For the first time since January 2013, on the back of progress and developments in the provision of water, electricity, transport and other non food indices, inflation in Ghana has finally retreated to single digits, 9.6% recorded at the end of April, Quarter One of 2018. The government’s target is 9.8 percent, for the full year.
And according the the announcement issued by the Acting Government Statistician (GS), Mr. Baah Wadieh, to deliver the annual ambition, there are Matters Arising.
Inflation rates for imported goods, food and alcoholic beverages are higher than the average rate. In 5 out of 10 regions of Ghana – the Upper West, Brong Ahafo, Western, Northern and the Ashanti – rates are higher than the national average.
Balancing to Total
‘Hand go, Hand come’ is a very Ghana expression. Essentially, something gives. Business confidence, as measured by the Association of Ghana Industries (AGI) dipped, marginally from 107.9 percent in the last quarter of 2017 to 100.5 percent. Dr. Yaw Adu Gyamfi, President of the AGI, acknowledges that the Business Barometer survey documenting his members concerns over electricity, was taken before the recent reductions in tariffs.
The AGI is also advocating for clarity in Local Content provisions, this time for the construction industry. A theme that the Petroleum Commission, regulator of the new lucrative upstream oil industry, is spearheading with steady focus.
The AGI is also lobbying inter alia, for improvements of payment and others processes governing the importation of goods at the ports and coordination revenue authorities to reduce bureaucracy and address revenue losses. The recently introduced paperless system they say, still has teething problems. Their observations around imports tallies with the GS findings on the impact of imported goods on inflation. Further, the resolution of outstanding payments to local contractors is another area in which the AGI seeks to engage.
The World Trade Organisation has recently announced that economic growth coupled with the efforts of governments in progressing trade, fiscal and monetary polices, imports and exports, meaning trade growth around the world, is expected to remain strong with growth of 4.4 in 2018 (down slightly from 4.7 in the preceding year) and remain growth positive in 2019 albeit at 4.0%. This comes off a low base pre 2017. The WTO warns also that trade tensions and tit for tat retaliation can erode business confidence. That does not appear to be the approach in Ghana today to investors, near and far.
At 50 yards and in traffic, the sight of a large outdoor billboard in Accra, threatening ‘Ghangeria Rising’ can do you no good at all. Vile visual bodily threats came immediately to mind.
The deeply unfortunately branded Ghana/Nigeria bromance aside, the 2 countries share deep seated historical, cultural and political ties. Together they account for 85 percent of the 16 member ECOWAS region’s GDP and 60 percent of the sub region’s teeming population. The organisers sought to explore opportunities in Agribusiness, Banking and Finance, Oil, Power and Gas, ICT as well as business finance and payment systems. The focus, if not the marketing, was spot on.
Ghana seeks to create 750,000 jobs over the next four years by improving food security, increasing agricultural exports and reducing imports. The ambition includes developing farm training, services centers and storage facilities, acquiring machinery including workshops to repair and manufacture equipment.
Spokes of the Wheel
In matters Agribusiness, in the week that the Ghangeria Rising talks were uderway, Ghana’s bid for the flagship One District One Factory (1D1F) initiative received a boost with signature of a framework agreement between the Ministry of Trade and the China National Building Materials Corporation (CNBM) of a US$400 credit facility to support the development of 22 1D1F factories.
According to the published report, the credit facility will be disbursed by seven local banks, CNBM will support the marketing of products – edible vegetable oils, starch and garments, produced by the 22 factories, in China and in the ECOWAS sub region, presumably including Nigeria. There are 216 districts in Ghana, more to go around. The original target for the 1D1F was 51 factories in Year One (2017); 60 more in each of the 2 years after that. We are not there yet. Hand go, Hand come.
One of the ambitions of Ghangeria Rising is to ‘present clear and documented business opportunities and proposals in Ghana and Nigeria ready for investment’. Here is something to dwell on.
At the heart of the Ministry of Food and Agriculture’s projects primed for investment is a $500 million bid to irrigate up to 150 hectares of farm land through the manufacture and installation of pumps and piped water throughout the dry season. The feasibility study for 9 sites is a mere US$9 million.
The 1D1F ambitions are in confectionary and beverage, specifically cocoa and coffee processing factories. By happy coincide, again as Ghanageria Rising was in full sway, the Ghana Cocoa Board announced that it seeks to conclude a a US$1.5 billion loan agreement with the China Export and Import (EXIM) Bank to invest in boosting yields, improving social infrastructure and rehabilitating diseased cocoa trees, these represent some 17 percent of the country’s cocoa stock. The Chief Executive Officer of Cocobod, Mr. Jospeh Boahen Aidoo announced that part of the requested credit facility is to be used to combat global warming by introducing sustainable irrigation to protect the country’s cash crop.
There are other areas of engagement under the 1D1F – processing of foods such grains, spices, edible nuts; industrial raw materials including rubber, cassava, salt, cotton and textiles as well as cement. In the industry of vegetables and Fruits, processing, canning and packaging of tomato, garden eggs, citrus; Domestic Fuel ambitions include charcoal manufacturing and briquettes.
When the headlines have settled and the ghastly billboards have come down, across the 10 regions of Ghana, the brand that will resonate is Ghana Back At Work. The spokes of the wheel must work together – Hand Go, Hand Come.