H.E JOHN MAHAMA’S SOUND ECONOMIC POLICIES PAYING OFF – MOODY’S & HERITAGE FOUNDATION REPORTS
President John Mahama was head of Ghana’s Economic Management Team under the late Professor Mills administration where inflation was stabilized to single digit for almost 3 years and by 2011, In an economic research by the Economy Watch led by Juan Abdel Nasser, Ghana was ranked the fastest economic growing country in the world.
Moody’s Credit rating for Ghana rating has moved Ghana from B negative to B3 stable.
A good credit rating means that a country is creditworthy – able to pay back its facilities in a timely fashion and having used the facilities for the purpose they were intended.
Heritage foundation in their Economic Freedom Index ratings, rated Ghana FIRST among their index in West Africa and 5th in Africa ahead of the other economic giants like Nigeria, South Africa, Kenya and Egypt.
Ghana was rated 72nd ahead of countries like France, Italy, Russia, China etc. in the world, with growth in indicators like Property Rights – 50%, Freedom from Corruption shot up to 48.0%, Government spending shot up to 77.6%, Fiscal Freedom shot up to 84.9%, Trade Freedom shot up to 65%, maintained 60% for Financial Freedom etc.
These good economic ratings come on the back of the hard work and remodeling of Ghana’s economic focus under the able leadership of His Excellency John Dramani Mahama.
More International institutions have also given a positive nod when it comes to Ghana’s economy.
The World Bank ‘Africa Pulse Report’, published April 2016, has forecasted positive economic growth for Ghana, driven by improving investor sentiment, Launching of New Oil fields and overcoming the electricity crisis.
The Africa Development Bank Group, says Ghana’s Economic growth is expected to reach 8.7% in 2017 following consolidation of macroeconomic stability and implementation of measures to resolve the power crisis.
A report published by CNN also confirmed Accra as having the fastest rising number of millionaires in Africa (AfrAsia Bank and New World Wealth)
The gains made to achieve these positive ratings, are a clear example of the how government has resolved to find progressive lasting solutions and measures, to mitigate the economic ripples the country suffered, when the dollar was on a fast spin amidst power challenges.
One of the most commendable steps that the leadership took, upon going to IMF was to remodel the conditions into “Home Grown” ones as compared to what has been strict jacket implementation of such monetary institution polices.
Indeed, the IMF on its recently concluded third review, confirmed that Ghana has met three out of four fiscal quantitative performance criteria.
Some of the audacious moves that led to these high ratings among many others are as follows;
Curtailing wastage in Foreign Exchange on importation of goods and services which could be produced in Ghana under the home grown policies – HGP by providing Credit to poultry farmers reflecting in the reduction in poultry importation by 40%. Strategic support for local rice farmers which saved the nation $300 million last year.
Provision of credit to some pharmaceutical companies for expansion inuring to the benefit of Danadams pharmaceuticals to manufacture Anti-Retroviral drugs in Ghana.
Investment in Atuabo Gas has also saved the nation $500 million of liquefied petroleum gas importation.
The capital injection to revive Komenda Sugar factor, Kumasi Shoe factor, Ayensu Starch factory, Savannah cement factory, Shear nut factory and others, means that local production will increase ensuring that the country’s currency is spent within its borders.
The Cocoa sector saw some improvement such as the increment in producer price of cocoa, free fertilizer policy, investment in construction of cocoa roads, setting up of farmer’s service centers and free distribution of cocoa seedlings are expected to even push our agricultural output and increasing revenue.
Infrastructural development like roads, railways, airport constructions means businesses can thrive on a national scale with ease of movement. This will translate into more economic output for Ghana.
Increased healthcare facilities will mean a healthy workforce that can produce more and therefore offer more returns for their remuneration.
Increased access to educational institutions at all levels, as well the quality of education being offered means a better skilled workforce. This reduces cost of hiring expatriates by having home-grown experts. Undoubtedly saving in costs for imported labor.
Water provision has increased from 58% in 2008 to 76% in 2015 and this means a better standard of living. An employee that has the stress of thinking whether his water gallons are full, will be less productive than an employee that is assured of his water flowing from the tap.
The amount of businesses registered has gone up, mixed in are Ghanaian businesses as well as businesses stemming from Foreign Direct Investments. The result of which is more revenue for the government.
Just like in a business scenario, a lender will only loan money to a viable business that is bound to generate high returns such as to keep running and service its debts.
The ratings by Moody’s and Heritage Foundation, can be translated simply to say;
Ghana is now a viable economic entity. It can generate revenues as well as keep servicing its development debts.
Its no wonder Ghana’s latest Eurobond was oversubscribed by over 400 percent.
Greenbook Ghana Initiative