Business News of Monday, 30 May 2016
The Group Head, Financial Markets of Standard Chartered Bank, Mr Jonathan Paul, has advocated the expansion of the manufacturing sector to help with the production of domestic goods. That, he said, would be a sure way to reduce the country’s rising import bill.
He said in the medium term, the manufacturing sector should continue to expand to enable the country to reduce its import dependence on other countries.
Interacting with the media during a two-day working visit to Ghana, Mr Paul said, “I believe in the medium term the manufacturing sector should continue to expand, so that, particularly, the goods that are consumed domestically should be produced domestically.”
Currently, the Ghanaian economy is largely dominated by the services sector, contributing more than 50 per cent of the Gross Domestic Product (GDP), followed by the manufacturing sector while the agriculture sector lags behind.
Stable power supply
Power supply in the country in recent times has been described as very critical characterised by inadequate generation reserve margins, excessive transmission network constraints and poor voltage support during peak demands.
Most businesses are feeling the full brunt of the erratic power supply in the country as they have to incur extra cost to find alternate source of power for their operations.
Mr Paul, however, pointed out that the country must have a stable source of power to enable the manufacturing sector to thrive.
“The first step for manufacturing to blossom here is stable power. I think the country is too import dependent now, the Cedi weakening over the years makes imports more expensive. There needs to be a focus on building manufacturing, but this can be done by ensuring a reliable source of power at a reasonable price,” he said.
Central Banks rise to task
According to him, the US Dollar has toppled against the basket of global trading currencies in the first quarter of the year, resulting in a relative stability of the other currencies including the Ghana cedi.
This, he said, meant that the Central Bank must rise to the task and take control of the monetary policy to help their currencies to remain stable.
“What has happened is that, the US dollar is down about eight and half per cent against the basket of currencies since the start of the year. We believe that we will continue to see the volatility and it will not go back to a strong level as we have seen against the basket of currencies including the Cedi,” he said.
He added, “what that means for central banks here and central banks around the world is that they get back control of their own monetary policy.”