Ken Ofori-Atta, Finance Minister
Ghana has been identified as one of the top 20 economies in the world that has substantial momentum in trade growth potential. This was contained in the Standard Chartered Trade20 index released this year. The Standard Chartered Trade 20 index tells the story of the rising stars of global trade, examining the progress that markets have made in the past decade to improve their potential for trade growth. The findings of the trade20 index offer encouragement in an era where growing protectionism and rising trade tensions have placed global trade in the spotlight as never before.
Ghana is one of the only three countries in Africa that made it to the prestigious list. The index had some countries such as India, Ireland, China, Chile among others.
In Africa, Kenya, Cote d’Ivoire and Ghana, the only three countries that made the index, were reported as a cluster of African economies that have shown substantial momentum in trade growth potential, placing them at the very top of the Trade20.
Major Strides
The report stated that the three African countries that made it are nations that were lacking this momentum not long ago and are now growing and modernising their economies.
The report highlighted particularly strong trade readiness exhibited by these countries driven by improvements to their business environments, with enhanced digital and physical infrastructure, adding that these are moves to improve the ease of doing business in these countries.
Methodology
The Trade20 examines 12 metrics across 66 global markets deemed as the major global economies plus the major economies in each region, to reveal the 20 economies that are most rapidly improving their potential for trade growth. While most traditional trade indices are based on a market’s present performance, the StanChart Trade20 index captures changes over time to reveal the markets that have seen the most improvement in the past decade. It looks at indices such as economic dynamism, trade readiness and export diversity.
Ghana’s Economy
Ghana has restored the fiscal discipline in the management of the economy, resulting in the macroeconomic indices pointing in the right direction. Policies such as the banking sector reforms has boosted confidence in the country’s banking industry. Other programmes such as the One district One factory, one village one dam, Planting for food and jobs, Planting for export and rural development among others have changed the face of the economy of the country. As such, the Economic Growth Rate (EGR), the rate at which a nation’s Gross Domestic Product (GDP), the market value of all the goods and services produced in the country in a particular time period, has grown from one year to another.
In 2016, Ghana’s GDP was 42.80 billion dollars with a 3.7 per cent increase in EGR. By 2017, the GDP rose to 47.33 billion dollars with an 8.5 per cent EGR increase.
The last figures from the GSS indicate that the EGR for the last quarter of 2018 was 7.4 per cent. At the end of 2016, Ghana’s Inflation was 17.5 per cent. This has been brought down drastically with inflation now at 7.8 per cent as at August 2019. The country’s debt-to-GDP which stood at 73.1 per cent in 2016, dropped to 69.5 per cent in 2017 and stood at 67.3 per cent by June 2018 according to the 2019 Budget statement. Monetary Policy Rate (MPR) by the end of 2016 was set at 25.5 per cent. By 2017 the government reduced the MPR to 20 per cent. The rate is now pegged at 16 per cent as of February 13, 2019. Also, interest rates on the 91-day treasury bills, which is literally government borrowing from local banks, has declined from 16.8 per cent in 2016 and now stands at 14.7 per cent.
As at the end of December 2016, Ghana’s Gross International Reserves was 6.2 billion dollars which translates into the amount needed for only 3.5 months of imports. By the middle of 2018, it had been improved to 7.3 billion dollars which is 3.9 months of imports.
