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Reversal of COVID-19 era reliefs to banks will mop up excess liquidity – Nana Otuo – Citi Business News

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Banking consultant Nana Otuo Acheampong is confident that the reversal of the COVID-19 era reliefs given to Universal Banks, will help in mopping up excess liquidity within the banking system.

According to him, instead of lending to the private sector, banks in the country continue to use the excess liquidity they have to buy treasury bills.

Per the latest Monetary Policy Report from the Bank of Ghana, Investments in Treasury bills and securities continue to be the preferred asset choice of banks during the pandemic, evidenced by banks’ portfolio reallocation in favour of these less risky assets as of end-December 2021.

The share of treasury bills, securities, and equity in total assets increased to 46.2 percent from 43.1 percent, on account of the 29 percent (year-on-year) growth in these investments in December 2021, relative to the sluggish growth in credits.

In its attempt to boost productive activity in the economy at the height of the pandemic, the Central Bank introduced several reliefs for universal banks, which was expected to release funds to be given out to enterprises. Unfortunately, the funds were largely used in buying treasury bills.

The Bank of Ghana, effective April 1, 2022, will reverse the COVID-19 era reliefs.

From reducing the Cash Reserve Ratio from 10% to 8% during the pandemic which released an extra GHC 2 billion into the economy, the Cash Reserve Ratio will now be increased to 12 percent.

The Capital Conservation Buffer which was reduced by 1.5 percentage points to 11.5 percent, a move that provided capital relief of about GHS1.1 billion for banks, has been reset to the pre-pandemic level of 3 percent, making the Capital Adequacy Ratio a total of 13 percent.

In addition to the above, the provisioning rate for loans in the Other Loans Exceptionally Mentioned (OLEM) category is reset to the pre-pandemic level of 10 percent.

Speaking to Citi Business News, Banking Consultant Nana Otuo Acheampong noted that the measures are needed, as the banks did not use the excess funds released into the system for what it was intended for.

“For a while the banks have been using the excess liquidity to buy T-bills. We thought that with the exit of the Bank of Baroda which was using about 95% of their liquidity to buy T-bills the other banks would stop that practice. But it hasn’t stopped. Instead of lending to the private sector they are using the excess liquidity to buy T-bills. So the new measures by the Bank of Ghana will help to get some excess funds off the market.”



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Women in timber set agenda to drive afforestation for the survival of industry

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The Association of Women in Timber-Ghana (WiTG) has called for gender equity in timber processing factories.

The Association laments women have lost opportunities in the timber value chain due to the under-representation of women in forest governance.

A study conducted by the Global Timber Forum (GTF) revealed the ratio of men to women in timber processing factories globally is about 73% to 27%.

The Association of Women in Timber-Ghana (WiTG) has been launched in Kumasi to help build and increase the participation of women in the sector.

President of the group, Ernestina Owusu Banahene, says the Association will join forces with research institutions to tackle issues of reforestation for future supply of raw materials.

Women in timber set agenda to drive afforestation for the survival of industry
President of the group, Ernestina Owusu Banahene

“Considering the role of women in this male-dominated sector, I believe we deserve the needed recognition, it was prudent for women in the sector to come together to project their importance and contributions in the forest sector, hence the Women in Timber-Ghana (WiTG) Association. 

What the WiTG platform offers is a tailored solution to addressing industry challenges that are affecting women,” she said.

 The Minister of Lands and Natural Resources, Samuel Jinapor, believes the Association will help women in the forest sector to showcase their abilities to improve activities in forestry.

He was represented by Edith Abruquah, the Acting Executive Director of the Forestry Commission.

“Participation of women in the sector is arguably often overlooked. 

I was elated when I received a briefing on this laudable initiative of establishing a Women’s Group to serve as a platform to promote the contributions of women in the sector while offering opportunities for building their capacities to ensure that they manage their businesses viably.

I am convinced that this Association, in addition to other ongoing initiatives by the Ministry of Lands and Natural Resources will prove useful in addressing gender inequality for every Ghanaian woman in the forest sector to showcase their abilities and capacities in order that society at large will be beneficiary,” Mrs. Abruquah read on behalf of the sector minister

Women in timber set agenda to drive afforestation for the survival of industry

The launch of the Women in Timber-Ghana Association in Kumasi was on the theme: “Strengthening Women’s Participation in Forestry and Wood Industry in Ghana”.

The association currently has 150 registered members.



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Major players in capital market across West Africa push for speedy integration  

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Rev. Daniel Ogbarmey Tetteh

Major players in the capital market across West Africa have intensified efforts to integrate their operations, to enhance cross border trading.

According to the stakeholders, the move to integrate, which began about five years ago was distorted due to uneven regulations among capital markets in the sub region.

Speaking on the first day of the two-day West Africa Capital Market Conference 2021, in Accra, the Director General of the Securities and Exchange Commission, Rev. Daniel Ogbarmey Tetteh stressed that countries with stronger capital markets have decided to start the integration and later allow others to join.

He stressed the need to move faster towards integration since it will enhance the capital market performance in the sub-region.

“Capital markets are key areas for development because they provide funds for long term capital investment. The interesting bit about having integration in the sub-region is that it will enable an issuer to have access to more fund in the region for capital expenditure”.

He stated for example that an integration will provide an opportunity for Nigerians to invest in Ghana and vice versa.

The West Africa Securities Regulators Association (WASRA) is the regional association for Capital Market Regulators in West Africa with the mandate of facilitating corporation and consultation among Capital Markets in the West African region.

As a flagship programme of WASRA, the conference is a biennial event that seeks to present the West African region and indeed Africa as a whole the opportunity to address important issues related to the orderly growth and development of the regional and continental capital markets.

The conference brought together relevant stakeholders and experts including but not limited to regulatory agencies, market operators, inter-regional economic bodies, and stock exchange managers.

The Managing Director of the Ghana Stock Exchange (GSE) Ekow Afedzie emphasized the need for a quick integration of the capital market on the continent.

“The processes have delayed for a while and for some observers the integration can start gradually so that other countries can join later,” he said.



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Ghana hosts 31st Annual Meeting of Board of Governors of ACBF

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The Government of the Republic of Ghana is hosting the 31st Annual Meeting of the Board of Governors of ACBF from May 23rd, 2022, at the International Conference Center.

The main objective of the meeting is to seek broad policy and strategic direction for the foundation as well as discuss sustainability issues.  

In this regard, the Board of Governors will receive from an update on the activities of the Secretariat and the 2021 Financial Statements from the Executive Board.

With 2022 being the last year of the current strategy (2017-2022), the meeting will also discuss what is on the horizon and consider the roadmap to develop the next strategy.

The 31st Annual Meeting presents an opportunity to showcase the continued relevance of the foundation and increase its visibility. This is also an opportunity to deepen the partnership with member countries and strategic institutions such as multilateral and regional partners.

The Board of Governors of ACBF which is the highest policy making body of the Foundation comprises representatives of ACBF member countries and non-African countries, as well as the World Bank, the African Development Bank (AfDB), and the United Nations Development Programme (UNDP). The Governors are usually African Ministers of Finance and/or Economic Planning, Directors-General or other high level representatives of international development cooperation agencies for non-African countries.

The Board of Governors has a bureau of three members, (Chairperson and two Vice-Chairpersons) who are elected annually.

The Minister of Finance, Ken Ofori-Atta, is the current Chair.

Its main responsibility is to set the broad policies for the operation of the Foundation, as well as the appointment of the independent members and chairperson of the Executive Board.



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