GRi Business News 07-04-99

Financial sector looks promising - BOG Official

Reforms will survive governments-World Bank

Ghana Association of Bankers announces Exchange Rates

Accra (Greater Accra) 7 April  

Developments in the country=92s financial sector during the first two months of 1999 appear promising. Inflation fell from 15.7 per cent in December 1998 to 15 per cent at the end of February while growth in money supply declined from 17.6 per cent in December 1998 to 17.2 per cent by February 1999, the first time in eight years.

Dr Henry A. K Wampah, Head of Research Department of Bank of Ghana, said this at the opening of a three-day seminar on financial and economic reporting in Accra Tuesday. Dr Wampah said the country's monetary reserves recorded 4.5 per cent fall during the period and attributed it to a tight monetary policy adopted by the central bank.

The BOG achieved most of its financial targets for 1998, he stated, adding: "1998 turned out to be one of the best years since the launch of the Economic Recovery Programme (ERP) in 1983."

The Net Financial Asset (NFA) of BOG grew by 100 million dollars as against the target of 60 million dollars, money reserves increased by 16.8 per cent in 1998, compared with 33 per cent in 1997, and the cedi depreciated by four per cent in 1998 as against almost 23 per cent in 1997.

He said 1999 looks promising and targets are attainable expressing the hope that inflation would continue to fall and the exchange rate would be stable. Dr Wampah said new instruments like standing orders and strengthening of liquidity forecasting would be introduced.

A new BOG draft bill to strengthen the independence and supervisory authority of BOG is being considered by government.

Dr J.K. Richardson, Chairman of the Board of Directors of Merchant Bank, said journalists have an important role to play in the development of the country. They should therefore avoid speculative reporting on financial issues since it has the tendency of creating panic that can affect the interest of the state. Dr Richardson called on the financial services sector to provide the necessary fuel needed for the growth of the private sector.

Dr Chris Nartey, Managing Director, Merchant Bank Ghana Ltd, said the bank spent 100 million cedis on health, education and other sectors in 1998 as their social responsibility and pledged to do more.

The seminar is being organised by the Institute of Financial and Economic Journalists (IFEJ) and sponsored by Merchant Bank, Ghana Limited. It is being attended by 25 journalists from state and private media organisations throughout the country.

Accra (Greater Accra) 7 April 

The World Bank is optimistic that no democratic change in government will jeopardise the public sector reforms agenda being pursued by the government.

Dr. Guenter Heidenhof, a senior management specialist of the Bank, told reporters, Tuesday that the present state of the public service would not be able to serve any government well, because it does not encourage public saving and efficiency. The bank has already pledged about 100 million cedis to fund the eleven year programme which has been woven into Vision 2020, the nation's medium term development strategy.

Dr Heidenhof said the bank agreed to fund the project because of the government's commitment and willpower amply demonstrated in the setting up of structures like the National Institutional Renewal Programme, to see to the implementation of the agenda. "After failing with the Economic Renewal and Structural Adjustment Programmes, the sceptics nearly had their day, but it took a well structured home-growth plan and a serious government to win us back". He said the agenda is a "Ghanaian solution to a Ghanaian problem which promises to be sustainable".

Dr Heidenhof however said results gathered from the first three years of the project will determine the continuity or otherwise of the reforms. "I must say here again that we are impressed by Ghana government's commitment to this whole thing, but if the first three years do not yield good results, we will back off". Athough expectations are not so high, all players need to redouble their efforts to make the reforms a success, he said.

The World Bank expert said unlike the ERP and SAP where the bank was more concerned about reducing numbers to achieve results, the reform will look at the totality of the sector.

"Every step of the programme will be watched and above all, we shall be going to the ordinary Ghanaian, time after time to find out what his/her perceptions are".

More than 60 delegates from the executive wing of government, Legislature, Judiciary, Trade Union Congress and the Civil Society last month reviewed the agenda which is currently awaiting cabinet's nod before receiving Parliamentary scrutiny.

Accra (Greater Accra) 7 April

The following are the average inter-bank exchange rates of the cedi to the dollar and other derived rates for other currencies as against the major foreign currencies for today, Wednesday, April seven, as announced by the Ghana Association of Bankers (GAB):

Currency Buying Selling

US Dollar 2,405.00 2,434.36

Pound Sterling ,822.99 3,872.09

French Franc 395.96 400.66

Swiss Franc 1,627.84 1,647.70

Deutsche Mark 1,327.33 1,343.92

Canadian Dollar 1,600.25 1,619.78

Japanese Yen 19.91 20.15

Dutch Guilder 1,178.59 1,192.59

S/African Rand 389.45 393.05

Euro 2,597.84 2,627.82

CFA Franc 3.96 4.01

Naira 28.13 28.47