He said the key macroeconomic indicators coupled with a relative stable exchange rate regime would push the rate further down as the economy continues to sustain its growth.

Speaking to journalists after launching the 2016 Africa Investment Index (AII) report where Ghana ranked 18 out of 54 countries, Prof. Ncube said one of the drivers of inflation in the first place was public expenditure, adding that the deficit was also coming under control, something he said was a positive sign.

“There are signs of a steady cedi too. I will say that the physical conditions count, but also the exchange rate is part and will stabilise inflation and push it down,” he said.

Inflation which has been on the rise in the last three years started a downward trajectory from the beginning of the year. It stood at 13.3 per cent in January 2017 but slowed down to 12.1 per cent in June 2017.

Ghana is 18th best investment destination

The AII report has ranked Ghana as the 18th most attractive investment destination in Africa for 2016.

The country attracted a net foreign direct investment (FDI) of US$3.5 billion last year, according to the report produced by Quantum Global Research Lab.

The report which was launched on July 19 said macroeconomic challenges pushed the country downwards on the ranking after placing ninth in 2015.

While the economy continued to grow on a steady pace until 2013, the Gross Domestic Product (GDP) growth slowed down from seven per cent in 2013 to 3.6 per cent in 2016 due to structural challenges such as the ongoing fiscal deficits, pushing public debt to over 70 per cent of GDP and trapping the country in a cycle of debt service and borrowing.

The report also said the three-year power crisis and power rationing slowed down the private sector’s productivity and competitiveness. In addition, the significant external sector deficit and low world prices for the country’s gold, cocoa and oil export were major factors behind the economic slowdown.

According to the research, the financial sector in Ghana has undergone restructuring and transformation and the supervisory framework is relatively strong. Also, bank credit to the private sector has increased and capital markets are also developing.

On the continent, the AII report said the top five African investment destinations attracted an overall FDI of US$13.6bn. Botswana was ranked the most attractive economy for investments followed by Morocco, Egypt, South Africa and Zambia.

 Bright prospects

Prof. Ncube said the country needed to put in place prudent macroeconomic policies and fiscal discipline in terms of public finance management to sustain the economic recovery that was currently being witnessed.

He said last year, Ghana’s democratic attributes were as robust as its economic growth, and by improving policies and institutions, successive governments had been able to build an attractive business climate conducive to growth.

“These measures include reducing the number of days it takes to register a limited liability company and days spent on resolving commercial disputes in the courts. Furthermore, the election of a new government in 2016 has revitalised the drive for higher growth and infrastructure investment, all which augur well for investment opportunities in the country,” he added.

As a result, Ghana’s economy, he said, experienced strong and robust growth over the past decade, making its success a case worth emulating by its regional peers.
In 2016, industry was the main driver of overall growth with an annual average growth of about 13 per cent, followed by services with 8.4 per cent and agriculture with about eight per cent.