CediTalk is back gathering analysts to predict the Ghanaian economy for the sixth straight year. This year we waited for some important facts to be known, such as the composition of the Eighth Parliament of the Fourth Republic and also how big an issue the COVID-19 pandemic will remain before bringing you how we think the economy and markets will fare. Let’s get to it.

AGYA YAW OTENG ASANTE

Bio: Development Consultant, Policy Analyst, Oil and Gas Infrastructure Developer, and Political Commentator

The argument for unification is ever strong now. 

The central bank doesn’t need to enter panic mode in these trying times. Central bank’s cash outflows, in wholesale and retail markets (in the past year or two) was lots of billion dollars. With an un-unified exchange rate this can equate to hundreds of millions of Ghana cedis in arbitrage. If you have such huge amounts in arbitrage, people are going to take advantage of official channels and sell dollars at a higher rate thereby taking advantage of the arbitrage. These are losses to the economy because these amounts that are supposed to go into importation of raw materials and real production are going into speculation because someone bought and sold dollars. Unification closes out some of these arbitrage opportunities. 

I should project that this year, the central bank should take a closer look at unification of exchange rates across board. We can save monies for real production and raw material importation which will eventually provide jobs and expand the economy amongst other things in summary.

This is what I expect for the central bank in 2021. 

JEROME KUSEH

Bio: Economist & Financial Analyst

Public debt of 70%+ of GDP, a recession, a pandemic, above target inflation and a hung parliament all suggest that 2021 is not going to be an easy year for the country. The pressure on the exchange rate will accelerate after the first quarter when the inflows from foreign investors are expected and the world economy gradually picks up from the pandemic-fueled slump. Government may be forced to rely heavily on central bank financing or seek relief from the IMF as debt sustainability becomes a bigger issue for lenders. The stock market performance will continue to be hampered by the abundance of risk-free fixed income products and a general bearish sentiment.