GRi Business Economics & Finance 22 - 05 - 2002
Ghana's inflation rate now 14.9 per cent
O'Neill urges African governments to invest in people
Ghana asked to seek rating for national debt
US says prepared to work with trustworthy
business partners
Ghana's inflation rate now 14.9 per cent
Accra (Greater Accra) 22 May 2002- Mr Yaw Osafo-Maafo, Minister of Finance on Tuesday said Ghana's inflation rate by the end of April was 14.9 per cent, dropping from about 42 per cent when the government assumed power in January last year.
He said the depreciation of the currency had also dropped from 52 per cent to about 25 per cent. Mr Osafo-Maafo said this in a presentation on " Ghana-Beacon of Hope in Africa", a documentation prepared by the Economic Management Team when Mr Paul
O'Neill, United States Treasury Secretary, led a 16-member delegation to call on President John Agyekum Kufuor at the Castle, Osu. Mr O'Neill is in Ghana on a three-day official visit to begin a two-week African tour that would also take him to South Africa, Uganda and Ethiopia where he would meet key business, trade and government leaders.
His wife Nancy and daughter as well as Paul "Bono" Hewson, a renowned musician, accompanied Mr O'Neill. The tour will give Mr O'Neill the opportunity to highlight efforts to enhance the effectiveness of development assistance, the importance of increasing productivity through investment in human capital and the role of the private sector as an engine of growth in Africa.
It will also highlight and enhance the effectiveness of US department's policies. Mr Osafo-Maafo said the micro-economic framework being pursued by the government required budgetary support rather than support for specific projects. He said the government was now keen on public financing management to improve revenue collection from the Internal Revenue Service (IRS), Value Added Tax (VAT) and the Customs, Excise and Preventive Services (CEPS) and these were the areas government required assistance from the donor communities.
The Finance Minister said fluctuations in the crude oil prices and delays in the inflow of funds from donor agencies were the problems facing the implementation of government policies and programmes and appealed to the US for support and technical assistance for public financing to be transparent, reliable, on time and accurate.
Mr Osafo-Maafo said forensic audit conducted by the government into some state enterprises that were divested were found to be fraudulent and not transparent which had to be reviewed and this had delayed the divestiture programme because of government's determination to ensure transparency. "We are making a lot of sacrifices and we need your support to become the role model of Africa, " he added.
Mr Joseph Henry Mensah, Senior Minister said efforts would be made to put agriculture on priority with regard to Ghana-US relationship to enable Ghanaian farmers create much wealth to improve their living standards. Mr O'Neill said he was impressed by the presentation and gave the assurance that the US would provide the needed technical assistance to Ghana, adding," we need to support your efforts".
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O'Neill urges African governments to invest
in people
Accra (Greater Accra) 22 May 2002- The United States Treasury Secretary, Mr Paul O'Neill on Tuesday asked African governments to promote just rule, encourage economic freedom and invest in people to be able to attract critically needed investment for development.
Presenting what has been described as a major policy speech in Accra on the first leg of his four-nation African tour, Mr O'Neill said African governments needed to fairly enforce human rights laws, fight corruption, remove trade barriers and allow fair competition as well as encourage education and health care to unleash the potential of the private sector and increase productivity.
The Treasury Secretary and the Irish Rock Star Paul Bono Hewson are on a fact-finding mission aimed at reducing debt and improving health and living conditions in some of the poorest countries in Sub-Saharan Africa. They would meet with government and business leaders in Ghana, Uganda, South Africa and Ethiopia as well as visit to schools, AIDS clinics and World Bank development projects.
Mr O'Neill said official development assistance through muti-lateral and bilateral agencies would best be utilised to serve the need of the people when local leaders were already improving the economic framework of their nations. "That is the premise of the President Bush's 'Millennium Challenge Accounts and the New Compact for Development'", he said.
President Bush has proposed an annual bilateral aid of five billion dollars to countries that could use the money effectively. Mr O'Neill said to be able to access the Millennium Challenge Account; countries must demonstrate a strong commitment to ruling justly, encouraging economic freedom and investing in people.
"We are in the process of developing the criteria for measuring countries' policies in this area, so we can begin to disburse funds." Mr O'Neill said it was important for the United States to be hard-headed and to demand results that the aid was efficiently utilised, adding that it was their responsibility to the impoverished people of Africa.
"If we don't insist on results for the dollars provided by compassionate people all over the developed world, then we are not meeting our responsibility as world leaders to improve the lives of people everywhere," he said. Mr O'Neill said despite the enormous potential for high returns on investment on the continent, many investors continued to shy away for fear of losing their businesses and capital through corruption and violent change of power.
"They fear their contracts will not be respected," he said, adding that the problem did not pertain to only foreign but also to African investors willing to invest on the continent. "When savings and investments are not perceived as safe, people hide their cash where it cannot work for the economy, or they send it to countries where they know it will be safe."
The Treasury Secretary said while foreign direct investment was important to enhance employment opportunities, creating a self-sustaining economic growth, however, laid in the hands of the local entrepreneurs, who were willing to take risks to improve the lives of their families and communities and to pass on their skills to future entrepreneurs.
Mr O'Neill also touched on the cycle of debt that had plagued many African countries, saying that while forgiving debt, steps must be taken to avoid recreating the debt burdens that stifled so many nations. He said it was in this connection that President Bush had proposed a shift from loans to grants, emphasising that up to 50 per cent of World Bank and other development bank funds to poorest countries should be in the form of grants.
He said the proposal made much sense because it took into account the long-term development challenges of these countries, acknowledging that while investment in social sectors and in people were critical they might not generate the revenue needed to service the debt.
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Ghana asked to seek rating for national
debt
Accra (Greater Accra) 22 May 2002- The U.S. Treasury Secretary, Mr Paul O'Neill on Tuesday urged the Ghanaian government to pursue investment grade rating for its national debt, saying the transparency that go with the rating were enough to ensure government discipline. He said achieving investment grade for sovereign debt would allow Ghana to grow on its many merits as investors could more easily differentiate its risks from those of less progressive nations.
Mr O'Neill was delivering a major policy speech in Accra on the first leg of his four-nation fact-finding African tour with the Irish rock star Paul Bono Hewson aimed at reducing debt and improving health and living conditions in some of the poorest countries in Sub-Saharan Africa.
They would meet with government and business leaders in Ghana, Uganda, South Africa and Ethiopia as well as make visits to schools, AIDS clinics and World Bank development projects. Mr O'Neill said last year's peaceful transfer of power was both political and economic achievement for the country, adding that investors and entrepreneurs were already responding to Ghana's improved stability and economic reforms.
"With its growing history of democracy and stability, Ghana is showing that it can offer continuous rule of law, even with a change in power. At the same time, Ghana has been opening its economy to international trade and investment," he said. "When the sovereign leader is working to improve conditions for investment and entrepreneurship, outside assistance can speed progress."
He expressed the hope that as Ghana's debt burden was reduced as a result of relief from creditors, it would have greater resources to invest in health, education and fiscal stability. Mr O'Neill said while debt was being forgiven, steps must equally be taken to avoid recreating the debt burdens that stifled so many nations.
He said it was in this connection that President George Bush had proposed that up to 50 per cent of World Bank and other development bank assistance to poorest countries should be in the form of grants.
He said the proposal was good because it took into account the long-term development challenges of poor countries and also acknowledged that while investment in social sectors and in people were critical they might not necessarily generate the revenue needed to service the debt. Mr O'Neill pledged the US technical assistance to support Ghana's efforts to improve internal budgeting and the financial systems.
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US says prepared to work with trustworthy
business partners
Accra (Greater Accra) 22 May 2002-Mr Paul O'Neill, the United States (US) Treasury Secretary, currently on a three-day official visit to Ghana on Tuesday said the US was prepared to work with trustworthy people with bright business ideas to be translated into business opportunities.
He said the US was not mainly interested in the ability of business enterprises to provide collateral security like gold for financial support to business enterprises but rather the preparedness to do genuine business with its assistance, and was therefore prepared to support small and medium-scale business enterprises that show initiative and willing to take advantage of her assistance.
Mr O'Neill gave the assurance in Accra after observing a number of items displayed at an exhibition in Accra to demonstrate products of specific development projects being carried by the United States Agency for International Development (USAID) and the Peace Corps with small and medium enterprises in Ghana.
The exhibition was part activities scheduled for Mr. O'Neill's three-day visit to Ghana. Some of the items showcased were textile materials, pottery, jewellery, garments, shea-butter cream, dry cashew nuts, horticultural products and beads.
Mr O'Neill commended the exhibitors, saying the designs and colours of the fabrics were attractive and could sell anywhere in the world and added that their products show that they have very good ideas. He however, described the method of using the hand to beat the shea-butter stock as physically demanding, and said what was now required was to provide machines and other technology of processing shea-butter.
Mr O'Neill stressed the need for the exhibitors and producers in the small and medium-scale sector to sharpen their marketing and distribution skills for their products to break new marketing grounds, and gave the assurance that the US was committed to building a strong economy in Ghana.
Mr Edwin Ofoli Ahinakwa, Director of Kottage Originals, an exotic furniture designing and export firm, in a chat with the GNA applauded the visit of the Treasury Secretary and said by his visit, Mr O'Neill would learn at first hand, the problems of the actors in the small and medium-scale industries and was hopeful that he would use his position to lobby for more assistance and push for better prices of Ghanaian products on the American market.
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Accra (Greater Accra)
Currency Buying Selling
US Dollar 7,711.36 7,881.45
Pound Sterling 11,250.10 11,502.19
Swiss Franc 4,888.37 4,993.14
Canadian Dollar 4,997.38 5,104.14
Japanese Yen 61.40 62.73
S/African Rand 767.86 782.47
Euro 7,104.58 7,259.19
CFA Franc 10.83 11.07
Naira 67.12 68.60
Ecowas/WAUA 9,885.29 --------
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