. I don’t intend to re-hash these issues again but I believe as institutions strive to make their workplaces more cyber-safe, these critical elements discussed in detail will form part of future policy design. The Way Forward

Today’s world is completely different from a decade ago as changes in information and communication technology increase exponentially. As a result, it is important for institutions to undertake cybersecurity-related due diligence and assessments, identify proper detective controls, and enforce third party and insider risk programmes to protect and safeguard their working environments from cyber-related activities that are not conducive for growth. I believe we will all delve into some of these critical issues that are associated with our drive towards digitisation.

We at the Central bank will continue to draw strength from Act 1038, which is intended to further promote and improve collaborative efforts between the Cyber Security Authority and the Bank of Ghana. The Central Bank will work closely with the Cyber Security Authority to monitor trends of cybersecurity issues in the financial sector and ensure a collaborative response to cybersecurity incidents. The Bank of Ghana will also play an active role in the implementation of the Cybersecurity Act, 2020 through our representation on the Joint Cybersecurity Committee (JCC) pursuant to Section 13 of Act 1038. We will endeavour to provide all support available to ensure the smooth formulation of policies in this area.

On the basis of these, I wish you all fruitful deliberations. Thank You for your kind attention.

 

Adnan Adams Mohammed

 

The prices of petroleum products at the pumps are projected to shoot up this month, the National Petroleum Authority (NPA) has noted.

 

It predicts that prices would be hiked to around GH¢ 6.86 per litre at the pumps in the coming week, if all other factors influencing pricing do not change.

 

A top official at NPA has indicated that, the second pricing window for October puts the price of petrol at GH¢6.84 per litre while diesel will likely sell at GH¢6.86 per litre starting October 16, 2021, baring any changes on the world oil market. These projections do not take into account the margins of oil marketing companies and that of the bulk distribution companies, which may cause the projected amounts to go higher while statutory taxes and margins remain the same.

 

“All things being equal, for the next window, [since] the price of petrol on the world market has increased by about 9% and diesel has increased by about 10%, so these two, holding everything constant will project that petrol will increase by about 5% and diesel also increase around the same figure which will take us to about GH¢6.84 for petrol and GH¢6.86 for diesel… This is the next window, which starts from the 16th of October,” Abass Ibrahim Tasunti, the Head of Pricing at the NPA stated in an interview.

 

Meanwhile, the Executive Director of the Chamber of Petroleum Consumers (COPEC), Duncan Amoah has expressed fears that the movement of forex could further cause the price of fuel to increase to at least GH¢ 7 by the end of the month.

 

While insisting the taxes imposed by the government on petroleum prices continue to play a significant role in the rising cost of fuel in the country, he said efforts must be made by the government to address the situation to bring relief to citizens.

 

“We can get to GH¢ 7 by end of October. If we are doing about GH¢ 6.8 for the projection, we are just about 14 pesewas shy so by the close of the month which is the first window in November if the trend continues and the cedi comes under the kind of pressure you will normally see towards the last quarter because of the pressure from importation, I do not see how GH¢ 7 is not possible before November,” he said.

 

Attempts to resolve trade fuse  between Ghana Union of Traders Association (GUTA) and the Nigerian Union of Traders Association (NUTAG) faces yet another challenge.

 

A recent meeting between the GUTA and the NUTAG at the behest of the new presidential taskforce mandated by the Trades Ministry to find an amicable solution to the stand-off once again failed to resolve the ongoing trade war.

 

Some Ghanaians traders have in recent times locked up shops owned by Nigerians in a bid to get them to comply with the laws that prohibit foreigners from engaging in retail trade in the country. Despite the law banning foreigners from engaging in retail trade in Ghana, some foreign nationals continue to engage in such activities in breach of the GIPC Act.

This development and lack of proper enforcement by regulatory agencies have led to some confrontations between Ghanaian retailers and their foreign counterparts in parts of the country.

 

“Unfortunately, at this meeting, the Nigerians have told us again they have not finished their consultation with their government, and so we could not carry on with the meeting. It had to be adjourned for another one week in the hope that by the time we meet again, the consultation between the Nigerians and their government would be complete, and then we can move on from there”, Co-Chair of the Ghana–Nigeria Joint Implementation Task Force on Retail Trade Frank Agyekum told the media on the outcome of the meeting. “And in the interim, the Trade Ministry has asked GUTA to also hold off any actions until we have a response from the Nigerian government, and then we know what to do from there”.

 

In September this year, some foreign-owned shops in different parts of the country were forcefully closed.

 

The Ministry of Trade and Industry subsequently set up a new joint taskforce comprising leadership of GUTA and NUTAG to help resolve the issue following the failure of an initial taskforce to do so.

 

The Ministry of Trade and Industry also asked GUTA members to refrain from locking up shops belonging to foreigners ahead of a planned meeting with leaders of both trade unions last week.

 

The meeting was however inconclusive as members of NUTAG say they are yet to brief their government on the latest development and the way forward.

 

Co-Chair of the Ghana–Nigeria Joint Implementation Task Force on Retail Trade Frank Agyekum spoke to Citi Business News on the outcome of the meeting.

 

“Unfortunately, at this meeting, the Nigerians have told us again they have not finished their consultation with their government, and so we could not carry on with the meeting. It had to be adjourned for another one week in the hope that by the time we meet again, the consultation between the Nigerians and their government would be complete, and then we can move on from there. And in the interim, the Trade Ministry has asked GUTA to also hold off any actions until we have a response from the Nigerian government, and then we know what to do from there”.

 

Meanwhile, President of GUTA, Joseph Obeng, said he is hopeful the next meeting will bring finality to the matter.

 

“At the end of it all, it has been agreed that next week should be a decisive week. And so I think our brothers have clearly understood that they have to comply and from what they are saying they are going to comply with the laws of Ghana”.

 

 

The World Bank has revised Ghana’s growth to 4.9% rate in 2021, from the earlier forecast of 1.4% Gross Domestic Product, its latest October 2021 Africa Pulse report has indicated.

 

The Bretton Wood institution is also forecasting a 5.5% expansion in the economy in 2022, reflecting strong growth in exports.

 

“Ghana is projected to exhibit growth of, respectively, 4.9% and 5.5% in 2021 and 2022, reflecting strong growth in exports. The economy performed relatively well despite the outbreak of the Delta variant thanks to the fiscal support by the government”, the report explained.

 

The Banks’ June 2021 Global Economic Prospects Report predicted a 1.4% expansion in the economy this year, citing slow growth in most sub-sectors of services and industry.

 

This is despite expected resilience in agriculture sector which it said will not be sufficient to offset the Covid-19 pandemic’s lingering adverse impact on the oil and other sectors of the economy.

 

 

Ghana received the equivalent of US$1 billion in the recent International Monetary Fund SDR allocation, part of which will go to support economic recovery under the COVID-19 Action Recovery and Economic Stimulus (CARES) programme.

 

The Africa Pulse report said “in an effort to meet its ambitious domestic revenue mobilization targets (starting in 2021), the government is implementing planned spending cuts (starting in 2022) and the Energy Sector Recovery Programme.”

 

West Africa to grow 2.4% in 2021

 

Meanwhile, the West and Central Africa sub-region is projected to experience a growth rate of 3.2% in 2021, up from -0.8% in 2020.  The sub-region is estimated to grow further by 3.6% in 2022.

 

 

Nigeria is projected to grow from -1.8% in 2020 to 2.4% in 2021, thanks to better performance of both oil and non-oil sectors.

 

Reducing heavy reliance on the oil sector through diversification of exports and assets will benefit the economy going forward, especially in the transition to a low-carbon economy in the medium term, the Africa Pulse report said.

Ghana’s economy expanded by 3.9% in the second quarter of this year, according to provisional figures from the Ghana Statistical Service.

 

During the same period last year where Covid-19 had emerged, the Gross Domestic Product (GDP) growth rate was -5.7%.

 

However, GDP growth rate without oil and gas (Non-Oil GDP) for second quarter 2021 was 5.2%, which is against a growth rate of -5.8% recorded the same period last year.

 

According to the figures, the increase in the Gross Domestic Product (GDP) growth rate was driven by a strong pick-up in the Services and Agriculture sectors.

 

The Health and Social Work (20.75%), Information and Communication Technology (20%), Hotel and Restaurants (18.7%) as well as Fishing (12.7%) Sub-sectors expanded significantly.

 

The government is likely to miss its end year inflation target of 8 percent.

This comes in the wake of a sharp rise in inflation for the month of September 2021.

Year on year inflation measured by the Consumer Price Index, (CPI) has recorded 10.6 percent for the 12 months ended September, 2021 from 9.7 percent recorded in August 2021.

The recent hike in the inflation rate is slightly above the Bank of Ghana’s medium-term target band of 8±2 percent.

According to the governor of the Bank of Ghana, (BoG), Dr Ernest Addison at the recent Monetary Policy Committee (MPC) press conference, “the latest forecast indicates that inflation will remain within the medium-term target band, but closer to the upper limit in the near-term, in the absence of further unexpected shocks.

A close monitoring of the inflation situation is however warranted to respond swiftly to prevent potential second round effects on headline inflation from the rising food inflation. The Committee stands ready to respond appropriately as needed if this particular risk materializes”.

The Oil Marketing Companies (OMCs) and the National Petroleum Authority (NPA) have indicated that prices of fuel will be adjusted upwards by at least 7 per cent at the pumps starting last week Saturday.

According to the Ghana Statistical Service, the increase in the price of Housing, Water, Electricity, Gas and other Fuels (18.7%) triggered the hike in inflation.

The month-on-month inflation between August and September 2021 was 0.6% (0.3 percentage point higher than what was recorded in August 2021).

Food inflation (11.5%) in September 2021 was higher than last month (10.9%) and just above the average of the previous 12 months (10.4%). However, Food inflation contribution to total inflation dropped from 50.2% last month to 48.6% in September 2021.

Overall month-on-month food inflation was 0.0%. Vegetables, coffee and coffee substitutes, and cereal products were the only subclass that recorded a negative month-on-month inflation.

For non-food, year-on-year inflation on average went up this month compared to last month. It went up to 9.9% from 8.7%.

Out of the 13 division, six had higher year-on-year inflation than the rolling average over the last 12 months. Transport (13.6%) was the division that recorded the biggest difference in this month’s inflation compared to the 12- month rolling average.

 

Housing, Water, Electricity and Gas recorded a relatively high inflation (18.7%) this month compared to the rolling average (20.0%).

 

The inflation rate for imported goods was 8.1 % (same as recorded for last month), while the inflation for locally produce items was 11.5%, up from the 10.3% recorded last month.

The Volta region recorded the highest month-on-month inflation for September 2021 of 3.6%.

 

However, Upper West region recorded the highest inflation rate of 16.8%, followed by Northern region with 15.2%.

 

Greater Accra region registered an inflation rate of 12.9%, whereas the Ashanti recorded a rate of 11.7%

Transport either recorded positive mo
nth-on-month inflation or remained unchanged across all the regions.