Dzifa Amegashie, Head of Investor Relations at CAL Bank, has indicated that a lot of economic trends and indices, which are quite high, have negatively affected businesses in the country.

Speaking at CAL Bank’s second ‘Facts behind the figures’ presentation at the Ghana Stock Exchange yesterday in Accra, Mrs Amegashie said at 15.8 percent, for example, Ghana’s rate of inflation is very high.

“The 25.5 percent policy rate is still high. This is still a reflection of the tight monetary policy which the Bank of Ghana is pursuing. It’s still a high figure and we reported that throughout all the year.”

Cedi depreciation

Commenting on the local currency, which depreciated by 4.6 percent against the US dollar up to November this year, she emphasized: “Currently, everybody knows that the cedi has been plaqued by weakness against most of the foreign currencies probably since 2014. And the good news to report on that is that though there is deterioration, it’s slowing. The index before that was 15.5 of the previous year. So there is current depreciation but the rate has slowed.”

GDP

She said GDP growth at 2.5 percent was too low, adding that “overall, it has continued to decline since 2012 when there was a high of 9.3 percent. So relative to Ghana’s immediate history, that was a very low public figure.”

She also said Ghana’s total public debt at 67.4 percent was very high by any standards.

“Interbank rate of 25.5 percent is also a very high figure, so overall, the indices are difficult.”

Difficult business environment

Giving an overview of the country’s banking sector, Amegashie said a lot of managers were probably managing the most difficult year that they have experienced.

Declining profitability

“Overall, there is declining profitability across all the industry, across all players in the industry with very few exceptions. And that is a reflection of the general decline in the overall business activity. So if you look at most PNLs, you will see difficulties with both interest income and also non-interest income. And that’s generally related to what’s happening in the economy.

“Trade is down, loan too is down, and generally business activity is down. On the PNL side again, you will also see high and rising operating cost and that’s really coming from inflationary pressures.

On the balance sheet side, typically what you see across the industry, the big thing that everybody has been monitoring for this year, is assets quality. Assets quality has been severely challenged across the industry. General business activity is down. And average lending rate of 32.1 percent is very high.”