UPDATE TO THE POSITION OF THE GHANAIAN ECONOMY

  IN THE LAST DAYS THERE HAVE BEEN A LOT OF DISCUSSIONS ABOUT THE QUALITY OF THE ECONOMY IN GHANA, ESPECIALLY THE QUESTION OF THE INTRODUCTION OF NEW TAXES. WELL, I DO NOT WANT TO INVOLVE MYSELF IN SPECULATIONS ABOUT WHETHER  NEW TAXES ARE NECESSARY OR UNNECESSARY, WHETHER THEY ARE GOOD OR BAD, ETC. I WILL WAIT UNTIL THE MID-TERM BUDGET IS READ ON THURSDAY, AND THEN GIVE AN EXTENSIVE ANALYSIS OF THE INTENDED MID-TERM BUDGET. 

ONLY ONE ISSUE SHOULD BE ADDED TO THIS STATEMENT: THE DEMAND FOR LOANS HAS INCREASED RECENTLY, BUT THE BANKS ARE RELUCTANT TO APPROVE THE LOAN APPLICATIONS. THAT MIGHT BE DUE TO THE BANKS MORE INTENSIVELY CHECKING THESE LOAN APPLICATIONS TO REDUCE THE RATIO OF NON-PERFORMING LOANS, AND THAT MIGHT BE A GOOD THING. BUT MORE PROBABLE SEEM TO ME THE ASSUMPTION THAT THIS IS DUE TO THE RAISING OF THE MINIMUM BANK CAPITAL TO 400 MILLION GHANA CEDIS AND THAT THE BANKS MUST SAVE MONEY. THIS THEN RESULTS IN THE DELAY OF OTHERWISE PRODUCTIVE USE OF LOANDS APPLIED FOR. THIS IS SHOWN IN VARIOUS PROJECTS THAT WERE PRIVATELY INITIATED ON THE DISTRICT LEVEL, WHERE NEGOTIATIONS WITH THE BANKS HAVE ALREADY STARTED, BUT GO ON AND GO ON AND GO ON WITHOUT A RESULT IN SIGHT. THIS IS ON ONE HAND UNDERSTANDABLE, AS THE FINANCIAL SITUATION OF FINANCIAL INSTITUTIONS IN GHANA CANNOT BE ADJUDGED POSITIVELY, BUT IT SOMEWHAT HINDERS THE DEVELOPMENT OF THE ECONOMY IN GHANA. THEREFORE, MY APPEAL TO THE MANAGEMENT OF FINANCIAL INSTITUTIONS IN GHANA IS TO DIFFERENTIATE BETWEEN LOANS FOR CONSUMPTON AND THE FINANCING OF ECONOMIC DEVELOPMENT. THESE MUST BE CHECKED THOROUGHLY, AS MUST BE THE CONSUMPTION LOANS, BUT AFTER THIS CHECK, THE PRODEDURE OF LOAN APPROVAL MUST BE STREAMLINED. Continue reading “UPDATE TO THE POSITION OF THE GHANAIAN ECONOMY”