Analyst confident $1.8 bn cocoa loan will help stabilize cedi
Currency analyst, Derick Mensah, is confident inflows from the cocoa loan syndication would help stabilize the Ghana cedi currency.
His prediction is coming on the back of an initial agreement Monday between COCOBOD and some banks in Paris for the release of 1.8 billion dollars to buy the cash crop from farmers.
Governor of the Bank of Ghana, Dr. Kofi Wampah, had earlier projected that such inflows would shore up the central bank reserves and indirectly lead to the cedi’s stability.
Although some economists have cast doubts about the Governor’s projections – saying the funds will be used immediately to buy cocoa – Financial Analyst, Derick Mensah believes Dr Wampah’s projects are not farfetched.
“So when that money hits the account, the central bank then forwards cedi equivalent to engage in COCOBOD activities. It is the exchange [dollor to cedi] that will be positive for the larger economy,” he said.
Terkper assures measures to absorb country from global shocks
Finance Minister Seth Terkper says government is putting in place adequate measures to protect the economy from the recent external shocks.
Some of the measures include diversifying the country’s exports to improve earnings and improving domestic tax collections to ensure that revenue is not affected badly, because of declining commodity prices.
The Finance Minister disclosed this to Joy Business after he made a presentation on “State of the Ghana Economy: Recent History and Immediate Prospects” at the University of Ghana Business School.
“Our vision is to become a world-class research intensive University by the next decade. Therefore we are focused on carrying out policy relevant research and also engaging policy makers on critical policy issues” he added.
Opinion divided over pineapple exports
Pineapple exporters and the Ghana Export Promotion Authority (GEPA) are sharply divided over factors that have accounted for the decline in foreign exchange derived from exporting fresh pineapples.
The exporters have maintain that the slump in exports is due to the unavailability of financial support for cultivation, high fertiliser cost, low quality inputs, especially pineapple suckers, due to the change in global demand from smooth cayenne to MD2.
But the Ghana Export Promotion Authority (GEPA) shares a different opinion. It explains that the consistent drop in foreign exchange from the export of fresh pineapples is attributable to rising agro-processing companies.
Statistics indicate that foreign exchange derived from exporting fresh pineapple has dwindled from US$25 million in 2004 to 17.9 million as of 2014, a shortfall of US$7.1 million.
Alhassan Andani, Lucy Quist share spoils at CIMG awards
The Managing Director of Stanbic Bank Alhassan Andani was Saturday named CIMG Marketing Man of The Year 2014.
He beat a number of top CEOs to pick the prestigious award at a ceremony held at the Banquet Hall of the State House.
Speaking with Joy News after picking his award, Mr. Andani said businesses in the country, can position themselves in the digital world for greater success.
Airtel-Ghana’s Chief Executive Officer, Lucy Quist was also adjudged the Marketing Woman of the Year, 2014 while Mrs Linda Larbie, Head of Marketing for Coca Cola Equatorial Ghana limited became Marketing Practitioner for the year.
FITCH keeps Ghana’s credit ratings at B but with negative outlook
Ratings agency Fitch has kept Ghana’s credit ratings but has given the country a negative outlook.
According to the agency it kept the rate unchanged, because some progress was made by government in its fiscal consolidation program.
FITCH is however worried that the country’s external position is vulnerable because of the current account position of Ghana.
It however maintains that it might revise the outlook to stable if there is some improvement in the country’s debts position.
Government to withdraw VAT on domestic airfares
The 17.5% Value Added Tax (VAT) being charged on domestic airline fares may be withdrawn in the next budget that is if cabinet yields to pressure from the transport and finance ministries to do so. According to the transport ministry the domestic aviation sector is under a lot of pressure due to lack of incentives and several tax charges. After months of failed negotiations between the domestic airlines, the transport and finance ministries and the Ghana Revenue Authority (GRA), the 17.5 VAT charge was implemented on July 1, 2015.
US$1.8bn cocoa syndicated loan to hit coffers early October
Ghana is hopeful of receiving the US$1.8billion cocoa syndicated loan by first week in October, the Ghana Cocoa Board (Cocobod) has told the B&FT.
“We are happy that this loan will reach Ghana come the first week of October, and will open the crop season as well so that we can use it to purchase the crops,” he said.
The 11-month facility, with an interest rate of 1.19 percent which was oversubscribed by about 44 percent, will fund the purchase of some 850,000 metric tonnes of cocoa beans from licenced buying companies during the 2015/16 crop season.
The transfer of money from lenders to the Bank of Ghana (BoG) will help cushion the country’s gross reserves, while helping stabilise the local currency from its depreciation.
Interest rates will soon reach 42% — Chamber of Commerce
The President of the Ghana Chamber of Commerce, Seth Adjei Baah, has said that the recent hike in policy rate by the Bank of Ghana (BoG) will further push up interest rates, which are already considered among the highest on the continent.
The BoG on Monday increased the Monetary Policy rate (MPR) by 100 basis points to 25 percent from 24 percent, reaching a 12-year high.
However, the head of the chamber, in an interview with the B&FT believed that the central banks’ decision will prove costly and debilitating to the business community. “The more they raise it, the banks will also increase their interest rates. When it went to 24 percent we all complained, hoping it would not be increased again. But look at what has happened; it has been increased.
“I think this will cause interest rates to rise to 42 percent, and that will even be for the commercial banks. If you go to the savings and loans who lend to the SMEs, they are taking around 6 percent per month — making it 72 percent per annum. How can businesses make profits if they are to pay such a high interest rate?” he asked.
Credit: Joy Business, Citi Online, Graphic, BFT
