Adnan Adams Mohammed
Several economists, analysts and the business community have appreciated the President John Mahama administration for the remarkable and unprecedented turnaround of the economy in the first 120 days of his government.
The key stakeholders of the Ghanaian economy including the ordinary citizens have all been amazed and jubilant as the local currency (Cedi) has in the past weeks appreciated against the US dollar and other foreign currencies amidst tax cuts and notable governance reforms.
A Managing Partner of Konfidants (an advisory firm), Michael Kottoh, noted a steady recovery in business confidence following a prolonged period of economic turbulence. He pointed out that past economic challenges such as; inflation, the domestic debt exchange programme, currency instability, and turmoil in the banking sector, had severely weakened investor sentiment beginning in 2022. However, he observed that the current macroeconomic environment has shown signs of stability, which have begun to restore optimism among business owners and investors.
“In the past 120 days, we have seen some macroeconomic stabilization, which is restoring a degree of business confidence. This is essential because without confidence, businesses are unlikely to invest, expand, or create jobs, even if broader economic indicators show signs of recovery,” Kottoh remarked during a radio discussion last week.
“We can talk about all the macros, [but] if the macro-economy situation is bad, and there’s no business confidence, industry is not going to invest. They are not going to employ, they are not going to create jobs. They’re not going to be able to pay taxes.”
He concluded by emphasizing that sustained macroeconomic stability is essential to creating a business environment conducive to investment, job creation, and long-term private sector growth.
In related development, the Ghana Union of Traders’ Associations (GUTA) has commended the Bank of Ghana for its effective management of the foreign exchange market, which has contributed to the strengthening of the Ghanaian cedi against major foreign currencies since the beginning of the year.
In a press statement signed by GUTA President Dr. Joseph Obeng and Head of Business and Economic Bureau Charles Kusi Appiah Kubi, the association noted that the recent gains in the cedi’s value have brought relief and renewed confidence to the business community.
“We wish to highly commend the Governor and his team for efficiently managing the forex market to this extent,” the statement said, highlighting the role of the central bank’s prudent policies and the government’s fiscal discipline in achieving this stability.
GUTA acknowledged that the strengthening of the local currency has helped businesses recover some of the capital lost during the recent years of economic volatility. More importantly, the group said, it has helped shift perceptions that foreign currencies are a more reliable store of value, fostering renewed trust in the local economy and currency.
“This has brought hope to the business community in recouping some of the lost capital during the last couple of years,” GUTA noted, adding that the current stability has also improved predictability in forex transactions, a key concern for importers and exporters alike.
The traders’ union encouraged the government and the central bank to maintain these economic measures, expressing optimism that sustained efforts would accelerate full economic recovery, enhance productivity, and help reduce the high cost of living.
“These prudent measures, if sustained, would lead to full economic recovery and make businesses competitive,” the statement concluded.
Additionally, some economic, trade, and agribusiness analysts are also calling for deliberate policy reforms and targeted investments to sustain the early gains achieved in the first 120 days. They point to the removal of certain taxes, consistent easing of inflation, and a stronger cedi as bold measures that have boosted business confidence and improved the overall investment climate.
Associate Professor Agyapomaa Gyekye-Dako of the University of Ghana Business School has highlighted the current administration’s efforts to streamline revenue sources and control public expenditure, while, praising the improvements in inflation and foreign exchange rates but cautioned against complacency, raising concerns over the recent decline in treasury bill rates.
“To send a signal that he’s committed to fiscal reforms is important for boosting confidence in the economy, which would impact many more macroeconomic variables,” she explained.
“However, the sharp drop in treasury bill rates suggests the government is reducing domestic borrowing. While this is positive, I believe the process should have been more gradual.”
Professor Gyekye-Dako also noted that with Ghana effectively locked out of the international capital markets, reliance on domestic borrowing strategies must be carefully managed to avoid unintended consequences.
Out of the 28 promises made under the 120-day social contract, 19 have been fulfilled, with seven still outstanding.
Among the key achievements are the successful hosting of a National Economic Dialogue, the launch of the One Million Coders programme, the abolition of the betting tax, and the establishment of the Accelerated Export Development Council.
The government has also operationalized the Women’s Development Bank, providing seed capital to support its launch. These initiatives have been cited as part of broader efforts to revitalize the economy and promote financial inclusion.
However, some major initiatives remain incomplete. These include the review of taxes on vehicles, the removal of the one percent COVID-19 levy, the commencement of the 24-hour economy initiative, and amendments to the Customs Act of 2020.
The government is yet to provide revised timelines for the completion of these outstanding promises.
Renowned economist, Professor Patrick Asuming, praised the government’s efforts, noting that despite financial constraints, the administration has performed appreciably well.
“Considering the circumstances, I think they’ve done fairly well. It’s very difficult coming into power under the conditions they faced. They did well setting up the core team relatively quickly. Some of the major promises, particularly related to taxes, have seen good progress. However, naturally, some elements of the 120-day contract will take more time. Perhaps the government underestimated the duration needed for full implementation,” Professor Asuming said.
He emphasized the need to complete the remaining initiatives to sustain public trust and support economic recovery.
“Overall, I think the appointments have been good, aside from maybe one or two exceptions, particularly regarding communication of the strategy. But generally, they’ve done well, and I would give them a very good score,” he added.
