Conference of Econometric Society opens in Accra -gsmbizmen

The 18th annual conference of the African Econometric Society opened in Accra yesterday, with a call on economic researchers to link research work with everyday economic realities on the African continent.

The three-day conference, which is being attended by representatives of member-countries, is on the theme: “The Relevance of Policy Modelling in an Uncertain World with Specific Application to Africa”.

The Vice President, Mr Kwesi Bekoe Amissah-Arthur, who opened the conference, said it was unfortunate that the unpopularity of econometric as a subject had resulted in the lack of proper analysis in the formulation of policies.

He noted that policy was, therefore, unduly based on theory without critical analysis based on economic realities on the ground.

Mr Amissah-Arthur said it was heart-warming, therefore, that topics lined up for discussion during the conference had been based on African economic realities.

He called on policymakers to be well grounded in econometrics to avoid the situation where economic forecasting is not based on empirical data.

In a keynote address read for him, the Governor of the Bank of Ghana, Dr Henry Kofi Wampah, said since its inception in 2002, the inflation targeting (IT) framework had contributed greatly to monetary policy conduct, with positive economic outcomes in the country.

He explained that IT had helped to keep the bank’s focus on price stability and, to a large extent, made the bank to deliver on its price stability mandate, while economic growth rate had accelerated.

Dr Wampah said over the past decade, Ghana had seen a remarkable decline its inflation rate explaining that from 40.5 per cent (year-on-year) in December, 2000, inflation fell to 12.7 per cent in December, 2007, having touched single digits in April, 2006.

Inflation, according to him, crept to 20.7 per cent in June, 2009, following external shocks, but after adjusting the policy rate along with other measures, inflation fell to 9.5 per cent in July, 2010, and remained in single digits before moving into low double digits in February, 2013.

He said monetary policy decisions had also created the right conditions for economic growth, as evidenced by strong growth records, following the adoption of inflating targeting.

Dr Wampah added that the low inflationary environment together with other prudent and complementary macroeconomic policies stimulated high growth rates that averaged 7.1 per cent per year between 2002 and 2012, compared with a 4.5 per cent average growth between 1986 and 2001.

The BoG Governor said that achieving the price stability objective had been facilitated by supportive fiscal policy, adding that sustained achievement of price stability would require a contradictory fiscal policy and strengthen co-ordination between fiscal and monetary policies.

Dr Wampah said the bank had since 2002, implemented a number of structural and regulatory reforms to develop the financial sector.

The money and capital markets, the banking and non-bank financial institution as well as the settlement and payment systems had seen structural reforms, he said.

In addition, the financial sector regulatory framework had been extensively reviewed alongside the enactment of new laws to strengthen the bank’s supervisory powers.

In his remark, the Vice Chancellor of the University of Ghana, Professor Ernest Aryeetey, urged policymakers to use policy to shape the country’s trade and economic development.

He told the delegates that the University of Ghana was in a process of a research-based institution.

Prof Aryeetey said the university would establish centres of excellence in areas such as malaria, climate change adaptation, food production and processing and policy monitoring and evaluation.

euro bond over subscrition shows strength

Mr Felix Kwakye-Ofosu, a Deputy Minister for Information and Media Relations, on Friday said the over subscription of Ghana’s floated one billion Eurobond was a demonstration of the Investor community confidence in Ghana.

He said the floatation, which was oversubscribed by 1.2 billion dollars, would help Government to undertake a number of development projects throughout the country.

Mr Kwakye-Ofosu, who stated this during the daily media briefings at the Flagstaff House, Kanda, said the Eurobond would also make available significant resources for counterpart funding for development projects.

Parliament on June 25, 2013, approved a request by the Government to issue its second Eurobond to raise one billion US dollars from the international capital market.

Proceeds from the bond would be used to finance infrastructure projects and restructure maturing debts and interest payments.

The deputy minister said 103 million dollars out of the amount would be used as counterpart funding for all the approved projects throughout the country while 284 million dollars would be used in the financing of approved projects.

Mr Kwakye-Ofosu said 157 roads would be rehabilitated with funding from the facility.

They include Apam-Akam road in the Central Region, Goaso- Kukuom in the Brong Ahafo Region, Fian-Wahabu road in the Upper West Region and the Berekum town roads.

He said 37 health projects would also be financed through the facility while Agricultural Mechanization centres for the 46 newly created districts would also be constructed to serve the aspirations of government in the coming years.

The first bond of $750 million was raised in 2007 with a coupon rate of 8.5 percent and maturity period of 10 years.