Banking sector reforms yielding results — BoG

Second Deputy Governor of the Bank of Ghana, Elsie Addo Awadzi

The Bank of Ghana (BoG) has said the current macro-economic gains coupled with recent regulatory changes introduced to the financial sector provides several opportunities for investors to explore.

The central bank, for instance, noted that inflation continues to decline and is now well within its medium-term inflation target band of plus or minus 8 percent. This gain is said to be reflective in the reduction of monetary policy rate from 25 percent in December 2016 to the current 16 percent.

According to the Second Deputy Governor of the Bank of Ghana, Elsie Addo Awadzi, this has also translated into a reduction in banks’ lending rates.

With a strong macro-economic growth, she said, Ghana’s trade balance has consistently improved over the last couple of years, and the gross international reserves rose to 4.8 months of import cover as at the last quarter of last year.

Also, she said the regulatory reforms recently undertaken have ensured that banks are better capitalised and better governed. The move reduced the number of universal banks from 35 to the current 23.

The Second Deputy Governor of the Bank of Ghana, who was addressing investors and businesses from across the world at an investment forum organised in the honour of the Asantehene’s 20th anniversary celebration in Kumasi, added that the decision has already begun to yield some positive results.

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She said there is more stability in the sector, higher capital adequacy ratios, improved liquidity, higher return on capital, and declining non-performing loan ratios.

“We can say that these banks are much better capitalised, more liquid, stronger, better governed and employ better risk management systems and processes to ensure that the monies we deposit with them are safe.”

She added that the BoG has also strengthened its regulatory and supervisory framework to be more aligned with international best practices.

The Bank of Ghana, she observed, remains committed to ensuring that the constraints to increasing credit for the private sector at unaffordable rates are eliminated or reduced.

The ‘World Meets in Ghana Investors’ Forum and Executive Dinner Ball’ (WOMEG) 2019, also dubbed the Otumfuo Investors’ Forum, offered a common platform for top businessmen across the globe to establish contacts and also talk about business.

Some of the top business executives invited to the Forum

The programme, held under the theme ‘Ghana, a promising investment destination in Africa’, sought to create awareness about the numerous business potentials in Ghana and also showcase Ghana to the world as the most attractive investment destination in Africa.

The Chief Executive Officer (CEO) of Ghana Investment Promotion Centre (GIPC), Mr. Yofi Grant, remarked that a plethora of things including democratic stability, improving macro-economic conditions, abundant natural resources and a youthful population makes this country the preferred destination of choice for investment.

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He said government is keen on putting in place a very aggressive plan to transform infrastructure while creating opportunities for jobs and access to the West Africa sub-region. This, he noted, is being realised with the introduction of policies that will make the country a hub for West Africa.

He touted some of the potential areas for investment that exist in various sectors of the economy: from energy, railways development, aviation, tourism, agriculture among others. He added that the GIPC looks forward to engaging businesses that are willing to move into any of these sectors.

The President of the Ghana National Chamber of Commerce and Industry (GNCCI), Nana Appiagyei Dankawoso I, speaking at the forum said as Ghana bids to host the Secretariat of the African Continental Free Trade Agreement (CFTA), there is a need for government to strengthen the regulatory regime and legal institutions.

He noted this will help the country benefit from the huge markets that require local industries produce to meet international standards.

He said the Chamber will continue engaging government to create an enabling environment for the private sector to thrive, while he called on investors to use Ghana as the hub to reach the rest of Africa.

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