The inflation rate of 50.3 percent posted for the month of November this year, r is one of the trending stories in the Ghanaian press on Thursday.
The Graphic reports that the country’s inflation rate surged to 50.3 percent in the month of November. This is compared with the 40.4 per cent rate recorded for the month of October.
It is the first in 27 years since inflation rate had gone beyond the 50 per cent mark.
The increase is also the 18th consecutive time that the rate had increased, a development which is expected to further worsen the disposal income of workers, and impact on the already high lending rates, among other things.
Last month’s inflation was driven by the sharp rise in the prices of housing, water, electricity, gas and other fuels division which recorded an inflation rate of 79.1 per cent.
This was followed by furnishings and household equipment (65.7 per cent); transport (63.1 per cent); personal care, social protection and miscellaneous goods and services (56.3 per cent) as well as food and non-alcoholic beverages 55.3 per cent.
The education division, and the insurance and financial services division recorded the lowest inflation rates of 10.7 per and 10.2 per cent respectively.
The Government Statistician, Professor Samuel Kobina Annim, who announced this at a news conference in Accra yesterday said, food inflation increased from 43.7 per cent to 55.3 per cent in the month under review, while non-food inflation also rose to 46.5 per cent.
Inflation for locally produced items was 48.3 per cent, while that for imported items increased to 55.1 per cent.
The food inflation of 43.7 per cent was largely driven by water which recorded an inflation rate of 93.2 per cent.
This was followed by milk, dairy products and eggs (75.4 per cent), fruit and vegetable juices (73.1 per cent) sugar and desserts (70 per cent); tea and other plant products (68.1 per cent); cereal and cereal products (66.1 per cent), fish and other seafood (61.9 per cent); fruits and nuts (58.6 per cent).
The rest are ready made foods (54.2 per cent); live animals and meat (52.7 per cent); oils and fats (46.9 per cent), and soft drinks (45.4 per cent).
The newspaper says that Ghana and the International Monetary Fund (IMF) have reached a preliminary agreement for the fund to support the economy with a US$3 billion credit to help resuscitate it and correct fiscal and monetary imbalances.
The proposed three-year extended credit facility (ECF) was approved by the staff of the IMF this week, subject to final approval by the management and Executive Board of the Bretton Woods institution.
A statement from the IMF said the Management and Executive Board approval was conditioned on the completion of a debt restructuring exercise to bring debt stock to sustainable levels.
It is Ghana’s 17th support from the Bretton Woods institution after joining it in 1957.
In the statement issued by the IMF Mission Chief to Ghana, the fund said the preliminary approval would be presented to the IMF Board for final approval after the country has made sufficient progress with efforts to restore debt sustainability.
“To support the objective of restoring public debt sustainability, the authorities have announced a comprehensive debt restructuring. Sufficient assurances and progress on this front will be needed before the proposed Fund-supported programme can be presented to the IMF Executive Board for approval,” the statement said.
Ghana’s debt was assessed to be unsustainable, prompting efforts to restructure the stock to help qualify for the fund support.
A domestic debt exchange programme was launched on December 5, 2022 to swap GHc137 billion of locally issued cedi bonds for four new bonds that will mature between 2027 and 2037.
A restructuring of the foreign component is due to start soon, the Finance Minister, Ken Ofori-Atta said.
The IMF statement said a successful support programme would be frontloaded, with particular effort at protecting social spending and the poor.
Ghana made a call to the IMF on July 1, 2022 for a programme, citing fiscal and monetary imbalances arising from the COVID pandemic and the Russia/Ukraine war.
The Ghanaian Times reports that a new corporate governance code for Ghana has been launched by the Vice President, Dr Mahamudu Bawumia.
The code developed by the Institute of Directors (IoD) will among other things set national standards for corporate governance in the country, promote enterprise and entrepreneurs, promote Ghanaian values, ethical commitments and promote Ghana as a place to do business.
It also harmonises the different industry and sector specific governance code to provide ease of compliance and reference to promote the culture of good corporate governance for both public and private organisations.
Launching the code in Accra yesterday, representative of the Vice President who is also the Minister of State in charge of State Enterprises, Mr Samuel Ato Cudjoe, said the government was delighted to see the new code dovetail into its agenda of promoting good governance.
He said it was more refreshing that the code took into consideration the sustainable development goals which remained an important component of the country’s development agenda.
Mr Cudjoe said the development of the code, demonstrated a critical function which professional organisations would need to succeed.
He said it was important for other professional bodies to take a cue from the IoD and come up with professional codes to promote standards in their organisations.
The development and the launch of the code only acted as the beginning of the work as such the IoD would have to collaborate with the Ministry of Education to incorporate it into school curricular so that the children would be taught about good corporate governance, he said.
Dr Bawumia said beyond fostering collaboration with educational institutions, there was the need to also ensure that the document was available for all.
On his part, the President of IoD, Mr Rockson Dogbegah, said the launch of the code made Ghana the 51st country in Africa to have such a document.
The newspaper says International rating agency, Fitch, has warned of more rating downgrades of African banks in 2023 with Ghana’s debt restructuring expected to affect both domestic and regional banks.
According to its 2023 Outlook report, sovereign debt distress was the major risk to African banks’ financial profile.
“We are most concerned about potential sovereign defaults with many African governments facing very high and increasing debt servicing burdens exacerbated by rising interest rates, US dollar strength and unfavourable external funding conditions. The Ghana debt restructuring will affect domestic as well as regional banks”.
It explained that African banks’ credit drivers will be undermined by both global and domestic shocks in 2023.
“Operating environments will be affected by a combination of high inflation, rising rates, currency depreciation and hard currency shortages, but moderate Gross Domestic Product growth, with no major African economy entering a recession, combined with banks’ relatively good fundamentals and buffers, will prevent a significantly more negative scenario,” it noted.
Fitch further said banks’ sovereign debt risks have increased, with some African governments struggling with debt-servicing burdens and unfavourable external funding conditions.
It stressed that the banks could be downgraded due to further sovereign downgrades but the biggest risk comes from potential sovereign defaults that could affect banks in these countries as well as regional banking groups.
“Asset quality risks will return to be more prominent in 2023. Nevertheless, we assume only a moderate increase in impaired loan ratios in most countries. A sharp fall in commodity prices as a result of the global slowdown or economic developments in China could cause a faster increase in loan quality weakening.”
Fitch continued that banks will however remain profitable, benefitting from rising interest rates and still-satisfactory loan growth (above GDP growth) which will mitigate a moderate rise in credit costs.
It concluded that capitalisation, funding and liquidity remain sufficient, with the latter in particular, underpinning banks’ standalone creditworthiness, stating, “External funding will be scarce and expensive”.
GIK/APA