Business Analyst - August 9

Tuesday, August 9, 2022
Addressing external and domestic headwinds on economy
Govt promises
to be proactive
• Continued from front
Bill, the tax Exemption Bill, the E-Levy
Bill, have all now been promulgated by
Parliament, adding “these fiscal
measures are now in full
implementation mode to support our
fiscal and debt sustainability policies”.
“the government is committed and
is confident that it will successfully
emerge from these challenges in the
shortest possible time as we have
demonstrated the track record to do so
in the Akufo-Addo led Government”, the
statement pointed out.
Government unhappy with S&P
over credit rating
Meanwhile, the government has
expressed disappointment by rating
agency, S&P’s, decision to downgrade
Ghana despite the bold policies
implemented in the 2022 to address
macro-fiscal challenges and debt
sustainability which have been
significantly exacerbated by the impact
of these global external shocks on the
economy.
“our current engagement with the
International Monetary Fund for a
programme, incorporating our
Enhanced Domestic Program (EDP), is
expected to support our drive to restore
and sustain macroeconomic stability;
debt sustainability and promote growth
and job creation whilst ensuring social
protection to achieve our vision of a
Ghana Beyond Aid”, it concluded.
Standard and Poor’s (“S&P”) Global
ratings on Friday, August 5th, 2022
downgraded Ghana’s foreign and local
currency credit ratings from ‘B-/B’ to
‘CCC+/C’ with a negative outlook.
According to S&P, the downgrade is
due to intensifying financing and
external pressures on the economy.
In arriving at its decision, the credit
rating agency considered the lingering
effects of the CovID-19 pandemic and
the severe global shock of the russian
invasion of ukraine on Ghana and the
consequent fiscal and external
imbalances; elevated gross financing
needs in the face of International
Capital Market hiatus; the limited
commercial financing options and the
credible steps taken by government to
fast-track fiscal consolidation and the
passage of key revenue bills.
We’ve adequate
LPG for consumers
• LPG Marketers
Association assurance
tHE LPG Marketers Association of Ghana
has assured Ghanaians of the availability
of more of their products to buy from retail
outlets of its member across the country.
the vice President of the LPG Marketers
Association of Ghana, Gabriel
Kumi, who gave the assurance, stressed
that despite the strike costing them they
believe “it was worth it.”
“If a business owner will shut the
business that feeds them and their families
for almost 4 days, you can imagine
what the situation will mean to them. We
cannot even quantify our loss for the past
few days but we believe it is worth it.
Sometimes, you have to lose to gain” Mr.
Kumi explained.
this assurance comes at the back of
an earlier strike by the association over an
embargo instituted by the government on
the construction of new LPG stations in
2017.
that development left many consumers
stranded at the pumps.
the industrial action was finally
called off yesterday after the ban on the
development of new LPG sites was lifted
in a communique by the national Petroleum
Authority.
However, the Petroleum tanker Drivers
who were also on strike alongside the
LPG marketers Associations say they will
not call off their industrial action until
their concerns with the trackers installed
on their trucks are addressed.
Chairman of the Ghana national Petroleum
tanker Drivers union, George
nyaunu explained that the tracker system
is not favourable to the drivers who
ply Ghanaian roads with petroleum products.
He said, “because of the nature of our
roads, even when you drive from Achimota
to nsawam with several potholes on
the road, the tracker will have been indicating
to nPA that the seal is being tempered
with when nothing of the sort
happened”.
Mr. nyaunu also noted that the drivers
fear they will not be given a listening ear
should the industrial action be called off
hence their decision to not return to the
steering wheels until their concerns are
addressed.
the group is expected to meet with
the national Petroleum Authority later
today and the outcome of the meeting
will determine whether they continue
with their strike.
Govt urged to intensify
implementation of
programmes designed
to expand economy
Accounting and auditing firm, Deloitte
Ghana is advising government to intensify
its implementation of the programmes
designed to expand and
improve the economy such as the agricultural
modernisation programme, industrialisation,
and supporting
businesses to take advantage of the
Africa Continental Free trade Agreement
(AfCFtA).
this is coming after the government
revised its growth rate forecast to
3.7% in 2022, from the earlier 5.8%.
the government considered increasing
domestic inflation and the disruption
in global supply lines from the
ongoing russia-ukraine war.
overall real GDP for the first quarter
of 2022 grew by 3.3% compared to an
initial target of 5.8% for 2022.
Ghana, like other developing countries
on the continent, has suffered severely
from the impact of the general
global economic slowdown caused predominantly
by the russian-ukraine
tensions and the CovID19 pandemic.
revision of initial GDP growth projections
is in the right direction, Deloitte
Ghana said, given the
uncertainties surrounding tensions between
the aforementioned nations
which is expected to aggravate the
country’s current situation.
“the implementation of the Enhanced
Domestic Programme supported
by the International Monetary
Fund is expected to improve the government’s
fiscal situation and re-instill
investor confidence. We expect these
interventions, together with government’s
initiatives on digitalisation and
improvement in commodity prices, to
yield favourable results in the medium
to long term”.
“the country’s present inflation situation
replicates that of the global
economy caused largely by the disruptions
in the global production and trade
of goods and services, coupled with
soaring oil prices. the situation in
Ghana has been worsened by the depreciated
cedi value caused by heightened
investor concerns on the country’s fiscal
stance and food supply challenges
from the shortage of fertilizer supply”,
it pointed out.
With continuous monetary tightening
and weakening supply-side price
pressures, it said, “we expect inflation
to stabilise in the medium term, however,
still above Bank of Ghana’s (BoG)
long term target of 6-10%.