* $1.46bn remittances in 3mths
* Inflation 9.5% .. Exports up 31%
* Base rate down to 20% .. Credit to private
Accra, May 26 (Statesman) -- The Monetary Policy Committee of the Bank of Ghana has released their periodic report on the performance of the national economy in the first quarter of this year. What the facts and figures show is that the economic revival since 2001 is not a mirage.

Again, what the figures show is that this is the longest sustained economic revival in the country?s history since 1957. Better still, the unprecedented success has been achieved under an atmosphere of historic period of peace, stability and liberty.

For instance, despite the price of crude oil increasing by 21 percent between January and April, the Gross International Reserve position of Bank of Ghana registered a year-on-year increase of 24.2 percent to $1.91 billion in April 2006, providing 3.8 months of import cover, with non-crude oil imports themselves up by 20 percent.

The rise and rise of money transfers is unyielding. In the first three months of this year, private inward transfers ? from NGOs, religious groups, individuals etc. - through the banks and finance companies for January ? amounted to $1.46 billion, which represents a 51.2 percent increase over the corresponding period in 2005.

Of the total transfers $425 million (29.0 percent) represented remittances from individuals. By all indications, the total amount of remittances for this year is likely to hit close to $8 billion at the end of the year, with the last quarter alone likely to reach $2.7 billion.

There are also strong indications that local manufacturing output is on the rise. Nearly 70 percent of total non-imports was accounted for by intermediate and capital goods, while consumption goods accounted for 21.9 percent.

The rapid growth in consumer spending certainly does not reflect the sentiment that the economic situation is dire. Non-oil imports, generally, are provisionally estimated at $1,141.5 million, compared with $948.8 million for the same period last year, an increase of 20.0 percent. Intermediate and capital goods accounted for 69.3 percent of total non-oil imports Typical of the upswing in economic activity, domestic credit has also expanded rapidly, going up by ?5,559.0 billion (an increase of 42.1 percent) in the twelve months to March 2006.

?A significant proportion of the increase occurred during the last nine months of the period, more than doubling the increase of ?2,602.5 billion recorded for the same period in 2005,? Paul Acquah, the Governor of the central bank told reporters Monday.

The private sector accounted for 64.2 percent of the credit growth, with the manufacturing sector having 23.0 percent, only second to the service industry.

The banking sector is growing stronger and stronger, a necessary requirement for economic revival. Their total assets amounted to ?39,733.4 billion as of end-March 2006, showing an annual growth of 23.3 percent.

Non-performing loans declined from 15.73 percent in March 2005 to 12.9 percent in March 2006 as a proportion of gross loans, suggesting that more and more borrowers are now able to service their loans ? a prime evidence of the benefits of macro-economic stability to businesses.

Although, the price of cocoa on the London International Futures and Funds Exchange was ₤891/tonne at the end of April, down by from ₤916/tonne at the beginning of the year, earnings from cocoa beans and products amounted to $360.0 million, 18.0 percent above the $305 million recorded for the first quarter of last year.

Gold exports on the other hand amounted to $293.9 million, representing a 32.0 percent increase over the same period in 2005.

On the whole, total export earnings for the first quarter is provisionally estimated at $959.0 million, an increase of 31.2 percent above the $730.8 million recorded for the same period last year. The improvement was reflected in all major export categories.

Interest rates on the money market have continued to be stable along a downward trend during the first four months of the year.

The Monetary Policy Committee has kept the Bank of Ghana Prime rate unchanged at 14.5 percent.

The benchmark 91-day Treasury bill rate declined by 180 basis points to 9.60 percent, with more and more people shifting to instruments with longer maturity periods.

Average base rate quotations of commercial banks declined by 20.0 basis points to 21.25 percent, within the range of 19.9 percent and 22.5 percent. Average bank lending rates also declined to 26.0 percent over the same period, within a spread of 18.5 percent and 33.5 percent depending on the bank and the borrower.

But, with the interbank overnight money market rate at 8.58 percent, there is every indication that the banks can do more to make credit more affordable and attractive. Headline inflation (measured on a year-on-year basis) was 9.5 percent in April, coming down from 14.6 percent in January. After jumping from 0.7 percent in January to 2.5 percent in February following the February re-alignments of domestic petroleum prices, the monthly increase of the CPI subsequently declined to 2.1 percent in March and further to 1.6 percent in April.

Finally, the cedi continues to show stability against the United States dollar, however, losing ground against the pound sterling and the euro. Over the first four months of the year, the cedi depreciated by 0.2 percent against the dollar but by much more, by 4.1 and 7.8 percent, against the pound sterling and the euro respectively.

?In sum, the economy is responding to the continued deepening in macroeconomic stability, with a surge in credit to the private sector and a high pace of budgetary spending early in the new budget cycle providing stimulus. Strong export growth, including non-traditional exports and higher private transfers continue to be a source of resilience. This is against the backdrop of high and volatile international oil prices, a major source of downside risk in the outlook,? stressed Dr Acquah.