The report that the Bank of Ghana (BoG) is partnering with two institutions to create opportunities for international trade and financial cooperation for micro, small and medium enterprises (MSMEs) in the country is on of the trending stories in the Ghanaian press on Monday.
The Graphic reports that the Bank of Ghana (BoG) has partnered with two institutions to create opportunities for international trade and financial cooperation for micro, small and medium enterprises (MSMEs) in the country.
The central bank signed a memorandum of understanding (MOU) with its Singaporean counterpart, the Monetary Authority of Singapore (MAS) and the Development Bank Ghana (DBG) last week to develop the Ghana Integrated Financial Ecosystem (GIFE).
A joint statement from the three partners said the agreement aimed to enhance financial capabilities and access for MSMEs in the country.
It said it would help them to generate greater opportunities for trade and financial services cooperation between Singapore and Ghana.
“Over time, it is envisaged that the integrated financial ecosystem model can serve the Asia-Africa SME trade corridor more broadly,” the statement said.
The statement explained that GIFE would offer an open digital infrastructure for MSMEs in Ghana and Singapore in four key areas.
It listed the areas to include SME financial empowerment programme to help MSMEs build foundational digital financial literacy skills and gain a good understanding of cross-border financial services.
It said it would also help MSMEs in Ghana and Singapore to expand their international business connections in Asia and Africa, through a network of business-to-business electronic-commerce platforms.
“The DBG and partner financial institutions will provide digital trade finance and guarantees for eligible MSMEs through a digital platform.
The newspaper says that the Minister of Lands and Natural Resources, Samuel Abu Jinapor, last Saturday co-chaired the first ministerial meeting of the Forests and Climate Leaders’ Partnership (FCLP), with a call on developing countries to get their act together to tap into the $20-billion fund the partnership was mobilising to implement nature-based climate actions.
Mr Jinapor, who co-chaired the meeting with the United States’ Special Presidential Envoy for Climate, John Kerry, at the ongoing United Nations Conference on Climate Change (COP27) at Sharm El-Sheikh in Egypt, said the fund was a boost to the climate financing agenda.
Discussions at the meeting, which was attended by 28 ministers and five observer countries, centred on the development of a framework for 2023 and beyond to help achieve the objectives of the partnership.
Among the core objectives of the FCLP is to provide a rallying point for governments and partners to work to implement solutions that reduce forest loss, increase restoration and support sustainable development.
It is also a platform for Heads of State and Government and their ministers to combine their political efforts to accelerate global action to halt and reverse forest loss and land degradation by 2030, while delivering sustainable development and promoting an inclusive rural transformation.
In an interview with the Daily Graphic after the ministerial meeting, Mr Jinapor said President Nana Addo Dankwa Akufo-Addo’s chairmanship of the Climate Vulnerable Forum (CVF) and Ghana’s co-chair of the FCLP was an opportunity for the country to mobilise resources and rally support for sustainable climate financing.
“As a respected member of the international community, the government is fully committed to implementing local solutions and supporting the global climate action,” he stressed.
He assured the global community that he would use his leadership of the new partnership to accelerate Ghana’s climate actions and those of other countries.
The Ghanaian Times reports that the Bank of Ghana (BoG) says it has not financed the government with more than GH¢70 billion since 2021 to run the economy.
“At the end of December 2021, claims on government rose to GH¢34.8 billion, and have recently risen further to GH¢40.2 billion at the end of October 2022, reflecting an increase of GH¢5.3 billion in 2022, which was the result of pre-mature unwinding of positions held by some banks,” the BoG said in statement copied to the Ghanaian Times in Accra on Friday.
The statement is in response to claims made by the Member of Parliament for Bolgatanga Central, Isaac Adongo, last week alleging that the BoG had “illegally” financed government to the tune of ¢70 billion or more since 2021.”
The BoG explained that the current total claims on government “Represent the stock of debt held by the BoG and reflect accumulated claims for over 20 years, including legacy assets such as the Telecom Malaysia Bonds issued in relation to the privatisation of Ghana Telecom and Tema Oil Refinery Bonds.”
The statement said at the end of December 2020, the claims on government stock position stood at GH¢34.1 billion and included the GH¢10 billion COVID-19 bond purchased by the BoG.
The BoG explained that its recent disbursement to the government were resources granted by the International Monetary Fund, among others, under the Special Drawing Right (SDR) and Rapid Credit Facility (RCF) programme to help mitigate the impact of the coronavirus pandemic on the economy.
The statement said the SDC and the RCF were denominated in US dollars and revalued in line with exchange rate changes and that the claims had increased by GH¢17.8 billion from beginning of the year to October 2022.
“This reflects a revaluation of these claims in the Bank of Ghana’s books to account for exchange rate developments. This figure does not reflect Bank of Ghana’s lending to government but rather resources from the IMF that were required to be passed on to government in line with approvals by the IMF Board. And the increase in the amount in 2022 does not reflect new cash transactions but rather merely a book-entry figure, driven in large part, by the depreciation of the currency,” it said.
It said due to the downgrade by the international rating agencies, there were no inflows from external sources to support budget implementation this year, and thus the BoG supported government to the tune of GH¢25.6 billion as at October, saying “This support is temporary and consistent with crisis management as we work with the IMF to design a debt operation that will lift the burden of debt servicing off the budget.”
The statement further said, BoG’s total outstanding swaps, repurchase agreements and sale and buy back transactions stood at US$2.4 billion as at end October 2022, of which only US$720 million and was expected to mature by the close of the year.
“We wish to assure the public that the BoG is a reputable institution, which is professional with high standards. We have been recognised and awarded internationally on this score and all operations and policy decisions of the bank are conducted with a high sense of duty and integrity to the best interest of the economy,” the BoG said.
The newspaper says that Economics Professor, Godfred Bokpin, has expressed worry about the private sector being crowded out from the benefits of the African Continental Free Trade Area (AfCFTA).
This is due to the unfavourable tax regime in the country.
Speaking to Myjoyonline.com, Prof. Bokpin said the high cost of borrowing coupled with some nuisance taxes are having severe impact on Ghanaian businesses intending to trade favourable under the continental programme, compared to their peers.
Speaking to Joy Business, Prof.Bokpin said unless the current tax regime in the country was reviewed, Ghanaian businesses would struggle to compete under the pact.
‘If you look at our tax basket, it is heavily indirect based. All of that contributes to high production cost of doing business.
“If you put that together with electricity restrictions on the growth drivers of the economy, Ghanaian private sector has to borrow at a rate in excess of 35 per cent…..you can’t compete,” he said.
He pointed out that all these challenges are making it difficult for Ghanaian businesses to compete under AfCFTA.
“So you can see the fundamentals and can project how that can affect the Ghanaian private sector and the ability to maximise the participation of the AfCFTA. That’s the point that we are talking about.
“As it stands now, we don’t get the clear picture and direction that government wants to create the enabling environment that guarantees private sector leadership,” he added.
GIK/APA