At its mid-year review, the Bank of Ghana repeated its perioidic survey findings that both business and consumer confidence in the Ghanaian economy was low. In fact, the indicators show that it is the lowest since 2000.
This can be seen in the slump in merchandise imports, down by 22% on last year. The worst hit is capital goods, down by 12%. With production and consumption both low, and government focusing on fiscal tightness rather than production spending, economic growth, according to Danquah Institute is not likely to hit 4.5% this year, well below government's own forecast of 5.3%.
The country came down from 87 to 97 at the global level but placed third in Africa, after Rwanda, Tunisia and Zambia. War-torn Rwanda made the biggest mark in this year’s rankings and have been recognised as the first African country to head the list of top ten reformers in the world since the rankings six years ago.
More worrying is probably the fact that Ghana went down in the area of protection of investors. Suggestions are that, moves by the Mills government to prejudge every business transaction done by its predecessor as probably fraudulent have hit the confidence of investors. Vodafone deal needed a whole commission of enquiry to look into. Their report is ready and The Statesman has picked up information that the report "is as good as needn't have been commissioned."
The report seeks to make some issue of supporting assets owned by Ghana Telecom, such as lands, which they say were undervalued in the transaction but without suggesting what the 'right' value ought to have been.
70 percent of GT was sold to Vodafone with Ghana government still holding 30% of the new company and therefore 30% of those assets in question.
The report also questions the absence of strong protection for GT workers; something no sensible transaction could have guaranteed.
Also, the report questions the decision to add the Telecom University to the deal. But, this point seems mute, since Vodafone agreed with government to find a common way forward to secure the university's prospect.
The NDC government's problems with Sahara Oil, which it refused to allow to continue lifting crude oil for Ghana during a tender lacunae, has contributed the current crude oil shortage crisis that the country has faced since January, with the Tema Oil Refinery not refining any crude this year.
Several contractors have not been paid for work done, totaling more than $1 billion. The Doing Business Report therefore finds investor confidence in Ghana today to be very low. The report measures the ease in doing business in 183 countries on ten indicators. Ghana dropped from 87 to 97.
However the country went down heavily in the areas of tax payment, dealing with construction permits and the protection of investors.
Ghana’s slip in the rankings might not be different from the latest World Economic Forum rankings.
The forum’s latest rankings on Global Competitiveness Index have also revealed that Ghana has dropped by 12 places to 114 out of 133 countries.
Source: Statesman
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