Business News of 2014-03-21

Gov’t may not meet micro economic targets - Economist

Mr Samuel Kofi Ampah, Head of Research of Gold Coast Fund Management, has said the government might not meet its micro economic indicators if challenges facing the fiscal policy were not adequately addressed.
He said the government was unlikely to meet its projection of inflation around the nine percent it projected for the year and that it needed to check its deficits situation including budgetary deficits and improving revenues at all levels.
Mr Kofi Ampah was speaking in an interview with Ghana News Agency (GNA) after a seminar organised by Gold Coast Fund Management on investment and fund management for its clientele and other financial companies in the Upper East Region.
He said most export commodity prices on the international market were falling and that the trend affected revenue, therefore there was the need for circumspection in the expenditure of the government as that did not commensurate the revenue pattern of the country.
Mr. Ampah said inflation as a micro economic indicator could not only be used as a variable in determining a robust economy even though Ghana was an inflation targeting economy.
According to him, the country was currently experiencing a three-year worse situation of 14 per cent inflation, adding that the inflation figures for February was due to increases in non food inflation of 19 per cent with food inflation of eight per cent.
The constituents of this challenge, Mr Ampah, said was the consistent increase in the price of fuel in the first quarter of the year, increases in the prices of utility, poor agricultural production and exchange rate depreciation.
Touching on the depreciation of the cedi, Mr Ampah said the short term measure by the Bank of Ghana (BoG) was to check the rate of depreciation as it was marginal.
He said the measure had put a lot of strain and uncertainty on importers because a quota had been given on the amount of foreign currencies one could carry around.
This, Mr. Ampah said, was the best way of dealing with the depreciation of the cedi, adding the currencies in most African countries were suffering similar fate due to the tapering in the United States and challenges faced by most developing countries.