Let economic stability reflect in affordable loans – GUTA urges government

The Ghana Union of Traders Association (GUTA) has asked the government to make the economic stability enjoyed in the first two quarters of 2023 have an impact on affordable loans to traders and businesses.

Dr Joseph Obeng, President, GUTA, in an exclusive interview with the Ghana News Agency ahead of the 2024 budget presentation lauded the government for ensuring some reduction in inflation and cedi depreciation.

“The stability we’re experiencing now, especially, for the first two quarters of 2023, is good for us; inflation has responded positively and depreciation of the cedi has not been bad,” Dr Obeng said.

“However, these are not at an appreciable level for businesses and industry to thrive, coupled with high-interest rate and taxes, as lack of access to affordable credit remains a challenge,” he said.

He attributed the current economic stability to the impact of the US$600 million first tranche of the US$3 billion loan-support programme with the International Monetary Fund (IMF).

The GUTA president explained that the Fund programme had helped restore confidence in the banking and financial system and pushed inflation downwards.

“Nonetheless, we want the government to ensure that we are able to have inflation around 15 per cent in the short term, and monetary policy rate reduced to reflect low-interest rate, so we can have access to affordable credit,” he said. 

That, when done, together with a reduction in taxes, Dr Obeng said would not only help traders, but industry, many of whom had been badly affected by the recent economic challenges.

Meanwhile, he said discussions held with the Finance Ministry in view of the 2024 budget, “showed positive signs of some tax relaxation, though we’re yet to see the figures and how its impact will be on businesses.”

“We’ve sent our proposals, including the COVID-19 levy, which we want to be removed, special import levy, and VAT, which we expect some reductions,” the Association president said.

Ghana is currently implementing its 17th loan-support programme with the IMF as a result of economic hardship, borne out of the adverse impact of the COVID-19 pandemic, the Russia-Ukraine war, and structural challenges.

However, recent figures from the Ghana Statistical Service (GSS) have shown some signs of recovery.

The country’s Gross Domestic Product (GDP) growth has rebounded, averaging 3.2 per cent in the first two quarters of 2023, compared with the same period in 2022, mainly on the back of growth in Services and Agriculture.

The latest price development in August 2023 also indicated a fall in headline inflation after a consecutive upward trend since May 2023, which dropped to 40.1 per cent in August 2023, with a further drop to 38.1 per cent in September 2023.

In terms of currency depreciation, as of September 2023, the cedi depreciated year-to-date cumulatively by 23.5 per cent compared to the same period in 2022.

“Notwithstanding uncertainties around global economic recovery, we are confident that we are on the right path and, therefore, optimistic about the future,” Ken Ofori-Atta, Finance Minister said.

He said this after Ghana reached a Staff-Level agreement with the IMF on economic policies and reforms to conclude the first review of the three-year loan-support programme.

“The economy entered 2023 with a significant growth momentum and the economy has been more resilient than expected,” an IMF Spokesperson said in a mail correspondence with GNA on the back of recent developments in the Ghanaian economy.