Take actions to restore investor confidence

THE country is going through economic turbulence brought on by a mix of internal and external factors.

What makes the external facts bite harder on the economy is the lack of resilience, buffers and safety nets in the economy.

Financial and investment experts who gathered at the Labadi Beach Hotel yesterday for the Graphic Business/Stanbic Bank Breakfast Meeting rightly diagnosed how the country got into its economic and fiscal difficulties and also proffered some solutions..

(Read stories on pages 1, 3, 24  & 25)

The economic meltdown in the country is basically the result of heavy borrowing over the years, following the debt forgiveness given nations under the Heavily Indebted Poor Countries (HIPC) initiative of the World Bank and the International Monetary Fund (IMF).

That created the space for the country to borrow more thereafter, throwing caution to the wind.

Besides the heavily borrowing, the panellists also converged on the fact that inefficient resource management and prioritisation of projects and programmes had led to unsustainable debt levels.

The results are seen in high inflation and interest rates, a generally worsening macroeconomic environment, among others.

These have affected private investments in the productive sectors and the money and the capital markets.

The Domestic Debt Exchange Programme, which invited holders of government bonds to exchange them for new ones with lower yields and higher tenors, has dampened investor confidence to the lowest level.

The Daily Graphic associates itself with the diagnosis of the challenges by the panellists and the solutions suggested, particularly the need for the government to tackle macroeconomic fundamentals with all urgency.

This is because given the fact that investors are rational, it will be difficult for them to invest if inflation and interest rates continue to be high and local businesses still face unbridled competition from substandard/subsidised products from outside.

The Daily Graphic wants to join hands with the experts in calling on the government to rationalise and prioritise projects, complete those that have been started and avoid pursuing projects and programmes that are in the interest of the party and rather pursue those that are in the national interest.

Cutting government expenditure does, indeed, go beyond reducing the size of government and emoluments, as it includes the quality of public investments, taking into consideration the priorities and quality of work.

Doing this fits in perfectly with the need for a national development plan.

So many people and authorities have harped on such a plan, but somehow governments continue to ignore it, so that parties’ positions on development will hold sway.

To revive investor confidence, it is important to increase transparency and information flow to guide decision making.

The paper could not agree more with the panellists that more has to be done to saturate the system with information and disclosures, beyond what listed companies are enjoined to do.

State apparatuses have equal responsibilities.

Another area that came up in the discussions is the pensions industry.

According to official figures, the sub-sector had more than GH¢25 billion in assets under management.

The Daily Graphic again supports the panellists that regulators should work with the industry to come up with innovative ways of utilising such funds in the productive sectors of the economy.

The paper wants to use this opportunity thank all panellists  the Director-General of the Securities and Exchange Commission (SEC), Rev. Daniel Ogbarmey Tetteh; an Associate Professor of Economics at the University of Ghana, Prof. Ebo Turkson, and a former Chief Executive Officer of the National Pensions Regulatory Authority, Dr Dan Seddoh, as well as the Managing Director of the GSE, Abena Amoah, who chaired the function  for their insightful contributions.

Thanks also go to our faithful partner, Stanbic Bank Ghana, for the unflinching belief in the Graphic brand and the support over the years to make the Graphic Business/Stanbic Bank Breakfast Meeting a true thought leadership platform where important issues of national importance are discussed and brought to the fore.

The Labadi Beach Hotel and Multimedia were equally exceptional in their partnership to make the programme a success.

The Daily Graphic assures its readers and audiences of sustained quality contributions in information dissemination and deepening public discourse.

Indeed, our next big conversation, the Graphic National Development Series, scheduled for the Ashanti Regional capital, Kumasi, on Tuesday, March 28, this year, will be an all-inclusive conversation on agriculture.