News Guide Africa

Tag: economy

  • Gov’t reset agenda gets a lift …two important bills passed by Parliament despite concerns

     


    “Parliament passes key bills for economic reset.”

     

    Adnan Adams Mohammad

     

    Parliament has approved two most important bills which give a lifeline to the reset agenda as envisioned by the President John Dramani Mahama led administration.

     

    The Appropriation bill and Ghana Gold Board bill are key instruments that allow the government to execute crucial economic policies stated in the 2025 budget statement.  While the Appropriation bill allows the government to spend  its budgetary allocations from the Consolidated Fund, the Goldbod bill sets a solid foundation for the restructuring of Ghana’s gold trading and export framework.

     

    The government is permitted to spend GH¢293 billion from the Consolidated Fund and other public funds for the 2025 financial year per the Appropriation bill with GH¢68 billion allocated for wages and salaries and GH¢13 billion for the payment of arrears.

     

    “Hon. members, the Appropriation 2025 is now read the third time and accordingly passed”, the First Deputy Speaker, Bernard Ahiafor, said in Parliament concluding the approval of the 2025 Appropriation Bill.

     

    Meanwhile, the Goldbod bill is to regulate the gold industry, enhance transparency and traceability, and boost foreign exchange earnings.

     

    It will oversee the purchase, sale, and export of gold, generating forex revenue needed to stabilize the cedi.

     

    Despite criticism from the minority caucus, who argued that the bill promotes illegal mining activities, also known as ‘galamsey’, the house approved the bill by a majority decision.

     

    The Majority Leader, Mahama Ayariga hailed the bill as a landmark legislation.

     

    “Mr. Speaker, this is a landmark legislation. And those of us who sat through the night to the morning to pass this historic legislation Bill should be proud of ourselves. We have vindicated the trust and confidence Ghanaians reposed in us” he asserted.

     

    “Indeed, the 24-hour economy has started in this chamber.”

     

    This followed a walkout by the Minority in Parliament during the consideration of the Ghana Gold Board Bill 2025.

     

    This was in response to the First Deputy Speaker, Bernard Ahiafor, disregarding their request to reconvene at 10 am on Saturday, March 29, to discuss the bill after passing the 2025 Appropriation Bill.

     

    Addressing journalists, the Minority Leader, Alexander Afenyo-Markin, questioned the government’s commitment to combating illegal mining, citing the allocation of GH¢4.6 billion to the policy as a major concern.

     

    Afenyo-Markin added, “If you say bring an enactment and say your focus is on small-scale mining, all of us in this country know that small-scale mining is galamsey. Is this government really ready to fight galamsey?

     

    “How do you say you’re establishing a new entity that is going to monopolize the purchase of gold from small-scale miners, and now you are going to regulate galamsey and you’re going to give them money?”

     

    Also, former Finance Minister, Dr Mohamed Amin Adam raised concerns over the structure of the proposed GoldBod initiative, cautioning that its design could create conflicts of interest.

     

    Speaking in Parliament during deliberations on the GoldBod Bill, the Ranking Member on Parliament’s Finance Committee argued that international best practices discourage institutions from combining commercial operations with regulatory functions.

     

    “The model where institutions are established to play multiple roles—combining commercial functions with regulatory oversight—is being discouraged worldwide,” he stated.

     

    He explained that best practices require a clear separation between commercial and regulatory functions to ensure proper checks and balances.

     

    “The best practice now is to separate the commercial role from the regulatory function so that effective oversight can be maintained,” he added.

     

    Consequently, Dr. Amin Adam warned that, if passed in its current form, the GoldBod Bill would create an entity that trades, exports, regulates, and adjudicates disputes in the gold sector.

     

    “If this bill is passed, GoldBod will be a commercial entity that trades and exports gold while also acting as a regulator and court. That is not right,” he cautioned.

     

    He cited the oil sector as an example where Ghana successfully separated commercial and regulatory roles, pointing to the Petroleum Commission and the Ghana National Petroleum Corporation (GNPC).

     

    “In the oil industry, the previous administration separated the Petroleum Commission from GNPC, ensuring that GNPC focused purely on commercial operations while the Petroleum Commission handled regulation,” he explained.

     

    Dr. Amin Adam warned that failing to implement a similar structure for GoldBod could create conflicts of interest between regulatory oversight and commercial activities.

     

     

    The GoldBod initiative, proposed by the government, aims to formalize gold trading, particularly within the small-scale mining sector, while promoting traceability to enhance Ghana’s international gold reputation.

     

    The government envisions GoldBod as the sole buyer of gold from licensed small-scale miners through accredited aggregators, as well as the sole assayer. Officials argue that this approach will curb gold smuggling, improve foreign exchange reserves, and stabilize the cedi.

     

    Currently, gold purchasing in Ghana involves multiple entities, including Precious Minerals Marketing Company (PMMC), Bank of Ghana (BoG), Minerals Income Investment Fund (MIIF), private gold aggregators

     

    However, Dr. Amin Adam commended the Bank of Ghana’s Domestic Gold Purchase Programme, launched in June 2021, for significantly boosting Ghana’s gold reserves.

     

    He noted that before the initiative, Ghana’s total gold reserves stood at 8.74 tonnes. However, by the end of 2024, this had increased to 30.5 tonnes—a remarkable improvement in just three years.

     

    “Since independence, Ghana’s gold reserves stood at 8.74 tonnes. But within three years, we increased this to 30.5 tonnes. This shows that the previous gold purchase program was effective,” he said.

    The Bank of Ghana under its new executive management is continuing the domestic gold purchase programme but is discontinuing the gold for oil initiative introduced by the previous administration.

     

    Dr. Amin Adam’s remarks underscore concerns about potential conflicts of interest in the GoldBod structure, urging Parliament to ensure proper oversight in the final legislation.

     

     

  • COPEC tells gov’t to pay close attention to fuel pricing … amidst new pricing floor

     

    COPEC urges gov’t to stabilize fuel prices amidst new pricing floor.

     

     

    Adnan Adams Mohammed

     

    The Chamber of Petroleum Consumers (COPEC) has called on the government to pay closer attention to fuel pricing to ensure stability and prevent excessive increases that burden consumers.

     

    Consumers concerns are rife in the wake of three consecutive fuel price hikes since the beginning of the year, followed by a price reduction in the second pricing window of February.

     

    The latest decrease in fuel prices has been attributed to factors such as drop in global crude oil prices among others.

     

    This comes as the National Petroleum Authority (NPA) has introduced a minimum price threshold for petrol, diesel, and LPG to prevent aggressive price undercutting. Effective February 16 to 28, OMCs and LPGMCs are to adhere to the newly established price floor.

     

    To this effect, petrol and diesel will trade at no less than GH₵12.56 and GH₵13.45 per litre, respectively, while liquefied petroleum gas (LPG) will be priced at a minimum of GH₵14.26 per kilogram.

     

    According to the NPA, the directive seeks to ensure pricing transparency and long-term market sustainability. Companies that fail to comply face regulatory sanctions, as authorities work to prevent market distortions that could threaten industry stability.

     

    Duncan Amoah, Executive Secretary of COPEC believes the government must implement measures to help mitigate sharp increases in the future as cost of fuel has a direct impact on transportation fares, inflation, and overall economic activity.

     

    “If anybody will be able to function within the economic space, fuel will play a very vital role. So for us, whatever importance a government attaches to fuel, it attaches to its own economic indexes. We think this government would have to focus a lot on fuel pricing because the moment that goes up, transport operators will definitely demand for their pound of flesh.

     

    “The market women will start reducing balls of kenkey. Everything will start getting smaller and smaller simply because prices of fuel have gone higher and higher. The is a natural effect on the economy and I think that the government will need to pay a lot of attention to fuel pricing going forward,” he told Citi Business News.

     

     

    Duncan Amoah has also been calling for decisive action to curb the depreciation of the Cedi, which often offsets reductions in fuel prices when global petroleum prices decline.

     

    Prices at the pumps for the first time this year dropped in the second pricing window of February.

     

    Total Energies reduced the price of both petrol and diesel to GHȼ15.99 per litre, down from GHȼ16.15 in the first pricing window of February.

     

    Notably, the OMC had maintained its price at GH¢16.15 while other OMCs increased theirs in the first pricing window of February.

     

    Shell has also reduced the price of diesel to GHȼ15.99 per litre, down from GHȼ16.09 in the first pricing window of February. The price of petrol has also dropped from GHȼ 16.23 to GHȼ15.89 per litre in the second pricing window of the month.

     

     

  • We currently have a completely unpredictable economy in Ghana – Ishmael Yamson.

    Economists Dr Ismael Yamson 

    The unpredictability of Ghana’s economy serves as a nightmare for businesses, Economist Dr Ishmael Yamson, has said.

     

    Dr Yamson explains that businesses need a predictable economy to be able to run their operations effectively but the prevailing circumstances in Ghana currently do not create room for businesses to plan properly.

     

    1. “This period is the most difficult time that Ghanaian businesses have faced. You need a predictable economy, but we currently have a completely unpredictable economy.

     

     

    “The most difficult aspect is that there doesn’t seem to be a real effort from the government or anyone else to change direction, and I can’t see anything indicating that the economy is improving,” he said.

     

    Dr Yamson further observed that businesses are reeling under harsh circumstances..

     

    “If you are a businessman in this economy today, you probably sleep with nightmares. You wake up the next morning not knowing what will hit you next, and it’s been especially tough for manufacturers.

     

     

    “Having spent 30 years with the multinational company Unilever, I can really sense their frustrations in the current crisis. This is because you don’t have control over your costs, absolutely no control.

     

    “All your costs are determined by factors outside your control as a business. If anybody asks me what keeps me awake at night, I will tell you it is the Ghanaian economy,” he told Joy FM.

     

     

  • Oil prices fall as strong dollar, worries over China weigh on sentiment.

     

    Oil production

    Oil prices fell on Friday as a strong dollar, mixed economic signals and concern over China’s economy weighed on investor sentiment.

     

    Brent crude prices fell by 41 cents, or 0.5%, to $84.70 a barrel by 0650 GMT. U.S. West Texas Intermediate crude futures fell 49 cents, or 0.6%, to $82.33 a barrel.

     

    For the week, Brent was down 0.3%, while WTI was trading marginally higher.

     

    The U.S. dollar index climbed for the second consecutive session after stronger-than-expected data on the U.S. labour market and manufacturing earlier in the week. A stronger greenback dampens demand for dollar-denominated oil from buyers holding other currencies.

     

    A lack of concrete stimulus measures from top oil importer China has also weighed on commodities overall, ANZ analysts said in a note. China’s economy grew at a slower-than-expected 4.7% pace in the second quarter, official data showed, sparking concerns about the country’s oil demand.

     

    “Concerns over supply in the short term kept the losses minimal,” ANZ said, however, referring to worsening wildfires threatening production in Canadian oil sands.

     

    Elsewhere on the economic front, Japan’s core inflationperked up in June, leaving the door open for an interest rate hike in the major oil market.

     

    Oil prices found some support in the prior two sessions after the U.S. government reported a bigger-than-expected weekly decline in oil stockpiles.

     

    Analysts at consultancy firm FGE, though, said broader inventory trends look more bearish than expected this month. They noted U.S. crude stocks have drawn at a slower-than-usual pace for this time of the year and global fuel stocks rose last week.

     

    Meanwhile, the OPEC+ producer group isunlikely to recommendchanging the group’s output policy, including a plan to start unwinding one layer of oil output cuts from October, three sources told Reuters on Thursday.

     

     

    Source: Reuters

     

  • Ghana’s credit rating to be upgraded after Eurobond exchange – Moody’s hint.

    Moody

     

     

     

    Adnan Adams Mohammed

     

    Ghana’s economy is likely to witness credit ratings upgrade after it successfully restructured its Eurobonds, Moody’s has hinted.

     

    Currently, Ghana’s rating stands at Caa3 for local currency and Ca for foreign currency. These ratings reflect the government’s ongoing debt restructuring efforts under the G20 common framework, initiated in December 2022.

     

    Moody’s, in a recent report stated that, once the restructuring is complete, all ratings are likely to be aligned at a higher level, though still within the Caa-rating category due to liquidity constraints typically following a default event. The IMF program supports fiscal consolidation and funding access, benefiting from Ghana’s relatively robust institutional capacity.

     

    “..However, high inflation and tight monetary conditions remain key credit challenges”, New York-based ratings agency has said.

     

    The restructuring of local currency debt, excluding Treasury Bills, was completed in 2023. Regarding foreign currency debt, which constitutes nearly half of Ghana’s total debt, significant progress has been made.

     

    Last month, Ghana’s Ministry of Finance announced an agreement in principle with bondholders to restructure $13.1 billion of Eurobond debt, which accounted for 21% of Ghana’s total debt in 2023. Under this agreement, bondholders would forgo around $4.7 billion in principal without state-contingent triggers. This followed a June 12 MoU between the Finance Ministry and the Official Creditor Committee (OCC) to restructure $5.4 billion of official sector external debt. The IMF confirmed on June 28 that both restructurings are consistent with its program parameters, though the OCC has yet to confirm that the bondholder agreement is comparable in debt treatment to the MoU.

     

    Moody’s assesses Ghana’s economic strength at ‘ba2’, balancing the country’s growth potential in the oil and non-oil sectors against its small size and low wealth levels. The ‘caa2’ rating for institutions and governance strength reflects very weak fiscal and monetary policy effectiveness, which led to unsustainable government debt and the need for restructuring.

     

    Ghana’s fiscal strength is rated ‘ca’, indicating very weak debt affordability and a very high debt burden. The ongoing debt restructuring is expected to improve these metrics. Moody’s also highlighted Ghana’s susceptibility to event risk at ‘ca’, driven by elevated government liquidity risk due to high gross borrowing requirements and limited borrowing options.

     

    The outlook for Ghana remains stable, reflecting the ongoing foreign currency debt restructuring. Expected losses for bondholders align with the current ratings’ loss-given-default range. Moody’s indicated that a rating downgrade is unlikely, given the recent progress on foreign currency debt restructuring and the agreement’s terms with bondholders.

     

    However, if the agreement does not proceed, it could derail the debt restructuring process, potentially leading to downward pressure on both local and foreign currency ratings. Moody’s emphasized that they will likely upgrade the local and foreign currency ratings following the exchange of the Eurobonds.

     

    The June 24 agreement provides substantial debt relief to the government, complementing earlier local currency debt restructuring. The restructuring of official sector debt will bring additional, yet unknown, liquidity relief. Post-restructuring, Ghana’s ratings are likely to be higher, though still reflecting liquidity constraints.

     

     

  • Gov’t to maintain fiscal discipline and stability amidst Dec. elections.

     

    IMF

     

     

    Adnan Adams Mohammed

     

    The Ghana government has assured its steadfast commitment to fiscal discipline and responsible spending inspite of pending elections on December 7, 2024.

     

    The government through the Finance Ministry has underscored the importance of maintaining economic stability and pursuing sustainable growth amid the upcoming political season.

     

    Ghana has a track record of managing budget overrun with huge deficits in every electioneering year. This phenomenon has become a cyclical event under every government thereby plunging the country into financial and macro and micro economic constraints. But, addressing journalists at a joint International Monetary Fund (IMF) and MoF press conference, the finance minister is optimistic of breaking the jinx.

     

     

    “Despite the fact that 2024 is an election year, we are committed to enhancing domestic revenue mobilisation and tightening expenditure commitment controls to avoid policy slippages,” Dr Mohammed Amin Adam asserted.

     

    The IMF Board’s has approved the second review of Ghana’s US$3 billion programme, which has led to the immediate release of US$360 million, bringing total disbursements to US$1.56 billion.

     

    The Finance Minister highlighting government’s approach to change the status quo indicated: “We are committed to sustaining our macroeconomic policy adjustment and reforms to fully restore macroeconomic stability and debt sustainability while fostering a sustainable increase in economic growth and poverty reduction.”

     

    Dr. Amin Adam outlined government’s strategic focus on enhancing domestic revenue sources and implementing stringent controls on public expenditure.

     

    This strategy aims to prevent any policy deviations and ensure that economic policies are effectively maintained through the election year.

     

    “This approach is crucial to maintaining economic stability,” Dr. Amin Adam asserted. “We must ensure that our policies are not derailed by the political calendar and that we continue to work towards achieving comprehensive macroeconomic stability and sustainable growth.”

     

     

  • GUTA is complicit in inflation hikes..PNP discloses plans to dissolve it if elected.

    Ghana union of trading associations

     

     

     

     

    The People’s National Party (PNP) has called for the dissolution of the Ghana Union of Traders Association (GUTA).

     

    The party is accusing the union of monopolizing the retail market and driving up prices, which they claim is contributing significantly to the country’s inflation woes.

     

    In a statement issued last week, signed by the its Leader and National Chairman, Janet Nabla, the PNP called on Ghanaians to kick out the union.

     

    “It is time for Ghanaians to take a stand and kick GUTA out of our markets,” the statement said.

     

    According to the party, GUTA and its members have been abusing the free market economy to increase prices, contributing significantly to the inflation we are now experiencing in Ghana.

     

    The PNP highlighted the price disparity as a clear indication of GUTA’s exploitative practices.

     

    “For example, a chair that costs GHS 68 at China Mall is sold for about GHS 175 by GUTA members,” the party pointed out.

     

    The PNP argued that GUTA’s anger towards the Ministry of Agriculture for selling foodstuffs at lower prices while its members continue to inflate prices, is unacceptable.

     

    “GUTA’s actions are eroding the purchasing power of Ghanaians,” the PNP continued, “and it is clear that the union was formed with the intent to destroy this purchasing power. Therefore, it is imperative that we dissolve the union.”

     

    The PNP also accused GUTA of opposing the Ministry of Trade’s efforts to review monopoly laws, which currently restrict retail trade to Ghanaian businesses.

     

    “If they have nothing to hide, why prevent others from entering the market?” the PNP questioned.

     

    The PNP outlined a series of measures they plan to implement should they come to power, aimed at addressing the issues caused by GUTA including: Create a regulatory authority to oversee and control the pricing of essential goods and services such as food, rent, fuel, healthcare, private education, and transportation to prevent price gouging;  Reevaluate and amend the constitution to revise existing monopoly laws, promoting fair competition in the market;  Enact the consumer protection law that the 8th parliament has failed to pass, ensuring robust protections for consumers; and  set up and manage government retail outlets that offer essential goods at regulated prices.

     

     

     

  • 24-hour economy: economist and unionists say ‘could be the game-changer’   

    John Mahama’s 24-hour economy

     

    Adnan Adams Mohammed

     

    Trade Unions and economist have hailed the proposed 24-hour economy for Ghana by former President John Mahama.

     

    They believe it ‘could be the game-changer’ and asked to know a lot more about this ‘great idea’.

     

    The Ex President Mahama during his engagement with Trades Union Congress (TUC) as part of his Building a Better Ghana Tour, last week, proposed the idea of 24-hour economy to help in expanding the economy whiles creating jobs. 

     

    “I think, this one, Comrade [referring to Mr Mahama], you have to take your time, because I can imagine the amount of jobs that this kind of thing will create”, Secretary-General of TUC, Yaw Baah, affirmed idea. 

     

    “Such an economy “could be the game-changer”, explaining: “…You have an opportunity in this country, to work 24 hours: three shifts. So, if you don’t get a job in the morning, you can get it in the afternoon or in the night”.

     

    “So, where are the young people? Get ready for jobs”, Dr Baah charged.

     

    Consequently, in a statement released last week, a US-based economist, Dr Sa-ad Iddrisu, expressed his enthusiasm for Mahama’s policy, stating that it has the potential to be a game-changer for the Ghanaian economy.

     

    Dr Iddrisu highlighted the advantages of such an economic model, stating, “The concept of a 24-hour economy, common in most developed nations, involves three working shifts and offers many advantages.”

     

    Dr Iddrisu highlighted the advantages of such an economic model, stating, “The concept of a 24-hour economy, common in most developed nations, involves three working shifts and offers many advantages.”

     

    He explained that extending business operating hours beyond the conventional 8 am to 5 pm would substantially reduce Ghana’s high unemployment levels.

     

    The need for additional shifts would create job opportunities and offer workers flexible working hours, promoting a sustainable and productive workforce, the statement said.

     

    Dr Iddrisu noted that implementing a 24-hour economy would require enhanced security measures, leading to a reduction in urban crime rates and generating additional employment opportunities within the security forces, particularly benefiting the youth.

     

    He emphasised that a 24-hour economy would drive improvements in essential services like electricity and water supply, which are vital for the economy’s uninterrupted functioning.

     

    “Addressing these services would significantly benefit citizens, as consistent power and water supply are essential for sustaining a 24-hour economy,” he added.

     

    Dr Iddrisu also highlighted the potential for nightlife tourism as a significant benefit of a 24-hour economy.

     

    “Major cities like Accra, Kumasi, Tamale, Takoradi, and Ho could stimulate nightlife tourism, attracting youth and travelers seeking unique experiences and generating additional revenue for local businesses and the overall economy,” he projected.

     

    Among other advantages, he mentioned traffic reduction and increased foreign competitiveness, stating that a 24-hour economy has the potential to alleviate traffic congestion during peak hours and enable Ghanaian youth to compete globally without relocating.

     

    Information technology companies, for instance, could cater to foreign clients around the clock, leading to increased revenue and employment opportunities, he stated.

     

    While acknowledging the numerous benefits of a 24-hour economy, Dr Iddrisu also cautioned about potential challenges, such as an increase in night crimes.

     

    He stressed the importance of vigilant support and engagement from citizens, community leaders, religious figures, and chiefs, as well as careful consideration when identifying sectors within the Ghanaian economy suitable for 24-hour operation.

     

    This balanced approach would avoid overwhelming specific industries.