FINANCIAL AND ECONOMIC DATA GHANA JANUARY 2020 – 3

MPC-Press-Release-January-2020-4

Summary-of-Economic-Financial-Data-January-2020

FINANCIAL AND ECONOMIC DATA GHANA JANUARY 2020 – 3 DISCUSSES

— GOVERNMENT FISCAL OPERATIONS,

— MONETARY INDICATORS,

— BANKING SECTOR INDICATORS, AND

— STOCK MARKET PERFORMANCE.

ADDITIONAL, WE WILL TAKE A LOOK AT PAYMENT SYSTEM DATA.

AS USUAL, YOU CAN DOWNLOAD BOTH BANK OF GHANA DOCUMENTS FROM THE TOP OF THIS ARTICLE.1) GOVERNMENT FISCAL OPERATIONS

HERE WE GET TO THE MOST CRITICAL PART OF THIS OVERVIEW. THE AVAILABLE DATA SHOW A MIXED PICTURE. STARTING WITH THE WORST ONE, THE TOTAL PUBLIC DEBT INCREASED TO 62.1% OF THE GDP. WE CANNOT EXPECT THIS PERCENTAGE TO GO DOWN SUBSTANTIALLY THIS YEAR. THAT’S BECAUSE WE ARE IN AN ELECTION YEAR, WHEN GOVERNMENT EXPENSES USUALLY SHOOT UP.

WHAT WE CAN EXPECT IS THAT REVENUE COLLECTION INCREASES. LUCKILY, THAT IS THE CASE TO SOME EXTENT. DOMESTIC REVENUE JUMPED TO THE HIGHEST LEVEL SINCE DECEMBER 2018. PROBABLY, THE REASON FOR THAT WAS THE CHRISTMAS SEASON. THE TAX REVENUE ALSO INCREASED BY AROUND 50% TO 12.2% OF THE GDP.

UNFORTUNATELY, THE EXPENDITURE ALSO GREW BY ALMOST 5% OF GDP. IT NOW REACHED 19.6% OF GDP. THEREFORE, THE OVERALL BALANCE ON CASH BASIS INCREASED TO -4.8% OF GDP. FORTUNATELY, THAT IS STILL WITHIN THE RANGE OF 5% THE GOVERNMENT HAS SET.

I HAVE ALREADY MENTIONED THE INCREASE IN PUBLIC DEBT. LEFT TO REVIEW HERE REMAINS THAT THE RELATION BETWEEN DOMESTIC AND EXTERNAL DEBTS ALMOST STAYS THE SAME.

2) MONETARY INDICATORS

THE RESERVE MONEY INCREASED FAIRLY BY 33% ANNUAL GROWTH, AND SO DID ALL OTHER MONETARY AGGREGATES. IN THIS CONNECTION, IT’S INTERESTING TO NOTE THE TOTAL LIQUIDITY AND THE SOUTCE OF IT. BOTH ARE MOSTLY FOREIGN-BASED. FOREIGN CURRENCY DEPOSITS GREW SUBSTANTIALLY, AND SO DID FOREIGN ASSETS. IS THAT A SIGN OF MISTRUST TOWARDS THE LOCAL CURRENCY, THE  CEDI?

PERHAPS NOT REALLY, AS THE PRIVATE SECTOR CREDIT ALSO GREW IN FIGURES AND PERRCENTAGE GROWTH. ALTHOUGH NOT AS MUCH AS THE FOREIGN CURRENCY DEPOSITS, IT IS NEVERTHELESS A POSITIVE SIGN. PERHAPS, LOCAL INVESTORS WANT TO HEDGE A LITTLE.

3) BANKING SECTOR INDICATORS

WE NOW GET TO THE ECONOMIC DARLING IN GHANA IN THE LAST MONTHS. OF COURSE, THIS IS THE FINANCIAL SECTOR, AND HERE ESPECIALLY THE BANKING SECTOR.

HERE WE SEE A LITTLE BIT A MIXED, ALTHOUGH GENERALLY STILL A VERY POSITIVE PICTURE.

THE CAPITAL ADEQUACY RATIO HAS GONE DOWN, AS IT HAS GONE DOWN THROUGH THE WHOLE OF LAST YEAR. NEVERTHELESS, IT IS STILL FAR ABOVE THE MINIMUM CAPITAL ADEQUACY RATIO OF 10%.

MOST OF THE OTHER INDICATORS SHOW A POSITIVE DEVELOPMENT. AMONG THOSE, THE MOST IMPORTANT IS PROBABLY THE REDUCTION IN NON-PERFORMING LOANS (NPL). THEY WENT DOWN TO UNDER 14%. FURTHERMORE, EXCLUDED THE LOSS CATEGORY, IT IS ON ITS LOWEST  POINT SINCE ONE YEAR.

ALSO THE MANAGERIAL EFFICIENCY IMPROVED, AS DID THE LIQUIDITY INDICATORS.

ALL THESE FIGURES SHOW A POSITIVE DEVELOPMENT OF THE FINANCIAL SECTOR, ESPECIALLY THE BANKING SECTOR. THIS DEVELOPMENT ALSO REFLECTS IN THE STOCK MARKET PERFORMANCE, AT WHICH WE LOOK NEXT.

4) STOCK MARKET PERFORMANCE

BOTH INDICES OF THE GHANA STOCK EXCHANGE HAVE MADE A BIG JUMP AT THE END OF LAST YEAR. THE COMPOSITE GAINED OVER 100 POINTS DECEMBER TO NOVEMBER 2018, WHEREAS THE FINANCIAL EVEN GAINED OVER 200 POINTS IN THE SAME PERIOD.

SINCE THEN, THE STOCK EXCHANGE SHOWED A CERTAIN KIND OF STABILITY. THE COMPOSITE LOST A LITTLE SINCE THE BEGINNING OF THE YEAR, BUT NOT MUCH. PER LAST FRIDAY, IT IS A LITTLE BIT UNDER 2200 POINTS. HOWEVER, THE FINANCIAL REMAINED EFFECTIVELY ON THE SAME LEVEL AS AT THE END OF LAST YEAR. THESE STRUCTURES LET US HOPE THAT THE PERFORMANCE DURING MOST OF LAST YEAR WILL NOT HAPPEN AGAIN THIS YEAR. THEREFORE, THE FINANCIAL REFLECTS THE POSITIVE DEVELOPMENT IN THE BANKING SECTOR, AS SHOWN BEFORE.

CONSEQUENTLY, WE CAN HOPE FOR A FURTHER STABILISATION OF THE STOCK MARKET THIS YEAR ON A HIGHER LEVEL.

WE WILL NOW GET TO ANOTHER SECTOR OF THE FINANCIAL SYSTEM. THIS IS A RATHER NEW ONE, AND IT’S NEW IN THE SUMMARY OF ECONOMICAL AND FINANCIAL DATA. IT IS THE PAYMENT SYSTEM DATA.

5) PAYMENT SYSTEM DATA

THIS SECTOR SHOWS A STRONG PERFORMANCE OF THE MOBILE MONEY DATA. ALL FIGURES SHOWED AN INCREASE OF ECONOMIC ACTIVITY IN THE TIMEFRAME OF THE LAST TWO MONTHS. MOREOVER, THERE WAS A STRONG SHOWING DURING THE WHOLE OF LAST YEAR.

HERE, WE SEE AN OFTEN DEMANDED FINANCIAL INCLUSION OF PEOPLE WHO USUALLY DON’T HAVE ACCESS TO THE BANKING SYSTEM. PERHAPS, THE PEOPLE SHOULD USE THE ALSO OFFERED DIGITAL SAVINGS ACCOUNT MORE OFTEN.

CHEQUES CLEARED ALSO GREW IN THE NUMBER OF TRANSACTIONS AS WELL AS THE TOTAL TRANSACTION VALUE.

UNLIKE THAT, E-ZWITCH AND ACH DIRECT DEBIT WENT DOWN. THIS IS PROBABLY DUE TO THE GROWTH OF THE USE OF MOBILE MONEY.

ALL OTHER PAYMENT DATA POINT TO A STRONGER ECONOMIC ACTIVITY. THIS IS ALSO A SIGN FOR AN INCREASED FINANCIAL INCLUSION OF THE WHOLE POPULATION.

6) CONCLUSION

FINANCIAL AND ECONOMIC DATA GHANA JANUARY 2020 – 3 FINISHES THE OVERVIEW OF THE DATA THE BANK OF GHANA HAS COMPILED. THESE DATA SHOW GENERALLY THAT THE GOVERNMENT IS ON THE RIGHT TRACK TO DEVELOP THE ECONOMY. NEVERTHELESS, A LOT REMAINS TO DO. THIS IS ESPECIALLY TRUE FOR THE FISCAL OPERATIONS OF GOVERNMENT. LET’S HOPE THAT AFTER THE 2020 ELECTIONS, THE ECONOMY IN GHANA WILL CONTINUE TO IMPROVE.

STAY TUNED TO GHANARESEARCH ALSO IN FUTURE!

 

 

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