Tag Archives: Ghana economy

Busines, Topstory

Third tranche of IMF’s $360m bailout cash to hit Ghana’s account today

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The third tranche of the International Monetary Fund’s (IMF) 360 million dollar to support Ghana’s ailing economy is expected to hit Ghana’s account today, Monday, July 1.

This follows a successful review of the country’s performance by the Bretton Woods institution.

The IMF said Ghana’s economy under its programme is bouncing back and showing good prospects.

The Finance Minister, Dr. Mohammed Amin Ada, and the IMF’s country manager are expected to hold a joint news conference this afternoon to disclose the details of the latest development.

In an interaction with the media, Minister Amim Adam said he’s hopeful of better days for the economy.

“After meeting the requirements for the second review following the staff level agreement, I am glad to announce that the IMF Executive Board approved Ghana’s second review with an overwhelming support for Ghana.

“This is coming after an earlier approval of the first review in January 2024. This is an important positive development in our journey towards macroeconomic stability,” the Minister added.

 

Source: Myxyzonline.com

Busines, News

7.3m people in Ghana multidimensionally poor – Report

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The latest Ghana Multidimensional Poverty Report published by the Ghana Statistical Service (GSS) has painted a stark picture of poverty levels across the country, revealing that employment and living conditions are the largest contributors to multidimensional poverty.

Employment and living conditions contribute the highest to multidimensional poverty in most regions ranging from 47.8 percent to 12.7 percent and 35.9 percent to 15.5 percent respectively.

According to the Director of Social Statistics at the GSS, Omar Seidu, the root causes of the complex poverty are often linked to educational attainment of household heads.

“Four out of ten households where the head of household has no education, then that household is multidimensionally poor,” he explained.

Key Findings: Widespread Poverty

The report identified that a total of 7.3 million Ghanaians, representing 24.3% of the household population, are multidimensionally poor.

This type of poverty measures deprivation in several dimensions simultaneously, including education, health, and living standards. Of these, 43.8% are experiencing severe poverty.

Rural vs. Urban

Multidimensional poverty affects a significant portion of the rural population, with 36.7% of rural residents falling below the poverty threshold. The severity of poverty is nearly identical in rural (44.0%) and urban (43.4%) areas.

Regional Disparities

The Savannah Region stands out with the highest proportion of multidimensionally poor households, at 49.5%, almost double the national average of 24.3%.

Despite this, the Ashanti Region has the largest number of multidimensionally poor individuals, totaling 959,031.

Seidu highlighted, “However, the actual number of persons who are multidimensionally poor, the Ashanti Region tops (18%) because it has a lot of population. This is more than most of the regions.”

The Multidimensional Poverty report showed that nine regions exhibit alarming poverty levels, with over a quarter of their populations facing multiple deprivations. These regions include Savannah (49.5%), North East (48.1%), Upper East (43.0%), Oti (40.8%), Northern (38.4%), Upper West (37.4%), Volta (27.3%), Western North (27.0%), and Western (25.7%).

Employment and Living Conditions

Employment contributes 32.6% and living conditions 27.9% to multidimensional poverty, making them the primary factors. Health insurance also plays a critical role, accounting for 21.5% of the poverty indicators.

Demographic Insights

The incidence of poverty is notably higher among female-headed households (27.0%) compared to male-headed households (23.0%). Younger household heads below 25 years and older heads above 60 years are also more susceptible to poverty.

Educational Disparities

Educational attainment significantly affects poverty levels. “Four in ten multidimensionally poor persons have never attended school,” the report indicates. Households whose heads have only basic education have a poverty incidence of 20.0%, which is 12.9 percentage points higher than those with tertiary education (7.1%).

Sectoral Impact

Households headed by individuals working in agriculture face the highest poverty rates (34.3%), compared to those in the services sector, who are more than 5.5 times better off, and those in the industry sector, who are 3.8 times better off.

The findings underscore the need for targeted interventions to address the root causes of multidimensional poverty. Enhancing educational opportunities, improving living conditions, and creating sustainable employment are crucial for alleviating poverty and fostering equitable development in Ghana.

 

Source: Myjoyonline.com

Busines, News

Glovo to shut down in Ghana

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Glovo, a prominent food delivery platform, has announced its decision to end operations in Ghana on May 10, 2024, despite significant investment in the last two years to expand their business.

The company conveyed this development to its network of restaurant partners via email, attributing its decision to profitability issues encountered within the Ghanaian market.

Glovo explained that it will shift its focus towards consolidating its presence in other African markets such as Morocco, Uganda, Kenya, Côte d’Ivoire, and Nigeria.

“We are reaching you to communicate that Glovo has made the decision to close our Ghana operations by May 10th 10:00 pm. The decision to end our operations in the country is based on a reassessment of our investment priorities as we focus our resources on the other 23 countries where Glovo operates.”

“As your service provider company will also inform you, the app and the slots will remain active until May 10th, 10:00 pm… after that, the app will close and won’t be able to book any slots.”

In 2021 co-founder of Glovo, Sacha Michaud said the company was investing 1.7 million euros in the company.

“The Ghanaian market is a promising market for Glovo and we will continue to invest to reach all the regions of the country and bring convenience to people,” he said at the time.

Glovo, a technology delivery company established in 2015, with headquarters in Barcelona, Spain, entered the Ghanaian market in March 2021.

Mr. Michaud said Glovo entered the Ghanaian market to help provide the convenience for people to order products online and be delivered to them in the comfort of their homes.

Mr. Michaud during the launch said Ghana’s growing population and increasing internet penetration were good for business.

Ghana, he said, was among the seven countries Glovo was operating in Africa and mentioned other markets including Kenya, Nigeria, and South Africa.

Mr Michaud said Glovo Ghana was working with about 400 partners in Accra such as pharmacies, groceries, electronics, and restaurants.

 

Source: Citi Business

Busines, News

IMF projects 4.4% growth rate for Ghana in 2025

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The IMF says Ghana will record a growth rate of 4.4 per cent by the end of 2025.

This projection was captured in the IMF’s Global Economic Outlook released on the sidelines of the Annual World Bank/ IMF Spring Meetings in Washington DC USA, on April 16, 2024.

The IMF in the report also projected that Ghana will end 2024 with a growth rate of 2.8 per cent. This is similar to what the government had forecast in the 2024 budget.

However, the World Bank believes that growth will hit 2.9 per cent by the end of this year.

Even though there is no official reason assigned for this projection, persons close to the IMF have told JOYBUSINESS the forecast is based on reforms that Ghana is undertaking under the IMF programme which is going a long way to support this economic recovery.

The IMF also believes that if Ghana sticks to the programme conditions, recovery could be faster than earlier projected.

IMF and World Bank upbeat about Ghana’s Economic recovery

The 4.4 Percent Growth Rate that the IMF forecasts for Ghana is “way higher” than the 3.3 per cent that the World Bank has projected for the country in 2025, in its Africa Pulse Report released in April 2024.

For some analysts, it appears the IMF is more optimistic about the recovery of Ghana’s economy from next year, compared to the World Bank’s projection for 2025.

However, the World Bank believes Ghana’s GDP growth rate will hit more than 5 per cent in 2026, returning to the Pre- pre-pandemic era.

The IMF has been forced to revise its projection for Ghana, as the FUND had argued that the Ghanaian economy is showing signs of strong recovery after Ghana signed up for the IMF programme.

The government, on the other hand, is hoping to achieve more than a 3 per cent growth rate in 2025.

In 2023, Ghana’s economy expanded by 2.9%, according to data released by the Ghana Statistical Service.

IMF and World Bank concerns

Speaking in Washington DC USA during the launch of the Global Economic Outlook, Director of Research, Pierre-Oliver Gourinchas was worried about how the current geopolitical tension in the Middle East could present some challenges for the economic recovery of some developing countries including Ghana, if it doesn’t simmer down anytime soon.

He also noted that election-related spending may pose a threat to the recovery of Ghana and other developing countries.

The World Bank Chief Economist mentioned that the GDP growth projection will also depend on Ghana staying on the recovery path by implementing reforms that will aid its recovery.

On how to sustain the recovery, Dr Dabalen said it is important that Ghana stays on the reform path, and maintains fiscal discipline and debt transparency.

 

Source: Myjoyonline.com

Busines, News

‘We don’t have an economy, so what is Ofori-Atta going to advise on?’ – Pianim

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Renowned Ghanaian economist, Kwame Pianim has described as unfortunate the appointment of former Finance Minister, Ken Ofori-Atta as a Senior Presidential Adviser and Special Envoy for International Trade by President Akufo Addo.

Mr Ofori-Atta was relieved of his position as Finance Minister on Wednesday, February 14, and replaced with Mohammed Amin Adam.

Subsequently, the Chief of Staff, Akosua Frema Osei-Opare in a statement dated February 15, announced the new role of the former Finance Minister.

But speaking on the AM Show, Mr. Pianim who is a leading member of the NPP slammed the appointment insisting it has eroded the goodwill that came with the recent reshuffle of ministers.

“Ken Ofori-Atta going is good for the optics. But the person who led us into the financial and economic crisis that we are in, we haven’t been here before… there has never been a time where Ghana has not been able to pay its bills and we are not going to start paying them until 2025 and this is the same guy who gets us kicked out of the Eurobond market, how can he be an envoy?

“I think Nana (President Akufo-Addo) knows that the international community are not that gullible so you don’t send him there. We don’t have an economy now, so what is he going to advise on?

“Too many people are walking around the Presidency. Let’s remove them. Both governments when they come, they remove a minister and he becomes special adviser at the presidency. We don’t want that,” he stressed.

 

Source: Myjoyonline.com

News, Politics

Bawumia must answer his economic questions posed to Mahama – Kwasi Amnakwaa

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The opposition NDC parliamentary candidate for Kumawu, Mr Kwasi Amankwaa has ran down the economic prowess of Vice President Dr Mahamadu Bawumia.

Bawumia, who was recently elected to be the 2024 flag bearer of the governing New Patriotic Party (NPP), is seeking to win next year’s polls to revive the economy of the country after seeking a bailout from the International Monetary Fund (IMF).

In the run up to the 2016 elections, Bawumia, who was the main speaker of the policies of the Akufo-Addo-led NPP, always utilised every opp0ortunity to discredit the John Mahama government, while rallying Ghanaians to rise for change.

Popular among his promises were prudent management of the economy, prioritising productivity to curb inflation and currency depreciation among others.

While President Mahama was campaigning for re-election on the back of social infrastructure for economic transformation, Dr. Bawumia mocked his credentials, citing huge borrowing that had burdened the fiscal space of the country.

The NPP Running Mate noted that the NPP would able to accomplish a lot more with less resources unlike the NDC-led government.

For instance, Bawumia had been trumpeting that the NDC government had huge gold and oil revenue at its disposal but because of  incompetence, President Maham was not able to introduce programmes that would have positive impact in the lives of the citizenry.

Economic Downturn

After seven years of attaining political power, the NPP government has come under fire for the economic nosedive that has skyrocketed inflation and high cost electricity, water and  food.

The government has attributed the economic downturn to the coronavirus pandemic between 2020 and 2021.

However some experts said Ghana recklessly embarked on a borrowing spree before the onset of Covid-19, a sharp contrast to the pledge of utilising state resources to manage the economy.

Again, analysts who backed Bawumia to demonise the IMF bailout under the Mahama administration have expressed shock at how the government crippled the economy and had to rush to the Bretton Woods institution to salvage the economy.

Ghana’s economic status has suffered several downgrades to junk status this year by rating agencies Several following the country’s inability to service its external debts.

Reacting to the hardship and the NPP government’s failure to put things on track on Dwaboase on TV XYZ, Wednesday, Kwasi Amankwaa wondered why Bawumia gathered the courage to step up to lead the NPP after his boss, President Akufo-Addo had sunk the economy.

“Our current economic situation under President Nana Akufo-Addo is worse than the famine situation of 1982 and 1983. Today young people are unable to land jobs; people can’t afford a 3-square meal due to a hyperinflation,” he argued.

“I think Ghanaians must push Dr. Bawumia to answer the same questions he posed to John Mahama in 2015/2016 and described him as incompetent because they are worse off than the very issues he jabbed President Mahama for,”he added.

 

Source: Myxyzonline.com

Busines, News

ISSER calls for dialogue over MoMo compensation impasse

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The Institute of Statistical, Social and Economic Research (ISSER) has expressed worry that if the impasse between electronic money, popularly known as mobile money (MoMo) operators and their agents, is not resolved it will adversely affect financial inclusion significantly.

The policy research institution of the University of Ghana maintained that MoMo agents had become one of the most important drivers of financial inclusion in the country and the disagreement over compensation and threats to restrict withdrawals had the potential to derail the gains made so far.

ISSER, therefore, called for stakeholder dialogue to address the challenges leading to the impasse between the parties, stressing that evidence-based discussion would help find a fair and sustainable compensation model for MoMo agents without jeopardising financial inclusion.

The research institution also called on the regulator to intervene as a referee to bring the two parties to the negotiating table, given the scale and extensive potential of the operation of agents on the livelihoods and welfare of consumers, ISSER said in a statement issued in Accra.

“We encourage all parties to be guided and informed by evidence in negotiations to ensure equity and fairness in the structuring of compensation and value sharing between MoMo providers and their agents.

“Negotiated outcomes should aim to keep agents in business without jeopardising gains made in financial inclusion,” ISSER through its new research initiative, Retail Finance Distribution (ReFinD) research, said.

The context

The Mobile Money Agents Association of Ghana in a release on November 30, announced a decision to restrict withdrawals to a maximum of GH¢1,000 per transaction for a month.

It noted that there was possibility for further action if no favourable adjustment was made to their compensation by the telecommunication companies.

The release by ISSER also indicated that the parties should take into consideration the cost of operation for agents, the pricing mechanisms of the providers and agents, and the profitability and security of agents among others.

“Stakeholders could also consider the compensation structure across peer markets within Africa and Asia to serve as benchmarks.

To this end, ISSER, through its Retail Finance Distribution (ReFinD) research initiative, is committed to serve as a research partner to support the process.”

The release stated that mobile money had become the lead driver of financial inclusion in the country – accounting for about two-thirds of Ghana’s remarkable achievement of 95 per cent financial inclusion rate, according to the Ghana Financial Sector 2021 Demand Side Survey.

The mobile money agents have remained the wheels for extending the reach of MoMo across the country.

It highlights that MoMo agents represent the closest formal financial service provider to consumers across the country, with 92 per cent and 76 per cent of adults reaching a MoMo agent in less than 30 minutes in the urban and rural areas, respectively.

Hence, MoMo agents have become integral to the financial inclusion architecture of the country.

Therefore, any change to their operations will impact the country’s financial inclusion progress.

Demand

ISSER understands that the recent industrial action hinges on a demand for fair compensation for a sustainable business case by the agents.

Under the current compensation structure, a flat fee of GH¢10 is deducted from transactions of GH¢1,000 and above.

The GH¢10 is then shared between the agent (40 per cent) and the MoMo provider (60 per cent).

Thus, a transaction of GH¢5,000 will earn the MoMo agent a commission of GH¢4 under the old model.

With this new action by the agents, a withdrawal of GH¢5,000 will earn the agents GH¢20 since the customer has to make five withdrawals of GH¢1,000 each to receive the desired GH¢5,000.

However, this will cost the customer GH¢50, an increase of GH¢40 from the old rates.

ISSER is of the view that a unilateral action has the potential to derail the gains made in financial inclusion and the development of a cash-lite economy.

Impact

ISSER in the release acknowledged the concern of MoMo agents for an improvement in compensation.

It cautioned that the current unilateral action could be detrimental to gains made in financial inclusion and the transition to a cash-lite economy.

In the medium to long term, the sharp increase in the cost of withdrawal will drive customers away and inadvertently reduce the profitability of agents.

“We call on all stakeholders to resort to evidence-based dialogue for a fair compensation model that will not jeopardise gains made in financial inclusion,” it said.

 

Source: Graphic