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Businesses in Ghana say they have great confidence in the Ghanaian economy, its ability to grow, and recover from the doldrums.

The Bank of Ghana (BoG) in its latest consumer and business confidence surveys conducted in August reflects improved sentiments from the business community on the economy.

According to the Bank, the sentiments about the Ghanaian economy were on account of positive views expressed by businesses and consumers about exchange rate and price movements, as well as favorable prospects for industry and overall economic growth.

This was a conclusion of the 78th Monetary Policy Committee meeting that reviews development in the Ghanaian economy for the last three months.

Fitch affirms Ghana’s improving macroeconomic stability
According to Ratings Agency, Fitch, Ghana's ratings reflect the its medium-term growth potential and improving macroeconomic stability, which is supported by the authorities' commitment to putting public finances on a sustainable path.

It indicated that “this is balanced against high government debt, existing weaknesses in public finances, and low GDP per capita.”
Fiscal outturns from 1H17 indicate that government's fiscal consolidation efforts remain on track. Revenues have underperformed their mid-year budget targets, but reported expenditure has been lower as well.

Fitch said it expected the general government deficit on a cash basis to narrow to 7.3 per cent of GDP, down from 9.3 per cent in 2016.
Fitch's forecast is indeed higher than government's forecast of 6.3per cent, reflecting the view that tax cuts included in the budget to spur economic activity will keep revenues lower than envisaged.
Moreover the risk of off-budget spending and the accumulation of new arrears remains a risk.

AGI reports high business confidence in economy

According to the Association of Ghana Industries (AGI) Business Barometer for the second quarter of 2017, business confidence, recorded its fourth consecutive rise, one of the highest since 2012.
The BB revealed that 70 per cent of businesses surveyed expected business confidence to improve.

This was higher compared to the about 57% recorded in the previous quarter.

The report added that government made good on its promise to reduce the tax burden on businesses during the period under review. Captains of Industry affirmed that the tax reliefs announced by Government in the first quarter and subsequently implemented in quarter two are beginning to impact on the cost of doing business.

On the monetary sector, the MPC report said Broad money supply (M2+), representing total liquidity in the economy increased, driven largely by strong growth in the net foreign assets of Bank of Ghana. Comparatively, broad money supply recorded an annual growth of 28.7 percent in July 2017 against 25.9 percent a year ago.
On the other hand, total outstanding credit to the private sector and public institutions grew by 14.4 percent in July 2017 compared with 17.1 percent growth in the same period last year. Of the total credit flow, the proportion of private sector was 85.1 percent.

The report further added that there are initial signs of a gradual pick up in private sector credit conditions.

The latest credit conditions survey conducted in August 2017 showed easing of credit stance on loans to enterprises and households, alongside increased demand for credit by enterprises. The ease in credit conditions is broadly in line with the observed gradual decline in average lending rates over the period.

The Central Bank added that broadly, the financial sector remains liquid and solvent although non-performing loans and concentration risks remain high.

In July, 2017, BoG in its review of the Ghanaian economy said its leading indicator of growth, the Composite Index of Economic Activity (CIEA), suggests some pickup in economic activity in the first five months of 2017.

Additionally, the latest business and consumer confidence surveys, conducted in June, also broadly reflected positive sentiments in the direction of the economy. While businesses were optimistic about achieving their expectations on sales and profit, consumer sentiments were largely driven by improvement in household incomes and purchases of durables.