Last week begun and ended with very encouraging news on Ghana's economic scene.
Here some titbits....
1. The German Government has cancelled all debts owed by Ghana from commercial loans and cooperation lending, in accordance with Paris Club directions after the country hit completion point under the HIPC debt initiatives in July this year
2. Exports of non traditional goods (ie fruits, flowers and arts and crafts) increased by over 20% to US$306 million for the half year 2004 as compared to same period last year.
3. The management of GCB has announced its intentions to advise directors and shareholders to float additional shares on the Ghana Stock Exchange by the first quarter of 2005. This is to raise equity and to finance an aggressive and modern technology platform for the bank's services. This was disclosed by the Acting Managing Director of GCB Mr Lawrence Adu-Mante to the Business and Financial Times at an annual Delegates Conference of the Bank.
4. The Commissioner of Tax has announced the establishment of fast track commercial courts to deal with persons who evade tax.
5. Future plans for the virtually defunct and distressed national airline Ghana Airways have been published by the domestic press. Under the arrangement Ghana Airways will be liquidated. A new joint venture company is to be set up with Government holding 70% and a strategic partner (operator) Ghana International Airline holding the remaining 30%.
6. Mr Yaw Osafo-Maafo was at a recent World Bank/IMF sponsored reception in Washington DC conferred the covetous award of the Best African Finance Minister in 2004. Mr Osafo-Maafo's award is certainly an achievement particularly in a continent beleaguered by all sorts of external influences, such as ever rising oil prices and unfavorable commodity prices. Over the past 18 months or so, Mr Osafo Maafo has steered the economy into "depeche mode"... positive direction. By September this year most macro economic indicators were in recovery into stability as compared to 2000 when the current government took over. Inflation at the end of August this year was 12.9% down from 23.8% end of 2003. Depreciation year to date is 2.2% as compared to 5.1% at the end of 2003. Interest rates (benchmarked against the 91 day treasury bill) has dropped from 18.66% at the end of 2003 to just above 17.04% at the end of September. Sound economic policies have been reinforced by improved gold and cocoa prices over the past three years. Cocoa production has also been on the ascendancy over the past year hitting record highs and food production and security has also been good.
The real challenge however is the threat of very high oil prices which threaten the stability thus gained. The expectation is that inflation might tip up by end of first quarter 2005 before tapering down should oil prices slide down.
Government also needs to facilitate rapid growth if Ghana is to achieve middle income nation status by 2010. Consequently there should be a refocus to capital formation and mobilization to fund growth whilst also attracting FDI, a daunting task considering that other African countries such as Mozambique, Uganda, South Africa and perhaps Botswana seem better positioned as FDI recipients. China and India, two countries that definitely contribute over half of the world's population currently have huge appetites for FDI, and outside their hug markets may have a thing or two to teach Ghana about attracting FDI.