Cedi once again Africa’s worst performing currency; fourth in the world – Adongo

Member of Parliament for Bolgatanga Central and Member of Parliament’s Finance Committee, Isaac Adongo has claimed that the Cedi has “reverted to its unenviable record of being the worst performing currency in Africa.”

According to him, the Cedi is currently the fourth worst performing currency in the whole world, sourcing Bloomberg.

Delivering a lecture in Accra on Thursday under the auspices of The Coalition For Restoration (CFR, a pressure group affiliated to the opposition National Democratic Congress (NDC), just a day after Vice President Dr. Mahamudu Bawumia, the Head of the Economic Management Team addressed a Townhall meeting on Ghana’s Economy, Hon. Adongo admonished Veep Bawumia to desist from causing Ghana disgrace on the international community.

“His Excellency the Vice President made a lot of profound statements yesterday not supported by facts. And so even as the people of Ghana were contemplating whether it was the economy that we knew or that we’ve suddenly been transported to Heaven, the international community began to give a verdict. I’m sad to give a report and give a word of caution to his Excellency the Vice President not to once again plunge this country into an international disgrace.

“Yesterday Bloomberg reported that hours after the Vice President made some of the claims that actually frightened them, the Cedi reverted back to its unenviable record of being the worst performing currency in Africa. Bloomberg reported that yesterday the Cedi was trading at 5.61 at a time that the Vice President was in Ghana celebrating this abysmal performance and a disgrace to us from the international community. This time it was accompanied by us now becoming the fourth-worst currency in the whole of the world.

Mr Adongo added: “This is a very disturbing spectacle for many reasons. The people of Ghana just recently went to beg the international community to lend us $3bn, we assured them that with the exit of the IMF we were going to be very disciplined and we were going to ensure that the tight rope that we have followed in order to sustain the economy and to build the buffers that they so seriously wanted us to build will be maintained. We had the Vice President telling the whole world that we didn’t mean to follow the IMF, in fact, it was because of the IMF we couldn’t waste the hard-earned currency to support the cedi.”

Cedi begins to tame US dollar

Government’s announcement of fresh dollars into the economy to arrest the unbridled appreciation of the United States dollar has succeeded in redeeming some value for the local currency against the greenback.

The dollar was trading at GH¢5.60 a few weeks ago but within just a week of the announcement of Ghana’s ability to successfully raise $3 billion from international financial institutions through a three-tranche Eurobond which attracted more bids than the country asked for, the dollar has ceded some 80 pesewas to the local currency.

On Tuesday, March 19, 2019, at the close of a roadshow in London, the subscription for the 2019 sovereign bond had swelled, resulting in orders totaling $21 billion.

DGN Online checks on the forex market on Monday, March 25, 2019, showed that a dollar was selling at GH¢4.70. The dollar is expected to further lose value against the cedi when the $3 billion is injected into the economy.

At the Global Exchange Forex Bureau at Mallam, Accra, $100 exchanged for GH¢470.

On 2nd January, the cedi sold at GH¢4.83 to a dollar, losing value without fail to end January at GHC 4.95. The loss continued through February beginning at GHC 4.95 to a dollar and hitting GH¢5 by February 9th.

Ending February at GH¢5.16 to a dollar on the interbank foreign exchange market, it further depreciated by 8 pesewas to reach GH¢5.24 by March 12 and continued to maintain that position for close to a fortnight before taking an ascent to sell at GH¢5.16 on March 22, 2019.

Analysts have meanwhile indicated that borrowing to support the local currency was not sustainable.

They have appealed for the introduction of long term measures to develop the structural needs of the economy and help check the depreciation.

Deposits increase at GN Savings as local & regional banking enjoys success

Management of GN Savings says customer confidence is gradually being renewed in them due to the successes the company has been recording in recent times.

According to the Chief Executive Officer of the company, Issah Adam, the recent successes can be attributed to the measures the financial institution has put in place to ensure that customers of the company are served better.

According to Mr Adam, the difficulties GN Savings encountered as a result of the recent banking crisis demanded that they reviewed operations of the company and adopt measures that will secure the interest of depositors. This he says, necessitated the introduction of the LRB (Local, Regional Banking) concept in December 2018 which he says has chalked considerable success bringing life to most of their banking halls dotted around the country.

To him, LRB is simply a means to serve people better while the shareholders of the financial institution made efforts to inject more capital into the business to address the liquidity challenges they are currently facing.

“Today, we want you to know about the strategy we have adopted to guarantee unlimited withdrawals of your deposits when the need arises. We call it LRB (Local, Regional Banking). Since we started LRB, in November 2018, we have chalked some successes. LRB assures those who bring new deposits, get unrestricted access to their funds.”

“If a customer brings GH¢1,000 on Monday, they can come back on Tuesday and withdraw some or all of it. They can ask us to send part of the money to another branch in a different region and get the money there. It is working for traders, lawyers, students, companies with customers spread throughout the country and others. This has resulted in strengthening some of our branches, making them relatively liquid. It is bringing back customer confidence step by step, one person at a time,” he said.

With the new LRB concept, Mr Adam is challenging Ghanaians especially the market women who were doing business with the company in the recent past simply because GN Savings provided convenience to come and give it a try.

“We highly recommend this to everyone. Come and give this a trial. And enjoy safety and convenience. It remains a fact that GN Savings is the only licensed financial institution in many towns across Ghana”.

He used the opportunity to thank the Ghanaian banking public for their patience during the difficult days and promised that going forward, he was going to focus on customer driven-initiatives that will ensure that whoever that saves at GN Savings and Loans leave their banking halls fully satisfied with the services rendered them.

With close to 300 locations dotted across the length and breadth of the country, GN Savings provides the safest means of transferring money as one can deposit money in Accra and readily have it available in other locations. This, some market women say have drastically reduced losses during highway robberies and other thefts while on the road to the market centres.

Using short term measures to support cedi not sustainable — Banking Consultant

The local currency, the Ghana Cedi experienced its strongest performance against the US Dollar in the past three months after gaining 8 pesewas to end Friday March 22, 2019, selling at GHC 5.16 on the interbank foreign exchange market.

Historically, the Ghanaian Cedi reached an all-time high of 5.60 against the dollar at some forex bureaus in March 2019 and a record low of 0.90 in July of 2007.

The currency started 2019 on the Central Bank’s Interbank Foreign Exchange Market on 2nd January selling at GHC 4.83 to a dollar, losing value consistently to end January at GHC 4.95.

The losing trend continued through February and March, beginning the second month at GHC 4.95, hitting the GHC 5 Cedi Mark by February 9th.

After ending February on the Interbank Foreign Exchange Market selling at GHC 5.16 to a dollar it rose to GHC 5.24 by March 12 maintaining that position for about two weeks before experiencing its biggest gain of 8 pesewas against the dollar to sell at GHC 5.16 pesewas on March 22, 2019.

Government and some analysts have expressed optimism the cedi will appreciate further.

While admitting that the current steps being taken by government are positive, Banking Consultant Dr. Richmond Attuahene however stated that the strengthening of the Cedi can only be sustained when long term measures are used to develop the structural needs of the economy.

“In the short-term we expect it to come down but in the medium-term to long-term like a year and a year after, it will still crawl back to the position it has been,” he warned, adding that “the factors have not been addressed”.

He stated that borrowing to support the local currency is not sustainable.

“I’ve always been saying that we need to identify exportable items or strategies that we want to shore-up the currency. The only solution for this nation is to look at the export base and begin to think about what we can add to the cocoa rather than the oil.”

Dr. Attuahene however stressed that Ghana will fail to achieve long-term currency sustainability by depending on currency support from proceeds from bonds and other loans.

“It is not a proper strategy for the nation. You defend borrowing to support your currency? It is never done anywhere. You must export more and then import less to be able to have reserves. So if Ghana as a nation wants to stop this downward trend that brings panic we need to have a proper export development strategy, implementable strategy otherwise come the next one year we will be in the same shoes. We need to have a proper strategy for the non-traditional exports like pineapple, salt, cashew and soya. To me it is the easiest way to insure the currency.”

Government assures beverage industry of zero duties on imports of equipment

A Deputy Minister of Trade and Industry, Robert Ahomka-Lindsay has called on Small and Medium Beverage Enterprises to take advantage of the opportunities in the beverage industry for the industrial transformation of Ghana.

Speaking at the 3rd Edition of the Ghana Beverage Awards Mr. Ahomka-Lindsay lauded the organizers of the awards, Global Media Alliance for initiating the event under the theme ‘Drink Ghana, Inspiring Excellence in Ghana’s Beverage Industry’ as part of the “See Ghana, Eat Ghana, Wear Ghana, Feel Ghana” campaign.

“This is a huge opportunity for Small and Medium Beverage Enterprises to provide entries with different flavours and new types of beverages for consumption. If we look at the huge number of drinks including fruit juice the country imports into the market, we can see the clear opportunities for the beverage industry.” he said.

Mr. Ahomka-Lindsay said the Ministry of Trade and Industry is prepared to support Small and Medium beverage Enterprises with incentives such as zero duty on all equipment for manufacturing beverages, subsidization percentage for investments and a duty-free on raw materials for manufacturers with difficulty acquiring raw materials under the 1 District 1 Factory government initiative.

He stressed on the need to encourage Small and Medium beverage companies in the industry because of the benefits they can bring to Ghana’s development.

“They can do a lot for Ghana by offering wealth and job opportunities locally and internationally. Everything starts with a first step,” he said.

He concluded by congratulating the winners for the categories and all players in the beverage industry present.

Cedi depreciation causes fuel price hike for a second time in March

Some Major Oil Marketing Companies (OMCs) have slightly adjusted upward the prices of petrol and diesel.

Checks at various fuel stations showed that Shell and Total have increased the prices of petrol and diesel by six pesewas.

The two companies are selling a litre of petrol and diesel for GHS5.24 representing a 1.16 percentage increase from the previous price of GHS5.18.

This is the second increase in the prices of fuel in a month.

The Institute of Energy Security(IES) which predicted the increase has attributed the hikes to the recent depreciation of the cedi.

“Even though we have seen the currency pick up some strength against the dollar this came a little too late and way into the pricing window after BDCs and oil marketing companies have transacted their bills in the movement of products,” Mikdad Mohammed a Research Analyst at the IES told Citi Business News in an interview.

The first increment, which occurred after the first pricing window in the first week of March was also attributed to the depreciation of the cedi and the increase in the cost of Brent Crude on the World market.

“We have been monitoring the market since the first pricing window in March which we projected that prices were picking up based on the cedi fundamentals of the market as we know them to be. You look at Brent crude price, finished product price, the cedi depreciation against the dollar and we look at stock level,” said Mikdad.

However a major state oil company, GOIL is yet adjusted its price.

OMCs like Allied and Glory Oil are also yet to increase their prices.

Ghana’s macroeconomic outlook better than five years ago – IMF

Ghana’s macroeconomic outlook is now better than five years ago when she went in for the IMF programme Dr Albert Tourna Mama, Ghana’s Resident Representative at the International Monetary Fund (IMF), has said.

He noted that for the first time in a decade, Ghana achieved a primary surplus in 2017 and 2018, while the key macroeconomic indicators were trending positively.

He expressed the belief that some efficient policies rolled out by the Bank of Ghana (BoG) and the Finance Ministry played a pivotal role in the success story.

Dr Tourma Mama, who is a member of the committee that reviewed Ghana’s IMF programme recently, announced that it would present its final report to the Executive Board of the IMF yesterday, March 20, and chart the way forward towards sustaining the country’s economy for accelerated growth.

Dr Tourna Mama made the remarks when contributing to a panel discussion on Ghana’s macroeconomic environment and how it could attract private sector investment at the ongoing Africa Climate Week (ACW) at the Accra International Conference Centre.

The 2019 Africa Climate Week (ACW) is being held under the theme: ‘Climate action in Africa: A race we can win’.

The five-day event, organised by the United Nations Framework Convention on Climate Change (UNFCCC), the Government of Ghana and United Nations Development Programme (UNDP), brought together diverse actors from the public and private sectors to firm up the action plan to deal with the negative effects of climate change.

For instance, he said, the BoG cut the monetary policy rate by more than 400 basis points, and at the last Monetary Committee Meeting in January, this year, the bank also cut the monetary rate from 100 per cent to 60 per cent, which were positive achievements.

Those positive outcomes, Dr Mama said, culminated in the high rating given the nation by the Standard and Poor’s, an international rating agency, last year in addition to the high patronage of the government’s Eurobond issued on the global market last year.

He said one of the key conditions with the IMF programme was to strengthen domestic revenue mobilisation and create space for increase in taxes.

Therefore, the landmark legislation presented to Parliament last week was to rationalise tax exemption and increase investment in certain sectors of the economy as well as increase financial viability of some public institutions.

Mr Yaw Anso, a Senior Policy Advisor to the Ministry of Finance, said government’s policies, rolled out in 2017, aided in stabilising and sanitising the macroeconomic environment, which would attract investment to drive economic growth.

He said the nation required innovative solution hence it implemented regulatory and legal policies to engender industrial revolution in addition to the Planting for Food and Jobs, Free Senior High School, and the Revised Company’s Code among other policies.

Mr Anso, for instance, said the country’s economic growth moved from 3.6 per cent in 2016 to 8.1 per cent in 2017 and 5.6 per cent in 2018 adding that that momentum would be maintained.

He said the country’s fiscal deficit of over seven per cent had reduced, inflation declined from 15.4 per cent to 9.2 per cent and monetary policy rate down to 17 per cent from 25 per cent.

In spite of the recent turbulence experienced by the local currency, the exchange rate remained relatively stable, while government was putting in place aggressive measures to tackle the regulatory environment, which determined the environment for doing business in order to improve Ghana’s ranking on doing business, he said.

Mr Anso said it was laudable that the “Ghana Beyond Aid” Committee, which he was a member, submitted its report to the President and one of the policy’s key pillars was to ensure economic sustainability without hurting the business environment.

The Policy Advisor said government had been supporting start-ups, entrepreneurs and venture capitals and believed in leveraging on the private sector in the quest to drive green economic growth revolution.

He said the nation had sufficient expertise to ensure fiscal discipline, especially with the passage of the Fiscal Responsibility Act, to cap annual budget deficit to five per cent of the Gross Domestic Product.

More than 1,000 participants across Africa and the world are attending the ACW conference and these include government agencies, international partners, donor agencies and multi-stakeholders to discuss action plans to mitigate the negative impact of climate change.

The ACW serves as a lead-up to the UN Secretary-General’s Climate Summit in September, this year.

Aviation industry receives boost, parliament passes civil aviation amendment bill

Parliament on Friday, March 8, 2019, passed into law, subject to the assent of the President, an amendment of the Ghana Civil Aviation Act 906 (2016) to further improve safety and strengthen security in the aviation industry of the country.

In a statement from the Aviation Ministry, the Minister for Aviation, Joseph Kofi Adda noted that the amendment is to ensure that Ghana is compliant with the International Civil Aviation Organization (ICAO) standards.

He said, “the aviation sector is already doing well by global standards and is ranking highly but this amendment is to further take into consideration, deficiencies identified in various assessments of the structures and operational systems of air navigation services and the effective implementation of the state safety programmes and accidents investigations.”

This is expected to lead to the setting up an independent outfit under the Minister for the Accidents and Serious Incidents investigations in the sector.

The amendment would also make provision for the funding of the independent outfit to ensure effective work by its personnel.

The powers of the Director General of GCAA would also be enhanced to allow for access for accidents investigations and for information as well as to be able to prevent flights by unqualified personnel.

The decoupling of the GCAA, segregating the regulatory function and navigation services provision would be undertaken based on this amendment.

With this, a new outfit for the Air Navigation Services would be established under the amendment if assented into law by the President.

ICAO Audit

Following this current amendment, the Aviation Ministry would pursue additional regulations that would be passed early enough for an audit by the International Civil Aviation Organisation (ICAO) later this month.

In sum, the amendment has a far-reaching significance in terms of Ghana’s rating improving and bringing the country into the Category 1 Status to qualify under the Federal Aviation Administration (FAA) for Ghanaian flights to enter into the United States of America.

In recent times there have been major initiatives such as infrastructural projects and systems enhancements which combined with this legislation, in all gears up the nation to become the aviation hub in the sub-region.

Mansa Musa: The richest man who ever lived

Amazon founder Jeff Bezos is the richest man in the world, according to the 2019 Forbes billionaires’ list released this week. With an estimated fortune of $131bn (£99bn) he is the wealthiest man in modern history.

But he is by no means the richest man of all time.

That title belongs to Mansa Musa, the 14th Century West African ruler who was so rich his generous handouts wrecked an entire country’s economy.

“Contemporary accounts of Musa’s wealth are so breathless that it’s almost impossible to get a sense of just how wealthy and powerful he truly was,” Rudolph Butch Ware, associate professor of history at the University of California, told the BBC.

Mansa Musa was “richer than anyone could describe”, Jacob Davidson wrote about the African king for Money.com in 2015.

In 2012, US website Celebrity Net Worth estimated his wealth at $400bn, but economic historians agree that his wealth is impossible to pin down to a number.

The 10 richest men of all time

*Mansa Musa (1280-1337, king of the Mali empire) wealth incomprehensible

*Augustus Caesar (63 BC-14 AD, Roman emperor) $4.6tn (£3.5tn)

*Zhao Xu (1048-1085, emperor Shenzong of Song in China) wealth incalculable

*Akbar I (1542-1605, emperor of India’s Mughal dynasty) wealth incalculable

*Andrew Carnegie (1835-1919, Scottish-American industrialist) $372bn

*John D Rockefeller (1839-1937) American business magnate) $341bn

*Nikolai Alexandrovich Romanov (1868-1918, Tsar of Russia) $300bn

*Mir Osman Ali Khan ( 1886-1967, Indian royal) $230bn

*William The Conqueror (1028-1087) $229.5bn

*Muammar Gaddafi (1942-2011, long-time ruler of Libya) $200bn

The golden king

Mansa Musa was born in 1280 into a family of rulers. His brother, Mansa Abu-Bakr, ruled the empire until 1312, when he abdicated to go on an expedition.

According to 14th Century Syrian historian Shibab al-Umari, Abu-Bakr was obsessed with the Atlantic Ocean and what lay beyond it. He reportedly embarked on an expedition with a fleet of 2,000 ships and thousands of men, women and slaves. They sailed off, never to return.

Some, like the late American historian Ivan Van Sertima, entertain the idea that they reached South America. But there is no evidence of this.

In any case, Mansa Musa inherited the kingdom he left behind.

Under his rule, the kingdom of Mali grew significantly. He annexed 24 cities, including Timbuktu.

The kingdom stretched for about 2,000 miles, from the Atlantic Ocean all the way to modern-day Niger, taking in parts of what are now Senegal, Mauritania, Mali, Burkina Faso, Niger, The Gambia, Guinea-Bissau, Guinea and Ivory Coast.

With such a large land mass came great resources such as gold and salt.

During the reign of Mansa Musa, the empire of Mali accounted for almost half of the Old World’s gold, according to the British Museum.

And all of it belonged to the king.

“As the ruler, Mansa Musa had almost unlimited access to the most highly valued source of wealth in the medieval world,” Kathleen Bickford Berzock, who specializes in African art at the Block Museum of Art at the Northwestern University, told the BBC.

“Major trading centres that traded in gold and other goods were also in his territory, and he garnered wealth from this trade,” she added.

The journey to Mecca

Though the empire of Mali was home to so much gold, the kingdom itself was not well known.

This changed when Mansa Musa, a devout Muslim, decided to go on a pilgrimage to Mecca, passing through the Sahara Desert and Egypt.

The king reportedly left Mali with a caravan of 60,000 men.

He took his entire royal court and officials, soldiers, griots (entertainers), merchants, camel drivers and 12,000 slaves, as well as a long train of goats and sheep for food.

It was a city moving through the desert.

A city whose inhabitants, all the way down to the slaves, were clad in gold brocade and finest Persian silk. A hundred camels were in tow, each camel carrying hundreds of pounds of pure gold.

It was a sight to behold.

And the sight got even more opulent once the caravan reached Cairo, where they could really show off their wealth.

The Cairo gold crash

Mansa Musa left such a memorable impression on Cairo that al-Umari, who visited the city 12 years after the Malian king, recounted how highly the people of Cairo were speaking of him.

So lavishly did he hand out gold in Cairo that his three-month stay caused the price of gold to plummet in the region for 10 years, wrecking the economy.

US-based technology company SmartAsset.com estimates that due to the depreciation of gold, Mansa Musa’s pilgrimage led to about $1.5bn (£1.1bn) of economic losses across the Middle East.

On his way back home, Mansa Musa passed through Egypt again, and according to some, tried to help the country’s economy by removing some of the gold from circulation by borrowing it back at extortionate interest rates from Egyptian lenders. Others say he spent so much that he ran out of gold.

Lucy Duran of the School of African and Oriental Studies in London notes that Malian griots, who are singing historian storytellers, in particular, were upset with him.

“He gave out so much Malian gold along the way that jelis [griots] don’t like to praise him in their songs because they think he wasted local resources outside the empire,” she said.

Education at heart

There is no doubt that Mansa Musa spent, or wasted, a lot of gold during his pilgrimage. But it was this excessive generosity that also caught the eyes of the world.

Mansa Musa had put Mali and himself on the map, quite literally. In a Catalan Atlas map from 1375, a drawing of an African king sits on a golden throne atop Timbuktu, holding a piece of gold in his hand.

Timbuktu became an African El Dorado and people came from near and far to have a glimpse.

In the 19th Century, it still had a mythical status as a lost city of gold at the edge of the world, a beacon for both European fortune hunters and explorers, and this was largely down to the exploits of Mansa Musa 500 years earlier.

Mansa Musa returned from Mecca with several Islamic scholars, including direct descendants of the prophet Muhammad and an Andalusian poet and architect by the name of Abu Es Haq es Saheli, who is widely credited with designing the famous Djinguereber mosque.

The king reportedly paid the poet 200 kg (440lb) in gold, which in today’s money would be $8.2m (£6.3m).

In addition to encouraging the arts and architecture, he also funded literature and built schools, libraries and mosques. Timbuktu soon became a centre of education and people travelled from around the world to study at what would become the Sankore University.

The rich king is often credited with starting the tradition of education in West Africa, although the story of his empire largely remains little known outside West Africa.

“History is written by victors,” according to Britain’s World War II Prime Minister Winston Churchill.

After Mansa Musa died in 1337, aged 57, the empire was inherited by his sons who could not hold the empire together. The smaller states broke off and the empire crumbled.

The later arrival of Europeans in the region was the final nail in the empire’s coffin.

“The history of the medieval period is still largely seen only as a Western history,” says Lisa Corrin Graziose, director of the Block Museum of Art, explaining why the story of Mansa Musa is not widely known.

“Had Europeans arrived in significant numbers in Musa’s time, with Mali at the height of its military and economic power instead of a couple hundred years later, things almost certainly would have been different,” says Mr Ware.

Businessman recounts how Rawlings demolished his multimillion-dollar hotel in Accra

Ghanaian businessman Alhaji Yusif Ibrahim has recounted how former president Jerry John Rawlings demolished his multimillion-dollar hotel in the late 1990s.

In his autobiography, he narrated how his plush hotel was demolished in 1999 under Rawlings administration.

The said hotel was at the Airport Residential Area, near the Kotoka International Airport in Accra.

The 4-star hotel had 65 rooms, conference-hosting facilities, a Chinese restaurant and a cocktail bar.

It also had a swimming pool, tennis court and 16 catering apartments, in what he said, cost a total of $5 million to build.

But Rawlings, who was president at the time, reportedly directed armed officers to besiege the place and take the hotel down after having suspicions about the ownership of the hotel.

Speaking on Good Evening Ghana, Alhaji Yusif Ibrahim opened up on what led to the said demolition.

According to him, Rawlings took the decision because he thought Sam Jonah, who he had fallen out with, was a co-owner of the hote

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