Business24 ePaper ( February 21, 2020)

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EDITION B24|09

| FRIDAY FEBRUARY 21, 2020

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THEBUSINESS24ONLINE.COM

GH¢5bn relief for unpaid depositors Gov’t paid

US$1bn for unused power in 2 years

By Patrick PAINTSIL

Customers of the failed Savings and Loans (S&L) and microfinance companies are to get full payment of their locked-up funds because government has budgeted some GH¢5billion to guarantee their deposits. This development pushes the total cost to taxpayers of the financial sector cleanup to GH¢18 billion, with government having already dished out GH¢13 billion to guarantee deposits in the failed universal banks. “Depositors of the savings and loans and microfinance institutions, including DKM, which collapsed in 2015, will receive 100% of their deposits, too, once the validation exercise is concluded,” President Nana Addo Dankwa Akufo-Addo said in his State of the Nation Address (SONA) on Thursday. Inasmuch as the government has pledged to take up the cost, President Akufo-Addo stressed that coughing up that huge amount to settle the claims of affected depositors was a bitter pill to swallow, considering the scale of development projects it could have financed. Government had initially guaranteed up to GH¢20,000 per depositor, but the president’s declaration means that already-paid depositors whose claims exceed GH¢20,000 will receive the remainder of their funds, while those yet to access their cash will receive 100% payment. “This is money that we can ill-afford and which would have gone to fund the many things that our communities are crying for. Properly utilised, GH¢13 billion would work wonders with our perennial infrastructure deficit,” President Akufo-Addo said in relation to the earlier payout. Banking sector liquid and sound to push economy Although the cleansing of the financial sector has caused

By Benson AFFUL

The country paid nearly US$1billion for unused power in two years, as a result of the many ‘take or pay’ contracts signed in previous years. President Nana Addo Dankwa Akufo-Addo in his State of the Nation Address (SONA) 2020 presented to the 275-member legislature on Thursday, February 20, 2020, said excess power payments are a drain on the country’s revenue envelope and has severely restricted government’s ability to undertake various infrastructure projects. “The five years of energy crisis led to the signing of what can only be described as various contracts that have landed our country with a huge financial burden. The take MORE ON PAGE 2

some loss to the public purse, it has resulted in a sound and liquid banking sector to drive national economic aspirations, according to the president. He indicated that: “Thanks to the banking sector clean-up, today I am happy to say that Ghana’s weak banking sector that we inherited is now well-capitalised, better managed, sound and liquid, and the banks are now increasing their lending to the private sector to help propel the transformation of the economy beyond aid.” According to figures from the Bank of Ghana, total assets of

the banking sector grew by 22.8% to GH¢129.1 billion in 2019, compared with a growth rate of 12.3% to GH¢105.1 billion in 2018. Banks’ deposits also saw an annualised growth of 22.2% to GH¢83.5 billion in 2019, compared with an annualised growth of 17.3% to GH¢68.3 billion in 2018. Private sector credit meanwhile has recovered, growing by 18.3% to GH¢44.5 billion, up from the previous growth rate of 10.6% to GH¢37.6 billion. President Akufo-Addo urged depositors to see the grand pay-

FEATURE

FEATURE

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out as a learning curve and to desist from falling prey to unrealistic offerings from financial services providers. “We hope that lessons have been learnt, and this will serve as a healthy caution to those who are offered unrealistic interest rates on deposits. We expect that those whose job it is to supervise the banks and other financial institutions will do their jobs honestly and competently,” he indicated.

Trade Minister to face Parliament over Trade Fair demolitions By Eugene Davis

Trade and Industry Minister, Alan Kyerematen, is to be hauled before Parliament to explain the rationale for the demolition of properties of some selected businesses sited within the Trade Fair enclave by one of its agencies—the Ghana International Trade Fair Company. This follows a visit to the Trade Fair site where the demolition took place by the Minority members of Parliament. According to them, MORE ON PAGE 2

INTERNATIONAL MARKET

ECONOMIC INDICATORS

AS AT FEB. 20, 2020 BBRENT CRUDE $/BARREL: +0.13 ($59.25) NATURAL GAS $/MILLION BTUS: +0.00 ($1.96) GOLD $/TROY OUNCE: +0.30 ($1,612.10) SILVER $/TROY OUNCE: +0.07 ($18.38) CORN $/BUSHEL: -3.75 ($382.25) COCOA $/METRIC TON: +1.00 ($2,847.00) COFFEE ¢/POUND: +0.15 ($109.00) SUGAR ¢/POUND: +0.21 ($15.08)

EEXCHANGE RATE (INT. RATE): USD$1 =GH¢5.3631 EXCHANGE RATE (BANK RATE): USD$1 =GH¢5.4800 POLICY RATE:16% GHANA REFERENCE RATE : 16.11% INFLATION RATE: 7.8% PRODUCER PRICE INFLATION: 13.3% 91 DAY TREASURY BILL INTEREST RATE: 14.6898% AVERAGE PETROL AND DIESEL PRICE: GHC 5.48

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