Press focuses on resumption of upward trend in Ghana’s inflation rate, others

APA – Accra (Ghana)
The report that the consumer price inflation has resumed an upward trend again, increasing from 41.2 per cent in April to 42.2 per cent in May is one of the trending stories in the Ghanaian press on Thursday.
The Graphic reports that after declining for the first four months of the year, the consumer price inflation has resumed an upward trend again, increasing from 41.2 per cent in April to 42.2 per cent in May.
Last month’s inflation was driven by food inflation which increased from 48.7 per cent in April to 51.8 per cent.
Non-food Inflation, however, decreased from 35.4 per cent in April to 34.6 per cent.
Inflation for locally produced items was 36.2 per cent while that of imported items was 43.8 per cent.
The newspaper says that Ecobank Ghana is confident of returning to profitability after the bank suffered after-tax losses of GH¢15.30 million due to impairment from the Domestic Debt Exchange Programme (DDEP).
The bank also recorded a pre-tax loss of GH¢27.21 million in 2022, a reversal of the 2021 pre-tax profit of GH¢893.73 million.
But the Pan African lender reaffirmed its dominance in the banking industry with a total balance sheet of GH¢25.77 billion at the end of 2022.
The bank’s total revenue surged by 40.3 per cent, reaching GH¢2.97billion and demonstrating the bank’s ability to grow its income.
The increase in revenue was primarily driven by higher net interest income, fee-based income, and successful trade and cash management initiatives Managing Director of Ecobank Ghana, Dan Sackey, said in an interview after the bank’s Annual General Meeting in Accra that the bank has recorded net impairment charges of GH¢1.7 billion arising from the debt restructuring by the government.
Mr Sackey said the losses were temporary setbacks, which the bank expects to recover by the end of the year.
“Although the DDEP has resulted in significant impairment losses relating to the bank’s investments in government securities, this is a temporary setback, which we expect to recover quickly from,” Mr Sackey said.
He assured the shareholders that the bank has booked the required impairment and closed the chapter on local bonds and that the Pan African subsidiary was solvent, liquid and the most capitalised after the DDEP.
“We remain confident in our capacity to recover and return to profitability by the end of 2023,” he said.
He said the bank would prioritise the rebuilding of its capital base and liquidity buffers in order to deliver superior Return on Equity (ROE) for its shareholders.
The bank contained its non-performing loans (NPLs) in 2022 and recorded a reduction from 6.22 per cent in 2021 to 5.66 per cent.
The Ghanaian Times reports that the Bank of Ghana (BoG) has cautioned the public to be wary of transacting business with some lending entities in the country.
According to the BoG, it has observed that some 97 entities were engaged in lending money through mobile applications but had no licence to do so.
The BoG in a notice issued in Accra yesterday to Licensed Financial Institutions and the general public, signed by the Secretary, Ms Sandra Thompson, and copied to the Ghanaian Times, said despite the BoG issued notices on the operations of such entities offering loans through mobile applications, such entities continue to operate without licence.
“The Bank has observed the persistent operation of unlicensed entities that are engaged in the provision of loans through mobile applications to the Ghanaian Public in contravention of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930),” the BoG stated.
BoG mentioned some of the unlicensed entities as Flash Cash, GhLending, MoLoan, Rapidcedi, 100 Cedi, Cedi Help, Mascedi Consult, Cediboom, CashLoanPro, Aircash, Akwaaba Payment, Fourcredy, AcornCredit, Ghana Loan, Mach Loans Ghana, and Mbosea.
The others are Prime Loans, Easy Access Loans, Cashpal Online Loan, Happy Loan, Plus Loan, Mega Credit, Boing Cash, Koko Cash, Lemon Wallet, Loan Galaxy, Ukash, Funcash, Quick Cash, Kudi Credit, Soft Kash, TopCredit, CoolCash, Joy Cash, Sikakasa, and Eagle Cash.
“The Bank reiterates that the activities of these entities significantly breach customer data and privacy laws, as well as consumer protection requirements and norms, with unfavourable implications on the integrity and wellbeing of their patrons,” the statement said.
The BoG said it would continue to take action against those entities in collaboration with relevant state agencies to promote the integrity of financial service delivery.
The newspaper says that the government has been urged to focus on the extractive sector to raise revenue as part of efforts to revive the economy under the International Monetary Fund (IMF) Extended Credit Facility programme (ECF), instead of relying on taxes.
The Institute of Fiscal Studies (IFS), an economic and financial think tank, said Ghana could raise more than $4.2 billion annually from the extractive sector to prop up the economy from the current crisis, which is more than the $3 billion government is raising from the IMF over the next three years as part of the ECF with the Fund.
The Senior Research Fellow of IFS, Dr Said Boakye, who made the call during a press conference to assess Ghana’s ECF with the IMF, said Ghana could raise substantial revenue from the extractive sector through active participation of extraction of the country’s mineral resources, joint ventures and production sharing approach.
According to him, studies con¬ducted by the IFS indicated that out of the $22.72 billion worth of minerals produced in Ghana from 2015 to 2018, only $1.48 billion, representing a meager 6.5 per cent was paid as revenue to the government.
“The remaining $21.14 billion, representing 93.5 per cent went to the private producers of the minerals, mainly multinational, even though mineral resources are public endowed from God and should therefore benefit the state, which holds them in trust for the people,” Dr Boakye stated.
He said the country was not making much from its mineral resources because government relied on fiscal approach through concessionary arrangement to generate revenue.
“From IFS’s research, the revenue gap between Ghana and its peers is largely due to the country’s relatively poor revenue generation from the extractive sector, which is the result of leaving the sector in the hands of multinationals through concession arrangements that yield paltry revenue to the state, while the multinationals repatriate billions of dollars in resource rents,” Dr Boakye stated.
He said between 2015 and 2018 only 10.5 per cent of the $14.14 billion supernormal profit generated from mineral production, was paid as revenue to the government, leaving the private sector produc¬ers to keep as much 89.5 per cent of the supernormal profits.
In contrast, Dr Boakye indicated that for instance, in Botswana, mineral revenue constituted about 95 per cent of supernormal profit and about 52 per cent of the total value of mineral production.
In the oil sector, the government of Ghana’s revenue amounts to less than 20 per cent of the total value of production, whereas the Nigerian in that country.
“These wide differences in the extractive sector revenue gener¬ation are because in
GIK/APA