Ghana must maintain stability of cedi – Razia Khan

Razia Khan

Razia Khan

The government must sustain efforts being made to maintain the stability of the cedi in order to keep the country’s growing debt at sustainable levels, Razia Khan, Chief Economist for Africa, Standard Chartered Bank

She said since Ghana had taken a lot of dollar debts, the country’s debt would increase beyond sustainable thresholds if the value of the cedi drops.

Ghana’s debt as at the end of June stood at a provisional level of GH¢138.5 billion and comprises external debt stock of $17.1 billion and domestic portion of $14.6 billion.

Addressing the media on the global economic trends in Accra as part of her working visit to Ghana, she therefore, entreated the government to pursue growth strategies to promote broad-base growth and expand the economy.

She said though, the country recorded increased growth in the first quarter of this year, the growth was largely influenced by the oil and gas sectors, saying that the traditional sectors of the economy should be supported to grow.

The Chief Economist for Africa predicted a positive growth outlook for the country, indicating that the growth would be influenced by the oil and gas.

The country in the first quarter of the year recorded a Gross Domestic Product (GDP) growth of 6.6 per cent, which is against the 4.4 per cent recorded in the same period last year.

“Ghana stands out as a country with promising growth outlook in the Sub-Region and the oil and gas sector will play an important role in Ghana’s growth,” she said.

She said growth of the Ghanaian economy would fall from 6.3 in 2017 to 6.2 in 2018 and increased to 7.3 per cent in 2018.

Ms Khan lauded the government for the efforts being made in maintaining macroeconomic stability and entreated it to further pursue strategies to sustain the macroeconomic gains attained so far by the country.

Ghana as at the end of July this year recorded inflation as rate of 11.9 down from the 15. 4 per cent recorded in December, 2016 and the Monetary Policy Rate since the beginning of the year had been reduced by 450 basis points from 25.5 to 21 per cent.

She said efforts so far made to increase the GDP and ensure debt sustainability was commendable, but cautioned the government to tread cautiously in its bid to promote economic growth and ensure debt sustainability.

Ms Khan also commended the government for signing on to the Extended Credit Facility programme of the International Monetary Fund (IMF), saying it helped brewed investor confidence in the Ghanaian economy.

She urged government to continue its consolidation programme with or without IMF to address the imbalances of the macroeconomic fundamentals.

Touching on Africa’s growth, Ms Khan said the Region’s growth story was on course though growth had been disproportionate in the Region, adding that Africa’s growth had been drive by Sub-Saharan African countries.

On the global economy, Ms Razia said China’s growth was expected to pick and stressed that would have positive impact on the African economy.

“China in 2017 will see its year-on-year growth acceleration since the economic crunch in 2010,” Ms Khan said.

By Kingsley Asare

 

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