Ghana still has a weak economy
Rural Apex Bank launches domestic transfer
product
Ekumfi pineapple
growers to establish company
They argued that it was necessary to track expenditure from funds disbursed from the treasury for the implementation of key projects to remove the suspicion of development partners that their monies were being diverted for other purposes.
The
The MDBS is a framework the Government signed with nine
Development Partners (the African Development Bank,
Money provided under the MDBS provides the government the flexibility and the responsibility to allocate funding for its own priorities.
Paul Walters, an Economist with DFID said by international standards, public financial management was on the low side in the country, thereby increasing the fiduciary risks borne by development partners contributing to the MDBS.
"It is important to note that the fiduciary risk does not just depend on the good intentions of the government, but also on the ability to provide a reliable account of expenditure and the outcomes arising from it," he said.
He, however, welcomed the on going reform of public finance and the clear strategy government was adopting to enhance use of resources and provision of services.
Walters said the country would benefit from a reduction in transaction costs associated with Official Development Assistance, particularly those transactions costs that arise from meeting conditional ties attached to the flow of funds.
There is also the advantage of increased predictability of ODA flows, allowing for long-term planning as well as increased democratic accountability of the government to its electorate.
Dr Robert Osei, Fellow of IEA, said the main objective of the MDBS was to increase the effectiveness of aid through a simplification in disbursement procedure, reduce matching funds and the uncertainty with regard to the amount to be given and the period of disbursement.
Dr Sulley Gariba
of the
Dr Joe Amoako Tuffuor of the Ministry of Finance said through the MDBS, development partners would deliver aid tied to the Ghana Poverty Reduction Strategy. He said an uncoordinated aid environment was harmful to the economy, adding that, the MDBS would increase the predictability of the flow of aid.
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Prof Ernest Aryeetey, Executive
Director of the
He was presenting the 2002 State of the Ghanaian Economy
Report in
"Inflation and interest rates, the balance of payments and international reserves were among the macroeconomic indicators that improved." He said the 4.5 per cent growth rate of gross domestic product was good when compared with those of several other African countries and only a little lower than the 4.7 per cent average since 1984 describing the current stability as "significant."
The Report published annually since 1991, contains detailed information on performance in major sectors of the Ghanaian economy and explains why there has been progress, setbacks or stagnation.
Prof Aryeetey said the report looking at the medium term states that in view of the structural and institutional bottlenecks, economic actors must collaborate to "promote the establishment of institutions, including effective private markets that would bring transaction costs to a more manageable level and help to put the economy on a dynamic growth path."
He said despite higher than intended government spending, the overall fiscal deficit of 5.3 per cent of GDP was lower than the 6.9 per cent target and much lower than the 7.2 per cent recorded in 2001 because rising expenditure was matched by rising revenue.
He noted that inflation at the end of 2002 was 15.2 per cent instead of the target of 13 per cent. "The primary balance at year-end stood at 2.1 per cent of GDP compared to the 3.1 per cent target with foreign aid inflows falling far short of expectation, as well as divestiture receipts."
He said actual growth rates for reserve money and broad money of between 42.6 per cent and 50.0 per cent, far exceeded original targets of between 18.7 per cent and 25 per cent.
Statutory payments, he said, fell short of budgetary targets by 3.17 per cent as a result of the government's inability to transfer resources to statutory funds, adding that at the end of 2002, arrears to the District Assemblies' Common Fund (DACF) were 29.82 per cent of its budgetary allocation, GETFund 50 per cent of its budgetary allocation, Road Fund of 32.15 per cent and Social Security, 13.84 per cent.
While merchandise imports were down 8.9 per cent, merchandise exports were up to 10.5 per cent last year, saying minerals, cocoa and timber remained the dominant exports - despite the continued spate of smuggling of cocoa.
He said cocoa purchases were down 12 per cent, after a two per cent fall in 2002 and despite a two-stage boost of nearly 94 per cent in producer price, the play between the world price and the exchange rate left the domestic producer price at 49.4 per cent of the world price at the end of 2002, partly explaining the continued smuggling to neighbouring countries.
Industry grew up by 4.7 per cent much better than the 2.9
per cent in 2001, but still far too low for an "engine of growth." Dr
Baffuor Osei, a Senior Lecturer of the Economics
Department at the
"Government should cut taxes, as is done in developed countries, in order to increase growth." He said it was important for government borrowing to be limited by law and the Central Bank made to play its real role in monetary policy.
Dr Samuel Ashong, Minister of State at the Ministry of Finance and Economic Planning, said since statistics was a major component of managing the economy, the Ghana Statistical Service would soon be equipped to collect correct data and conduct accurate research, "for all bodies, be it private or public".
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He said bigger companies should be in the forefront of driving the country's industrialization process forward by ensuring that their activities conform to laid down procedures.
Ashitey stated this when he paid a familiarisation tour of the Accra Brewery Limited (ABL). He said bigger companies in the country should sub-contract some of their operations to small and medium ones, which have the capacity to perform such tasks, rather than bringing foreign companies whose services were quite expensive.
He said the PSIs were primarily targeted at the foreign export market so as to diversify the country's export products in order to bring in the needed revenue for development.
"If we want to get to the middle income country status by 2010 then it is imperative for us to industrialise," he said. Gavin Brown, Managing Director of ABL, said the brewery industry in the country had become very competitive because most of the players were now multinationals. He said that for the industry to grow well, the government must ensure a level playing field for all stakeholders to benefit fully.
He also noted that ABL currently used 30 per cent of locally produced maize as a substitute for imported malt in its production. Brown appealed to the government to provide financial packages to the brewery companies in the country since the cost of borrowing from the banks were very high.
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Rural Apex Bank launches domestic transfer
product
The product known as the "Apex Link" would enable customers and non-customers of the rural banks to transfer monies at moderate charges to other rural banks.
This would be in two different modes of a mail system, which takes more than a day, and the electronic system, which is instant. Finance Minister Yaw Osafo-Maafo, who launched the product, lauded the initiative and urged rural banks to improve their internal control mechanisms to ensure an effective and efficient delivery of the transferred funds.
This, he said, was because the success of any product depended largely on how the personnel entrusted with its delivery handled it. In a speech read for the Minister, he urged the staff of the Bank and the rural and community banks to handle their customers with extra care, promptness and all that went with good service delivery.
Osafo-Maafo said government on its
part was making every effort to develop the rural areas where about two-thirds
of the population lived. "It is our belief that the key to rural
development and poverty alleviation in
The strategy for promoting this feat, therefore, called for deepening outreach programmes and expanding services to rural clients by, among other things, promoting the formal and informal micro finance sector through increased network and capacity building.
It also called for the strengthening of the overall capacity of the rural banks for effective intermediation and the improvement of the policy and regulatory environment of the financial sector, Osafo-Maafo said.
Richard Mettle Addo, Head of Training, ARB Apex Bank, said the introduction of the product would enhance the movement of funds between any of the rural banks.
He said before the establishment of the Apex Bank, each rural bank stood alone as an individual entity and there was no way to transact business without some difficulty.
"Now all the rural banks are linked together so they can transact business from one end to the other." Addo said domestic money transfer was not new to the banking industry but for the rural banks, this was an opportunity for all the 457 banks doted in every point of the country to move funds without any problem.
He said for now, the Central Bank has permitted the ARB Apex Bank to establish an office at the Cedi House to serve as a central point of transfers for all the rural banks. The minimum charges are ¢10,000 and an additional charge for electronic transfers.
The highest charge on transfers is less than ¢100,000 for customers and about ¢150,000 for non-customers. Dr Sam Dufu, President of ARB Apex Bank, observed that since its inception in July last year, the Apex Bank had filled a yawning gap and had brought much contentment to the rural banks.
"Quite apart from bringing the rural banks on board the mainstream cheque clearing system, the supply of specie for the rural banks' operations is now being handled with a level of professionalism never enjoyed before."
Dr Dufu expressed the hope that the new product would open a new dimension in rural banks' operations to offer them the opportunity to diversify their sources of income.
He, however, called for the establishment of more rural banks in the three Northern Regions saying, "I will like to appeal to the Bank of Ghana to facilitate the establishment of more rural banks in those Regions by giving preferential attention to applications from the area".
E. K. Kwapong, Managing Director of the Apex Bank, said the successful integration of the rural banks into the national payment system through the clearing system had created a solid platform to add the building blocks such as the domestic funds transfer product.
He said benefits expected from the product included the effective networking of the rural banks, the removal of the current limitation where funds transfer business was limited to cities and urban areas and the minimization of incidents where traders lose money to highway robbers.
The launch of the product would also diversify and improve the income of the rural banks, increase the number of customers and improve the public image of rural banks.
Mrs Gladys Asmah, Minister of
Women and Children's Affairs, unveiled the product, which has the triangular
emblem of the ARB Apex Bank and a
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Ekumfi
pineapple growers to establish company
Ekumfi-Essuehyia (Central Region)
The farmers, numbering over 700, have formed a co-operative society for various pineapple producing communities and have agreed to contribute a minimum of ¢50,000 each to raise ¢1.5bn to supplement the government's efforts.
Nana Obrenu IV, Chairman of the Ekumfiman Rural Bank's Board of Directors and head of the proposed Ekumfi Pineapple Processing Company Planning Committee, said this at an emergency meeting of the committee at Ekumfi-Essuehuyia. Nana Obrenu told the growers that it would be better for them to take the initiative to establish their own company.
He said the time had come for farmers and other self-employed groups in the area to take advantage of the various President Special Initiatives (PSIs) to open up the area and attract more financial assistance from the government and donors.
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Pound
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