The report that Ghana has climbed up the Absa Africa Financial Markets Index (AFMI) despite COVID-19 stalling progress across much of Africa and the Institute of Statistical, Social and Economic Research (ISSER) has tasked the government to reduce the public debt stock to sustainable levels by 2024 are some of the trending stories in the Ghanaian press on Friday.
The Ghanaian Times reports that Ghana has climbed up the Absa Africa Financial Markets Index (AFMI) despite COVID-19 stalling progress across much of Africa, a new Absa report, has said.
The country moved into the top five ranking for the first time in the AFMI, placing fourth with an overall score of 62 out of the maximum 100 score – a recognition of the positive strides in the development of the Ghanaian market.
“Remarkably, Ghana scored 50 and above in five out of the six pillars measured. The policies and initiatives that contributed to Ghana’s improved performance include – adoption of and enforceability of standard master agreements, improved access to foreign exchange through forward foreign auctions by the Bank of Ghana and market transparency works through daily publication of financial asset prices,” the report said.
Ghana’s weakest link however, the report said was the capacity of local investors where it recorded a score of 21.
The Absa Africa Financial Markets Index is produced annually by the Official Monetary and Financial Institutions Forum (OMFIF) – an independent think tank for central banking, economic policy and public investment through extensive quantitative research and data analysis in association with Absa Group Limited.
Now in its fifth year, the AFMI throws light on Financial Markets across Africa and evaluates and ranks financial market development in 23 countries, highlighting the opportunities and challenges within the economies.
The aim is to show present positions, as well as how economies can improve market frameworks to bolster investor access and drive sustainable growth. The index assesses countries according to six pillars: Market Depth; Access to Foreign Exchange; Market Transparency, Tax and Regulatory Environment; Capacity of Local Investors; Macroeconomic Opportunity; and Enforceability of Financial Contracts.
Commenting on the report, Absa Ghana’s Managing Director, Abena Osei-Poku, said: “Expanding and deepening Ghana’s financial markets is vital to our economic development, and it is great to note that Ghana is moving in the right direction with recognizable progress. Ghana’s strong performance across pillars with scores above 50 in five out of the six pillars, shows that stakeholders, led by the Ministry of Finance and the Bank of Ghana have sustained development initiatives through the COVID-19 period”.
The newspaper says that the Institute of Statistical, Social and Economic Research (ISSER) is charging government to reduce the public debt stock to sustainable levels by 2024 through prudent debt management strategy.
In its State of the Ghanaian Economy Report and Review of 2021 3rd Quarter Economic Performance, the research and economic think tank said debt service payments accounted for 62.1 percent of domestic revenue in 2020 (51.9 per cent in 2019) and therefore require drastic action to bring the debt levels down.
In the second quarter of 2021, Interest payments accounted for about 45 per cent of total tax revenue. This ISSER said limits the fiscal space, thereby affecting capital expenditure/Investments needed to stimulate further growth.
Furthermore, it also urged government to increase support to businesses affected by the COVID-19 pandemic to help accelerate the recovery process.
It pointed out that the negative impact of the pandemic on businesses despite the various intervention programmes instituted by government, indicates that government must do more to aid recovery in the economy.
On other recommendations, ISSER, said “crude oil prices have surged and above $70 per barrel with serious implications on transport fares, cost of production, prices of goods and services and livelihoods”. It therefore urged government to take steps to minimise the effects on the economy especially livelihood of the poor.”
ISSER recommended that since the COVID-19 Health Levy and the Financial Sector clean-up Levy seem to be performing better than the others, a critical assessment of these taxes is needed to ascertain whether they are efficient means of raising revenue rather than a “nuisance” tax that stifles private businesses.
Ghana recorded appreciable growth rates since 2020 with oil Gross Domestic Product of 3.9 percent and non-oil GDP growth of 5.2 per cent recorded in second quarter of 2021.
Although the country is among the fastest growing economies, ISSER said higher growth in labour-intensive sectors such as agriculture and manufacturing with high value addition is very critical in order to avoid the jobless growth syndrome.
The Ghanaian Times also reports that the Minister of Energy, Dr Matthew Opoku-Prempeh, has rallied investors and development partners to explore the opportunities in the country’s energy sector to help mobilise resources to achieve its climate change targets.
He said the opportunities existed in utility-scale, distributed generation, mini-grid, and off-grid renewable energy based-electrification systems, clean cooking including promotion and distribution of Liquefied Petroleum Gas, biomass end-user technologies and improve biomass cookstoves.
“Ghana is positioned to partner prospective investors to scale up its renewable energy penetration with respect to remote off-grid communities as part of the last mile electrification”, he said yesterday at the Ghana Energy Day in Glasgow, Scotland.
The event, held at the country’s pavilion at the ongoing 26 United Nations Climate Change Conference of the Parties (COP 26), was to showcase the country’s climate actions in the energy sector.
Dr Opoku-Prempeh said the country’s commitment to achieving its Nationally Determined Contributions to limit global warming to 1.5 degrees Celsius, under the Paris Agreement, was unwavering.
GIK/APA