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Real sector economy records improvement in performance in January 2022 – BoG

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The real sector of the economy recorded an improvement in performance in January 2022, the Bank of Ghana has stated in it March 2022 Monetary Policy Report.

Activities in the manufacturing sub-sector, gauged by trends in the collection of direct taxes and private sector workers’ contributions to the Social Security and National Insurance Trust (SSNIT) Pension Scheme (Tier-1), recorded a positive performance in January 2022.

Total direct taxes collected increased by 4.3% (year-on-year) to ¢1.430 billion in January 2022, relative to ¢1.371 billion recorded in January 2021.

However, on a month-on-month basis, total direct taxes collected for January 2022 declined by 72.2% from ¢5.148 billion collected in December 2021.

In terms of contributions of the various sub-tax categories, Income tax (PAYE and self-employed) accounted for 45.3%, whilst corporate tax accounted for 43.4 percent and “Other Tax Sources” contributed 11.3%.

Construction Sector Activities

Activity in the construction sub-sector, proxied by the volume of cement sales, declined by 6.05 (year-on-year) in January 2022 to 314,654.79 tonnes, compared with 334,700.22 tonnes recorded a year ago. On a month-on-month basis, total cement sales dipped by 5.9% in January 2022 compared with 334,344.22 tonnes recorded in December 2021.

The decline in total cement sales was due to a slowdown in construction activities during the review period.

Vehicle Registration

Transport sector activities, gauged by new vehicle registrations by the Driver and Vehicle Licensing Authority (DVLA), however improved by 9.6% to 50,374 in January 2022, from 45,963 vehicles registered during the corresponding period of 2021.

On a month-on-month basis, DVLA vehicle registrations rose significantly in January 2022, in line with seasonal trends.

Industrial Consumption of Electricity

Consumption of electricity by industries went up by 11.7% on a year-on-year basis, during the period under review. Industries consumed 269.43 gigawatts of power in January 2022, as against 241.24 gigawatts recorded for the corresponding period in 2021.

On a month-on-month basis, electricity consumed by industries in January 2022 increased marginally by 1.5% from 265.38 gigawatts utilised in December 2021.

The improvement in power consumption was mainly due to increased industrial activity by manufacturing companies during the review period.

Passenger Arrivals at the Airport

International passenger arrivals increased by 52.8% to 56,285 in January 2022, compared with 36,838 arrivals recorded a year ago.

On a month-on-month basis, passenger arrivals declined by 34.2%.

The year-on-year increase in passenger arrivals reflected the continuous easing of travel restrictions in the country.

Ports and Harbours Activity

International trade at the country’s two main harbours (Tema and Takoradi), as measured by laden container traffic for inbound and outbound containers, improved during the period under review.

Total container traffic grew marginally by 0.9%, year-on-year, to 62,062 in January 2022, up from 61,500 for a similar period in 2021.

On a month-on-month basis, total container traffic decreased by 4.1% when compared to 64,727 recorded in December 2021.

The relative year-on-year improvement in port activities was due to an uptick in international trade activities as global COVID restrictions eased over the review period.



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Mobile Money transactions register 9.99% year-on-year growth in 4-months of 2022

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Mobile Money transactions recorded 9.99% year-on-year growth to ¢331.2 billion in the first four months of 2022.

However, in the first four months of 2021, Mobile Money transactions stood at ¢301.1 billion.

According to data from the Bank of Ghana, transactions via Mobile Money grew consecutively until April 2022 when it dipped slightly.

The Electronic Transaction Levy (E-levy) was implemented from May 1st, 2022 and that could have accounted for the slight dip in the April 2022 number.

However, it’s early days to determine whether the implementation of the E-levy will significantly affect Mobile Money Transactions or not.

The Mobile Money transactions in the first four months of this year were January 2022 (¢76.2bn), February 2022 (¢76.8bn), March 2022 (¢90.5bn) and April 2022 (¢87.7bn).

Comparatively to the same period in 2021, Mobile Money transactions were estimated at January 2021 (¢67.1 billion), February 2021 (¢67.9 billion), March 2021 (¢82.3 billion) and April 2021 (¢83.8 billion).

During the whole of 2021 even with the announcement of E-levy, there were month-on-month fluctuations in Mobile Money transactions.

In terms of Mobile Money Interoperability, ¢10.51 billion were recorded in the first four months of 2022. This is compared with ¢4.59 billion during the same period in 2021.

Undoubtedly, Mobile Money remained the biggest payment solution in the country with an estimated ¢905.1 billion transactions recorded in 2021.

According to data from the Bank of Ghana, the value of mobile money transactions in January, February, March, April, May, June, July, August, September, October, November and December 2021 were estimated at ¢67.1 billion, ¢67.9 billion, ¢82.3 billion, ¢83.8 billion, ¢86.5 billion, ¢89.1 billion,



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Average lending rate rises to 21.6% in April 2022 – BoG

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Average lending rate of commercial banks rose to 21.6% in April 2022, from 20.57% in March 2022, the Bank of Ghana has disclosed.

This is equivalent to 1.8% interest on loans per month.

However, the average lending rate varies among the banks and the respective sectors.

For instance, some banks will offer loans as low as 17% per annum, whilst others will charge rates as high as 29%. Overall, it will depend on the risk profile of the customers.

Again, some perceive lending to the agriculture and construction sectors as riskier, and therefore credit to these sectors are expensive.

According to the BoG Summary of Economic and Financial Data, cost of loans have been rising but marginally due to increasing inflation rate and other factors.

It rose from 20.16% in January 2022 to 20.52% in February 2022.

But average lending rate fluctuated in the first quarter of the year, and then fell consecutively till December 2021.

In January 2021, average lending rate stood at 20.97%, but shot up marginally to 21.02% in February 2021, and then fell to 20.96% in March 2021. After that it consistently dropped to 20.04% in December 2021 and later rose in January 2022.

But with the expected increase in the policy rate once again from its current 17%, lending rate is expected to go up further.

The Bank of Ghana will however hope the monetary policy measures to be announced on Monday May 23, 2022, will help bring down the rising inflation rate and consequently help reduce cost of borrowing going forward.



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Ghana’s public debt hits ¢391bn as of quarter 1, 2022

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Ghana’s public debt stock remarkably shot up by ¢40.1 billion to ¢391.9 billion as of the end of March, 2022, the Summary of Economic and Financial Data by the Bank of Ghana has revealed.

The increase in the debt is due to largely exchange rate fluctuation and to some extent borrowings from the domestic market. In the first quarter of 2022, the cedi assumed a free fall to the dollar, but its depreciation was halted in April 2022, following monetary measures by the Bank of Ghana.

However, in relation to the Gross Domestic Product of the country, the debt was estimated at 78%. This is slightly lower than the 80% recorded in December 2021.

According to the figures, the debt inched up by ¢20.5 billion in January 2022 and subsequently ¢19.7 billion in February 2022.

In terms of the domestic debt, it went up by ¢8 billion in the first quarter of 2022 to ¢189.9 billion in March 2021. This is equivalent to 37.8% of GDP.

Also, the external component of the total public debt shot up to $28.4 billion (¢201.9 billion) in March 2022, from $28.1 billion in December 2021. From the figures, clearly one can deduce that there were no borrowings from the external front in the first quarter of this year.

The debt-to-GDP ratio of the external debt is however approximately 40.2% of GDP.

The cedi component shot up by ¢31.9 billion in the first three months of 2022, primarily due to the decline in the value of the cedi to dollar during the period.

On the other hand, the financial sector resolution bond went down to ¢14.6 billion in March 2022, from ¢14.9 billion recorded in December 2021. This is equivalent to 2.9% of GDP.



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