Inflation declines marginally in June

Inflation for the month of June has recorded another marginal decline. It stood at 8.5 percent down from the May figure of 8.9 percent.

It represents the inflationary trend from June last year to June this year.

The Statistical Service attributes the decline to a drop in the price levels of food stuffs.

Compared to last month however, general price levels went up marginally.

Government Statistician, Dr. Grace Bediako explains to Joy Business what is accounting for these changes.

“The month-on-month is really the mediate experience in price levels so it shows the inflation within a short period of time.

"And here a lot depends on the seasons-what is changing- because May has a different set of characteristics when it comes to food production, harvest and the like, than June. That is why we have different patterns in the month-to-month from the year-on-year.

"So it is a lot more complicated than just price levels increasing immediately and then we see a change,” she added.

The Greater Accra region still has the highest inflation at 12.4 percent whilst the Volta Region at 4.6 percent had the lowest.


Source: Joy Business/Myjoyonline.com/Ghana ownside risks connected with oil imports,” he said.

Bank of Ghana’s composite index of economic activity showed a year-and-year growth of 26.5 per cent and 19.4 per cent in April and May respectively compared to real growth of 23.7 per cent in the first quarter of 2011.

A survey of consumer and business sentiments conducted in June this year, showed softening sentiments on growth.

The overall business confidence index fell to 104.1 in June from 106.6 in April, with firms less optimistic about the level and intensity of their capital expenditures and expectations of lower sales, profits and employment opportunities.

On the other hand, the consumer confidence index declined from 100.7 in April to 99.5 in June, driven by weaker welfare expectations.

Ghana, which joined the ranks of oil exporting nations in December, last year, remained exposed to the world price of oil for its own energy imports. However, Amissah-Arthur said he expected future market price moves to be “within tolerable limits.”

The US$46-billion-a-year Ghanaian economy is set to see one of the world’s fastest growth rates this year, partly fuelled by oil. Growth in the first quarter leaped to an annual rate of 23 per cent.

However, Amissah-Arthur noted that official surveys on both business and consumer confidence eased in June and added that despite a pick-up in private sector credit, the Bank was still concerned at what he called the “sluggish” response of commercial banks in cutting lending rates.



Source: Daily Graphic/Ghana

BoG confident of stable inflation

The Monetary Policy Committee (MPC) of the Bank of Ghana is confident that the country will achieve an annual inflation rate of nine per cent.

Central Bank Governor and Chairman of the Monetary Policy Committee, Mr Kwesi Amissah-Arthur, announced this at a news conference in Accra on July 6, 2011, adding that inflation was under control despite economic growth which is currently running at over 20 per cent per year.

“Inflation has continued to drop and is currently at 8.9 per cent. Based on internal projections, the Bank is confident that the annual inflation rate of nine percent is achievable.”

The bank has consequently lowered its policy rate by 50 basis points from 13 per cent to 12.50 per cent, citing a stable inflation and other macroeconomic indicators.

The drop in the policy rate is expected to prompt the commercial banks to reduce their base rates that will subsequently culminate into a reduction in the interest rates of commercial banks.

“The sources of uncertainty that existed at the last MPC meeting have substantially abated. From the analysis and the data presented, inflation expectations of businesses and the financial sector are well anchored,” he said.

“The current state of the economy and the assumptions on both the domestic and external outlook as well as the inflation forecast suggest that in the near term, stable and favourable economic conditions will hold,” he added.

He said his committee was committed to price stability to provide supportive environment for growth, adding that the Bank was confident that the annual inflation target of nine per cent was achievable.

Inflation as at the end of May stood at 8.9 per cent. Mr Amissah Arthur said the external outlook remained favourable as gold and cocoa prices continue to hold firm.

“On the other hand, crude oil range of price adjustment are uncertain, but forecast to be within tolerable limits, thus reducing the downside risks connected with oil imports,” he said.

Bank of Ghana’s composite index of economic activity showed a year-and-year growth of 26.5 per cent and 19.4 per cent in April and May respectively compared to real growth of 23.7 per cent in the first quarter of 2011.

A survey of consumer and business sentiments conducted in June this year, showed softening sentiments on growth.

The overall business confidence index fell to 104.1 in June from 106.6 in April, with firms less optimistic about the level and intensity of their capital expenditures and expectations of lower sales, profits and employment opportunities.

On the other hand, the consumer confidence index declined from 100.7 in April to 99.5 in June, driven by weaker welfare expectations.

Ghana, which joined the ranks of oil exporting nations in December, last year, remained exposed to the world price of oil for its own energy imports. However, Amissah-Arthur said he expected future market price moves to be “within tolerable limits.”

The US$46-billion-a-year Ghanaian economy is set to see one of the world’s fastest growth rates this year, partly fuelled by oil. Growth in the first quarter leaped to an annual rate of 23 per cent.

However, Amissah-Arthur noted that official surveys on both business and consumer confidence eased in June and added that despite a pick-up in private sector credit, the Bank was still concerned at what he called the “sluggish” response of commercial banks in cutting lending rates.



Source: Daily Graphic/Ghana

Kumasi embraces FCP Speed Banking service

First Capital Plus (FCP) Savings and Loans Company has described as ‘phenomenal’ the reception of its ‘Speed Banking’ product by customers and other potential clients in Kumasi.

Company officials say the service should impact positively on total deposit mobilization as customers increasingly sign onto the platform and continue to deposit money via their mobile phones.

The Speed Banking service is a unique solution that allows customers of FCP to deposit money into their accounts using a scratch card and a mobile phone. Customers need to purchase vouchers worth ¢2 and ¢5 and text to a short-code for the amount to reflect in their account.

The account holder has the power to control deposits, irrespective of location or time of day.

FCP has been on a road show and market campaign in Kumasi to introduce the service to customers.

The product innovation, according to Stephan Antoh, Head of Legal and Corporate Affairs, is to rope in majority of the unbanked population into the practice of savings as well as complement the institution’s mobile banking service.

“Most people don’t want to come to the banking halls, join queues, fill forms just to deposit money… now we’re cutting out the human face and we’re allowing people to deposit money by using their mobile phones”, he told Luv Biz Report.

Mr. Antoh is confident the Speed Banking solution would help the drive to migrate a lot more informal businesses into the formal sector.

First Capital Plus opened its main Kumasi branch eight months ago, in line with the company’s vision to become a leading provider of banking solutions in Africa within the next decade.

Mr. Antoh is excited the company’s client base has increased over the period.




Story by Kofi Adu Domfeh/Luv Fm/Ghana

Bank of Ghana cuts its policy rate to 12.5 percent

The Bank of Ghana has cut its key benchmark lending rate to 12.5 percent from 13 percent.

The decision to cut its policy rate was announced at the end of a two-day meeting by the Monetary Policy Committee to review the health of the economy.

The policy rate is usually an indication of the rate commercial banks can borrow from the Central Bank.

Announcing the rate at a news conference on Wednesday, the Governor of the Bank of Ghana, Kwesi Amissah Arthur, explained that its decision to cut the rate by 50 basis points was influenced by a favorable fiscal and inflation outlook.

The MPC noted that though government appears to be making some gains on how it will manage its revenue and expenditure, it however recovered a narrow budget deficit for the first half of the year.

Total exports of goods for the first five months of the year went up by 32 percent, boosted by exports of crude oil from the jubilee field.

Interactions with consumers and businesses in the bank's regular survey for June showed less optimism by business and consumers in the economy.

Overall, business confidence also declined marginally, driven by weaker welfare expectations.

On the banking front, there was some good news as the sector appears to be increasing credit to small businesses and reducing the loans that have gone bad.

The banks’ ability to withstand losses however declined marginally.

Meanwhile some economists believe the Central Bank’s decision to cut the rate is a prudent one.

Manufacturing firms also believe though the cut is welcome, the Central Bank must ensure that the commercial banks respond accordingly.



Source: Joy News

New SEC boss to focus on developing the capital market

The new Director-General of the Securities and Exchange Commission says his prime focus is to develop and grow the capital market.

Adu Anane-Antwi said this will be done through programmes and policies that will stimulate market growth comparable to developed economics.

The lawyer and Chartered Accountant by profession took over as new Director-General of the commission last Monday.

Mr. Anane-Antwi told Joy Business he will strive to ensure that investors’ funds are protected.

That, he said will be done by ensuring transparency because “most people when they are investing tend to be apprehensive.”

Mr. Anane-Antwi is seen by many as a reformist especially because he took a break from the commission to do some private business. He said he intends to contribute more of those ideals.


Source: Joy Business

MASLOC to become independent of government

The Microfinance and Small Loans Company, MASLOC says it remains determined to wean itself off government support in the near future.

Government at the moment remains the sole-financier, but it says increasing demand from the public requires that it increases its loan purse.

Officials say plans to recapitalize and gain autonomy are currently before cabinet for approval.

Public Relations Officer, Mustapha Abubakar says one of the options is to source funds from the international market.

He said it is particularly important for MASLOC to try and stand on its own because the default rate of its beneficiaries was high because people tended to think that the money is government money.

Mustapha Abubaker said MASLOC is also working on extending loan facilities to public sector workers.



Source: Joy Business/Ghana