The Chief Executive Officer of the Association of Ghana Industries (AGI), Seth Twum-Akoaboah, has urged government to take a careful approach as Ghana prepares to exit the International Monetary Fund (IMF) programme in the coming months.
He said recent gains in economic stability and investor confidence must be protected, warning that the end of the programme could bring new uncertainties.
“Going forward, we need to tread cautiously. With the IMF exiting in the next couple of months, what then is the implication? We’ve gained so much confidence in the system. We’ve encouraged people to invest now.
“The government has done very well in managing the economy in a very prudent manner. That has brought confidence. If the IMF exits, what is the implication?” he asked.
He stressed that maintaining investor confidence after the IMF exit will be key to sustaining economic progress.
Mr Twum-Akoaboah also called for stronger efforts to boost local production and reduce imports, saying Ghana remains vulnerable to global economic shocks.
“So we want to see that also manifesting. And then how do we also make imports—import substitution arrangements? I think that as a country, if you want to make gains out of these reforms and the costs that we are absorbing, it means that we must find a way to improve local production and reduce our imports so that we aren’t always at the mercy of the international market.
“The slightest shock, you feel it. Let’s increase local production. There are so many ways of doing that,” he said.
He further highlighted limited access to affordable medium- and long-term financing as a major challenge for industry, saying most financial institutions are not structured to support industrial growth needs.
“I think what we are lacking in the system is the kind of funding that will give loans to businesses, medium to long term. For industry, they need medium to long-term funding,” he said.
He mentioned institutions such as EXIM Bank, Development Bank Ghana, and the National Investment Bank, calling for a review of how much support they provide to the productive sector.
“Exim Bank is there, Development Bank has been introduced, the NIBs are there. We have to examine their operations to see what percentage of their money or portfolio is going to the real industrial sector,” he noted.
He also said lending rates from development finance institutions should reflect changes in the wider economy, especially as commercial interest rates decline.
“Exim Bank, for example, they’re always offering much lower interest rates. Now that the interest rate has dropped, what rate are they offering now? We need to know whether it is in tandem with the fall in the general interest rate? If it is, then that’s fine. But if at the point they were lending at 12% and the commercial rate was at 30%, now that it’s fallen to 17% to 15% or 16%, the rate must come down to like 6%,” he said on Channel One TV’s Quarterly Economic Outlook on Monday, April 27.
