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KEYNOTE ADDRESS AT THE

2014 GHANA ECONOMIC FORUM
Building a Prosperous Economy: Time for New Solutions

By

DOLAPO OGUNDIMU
MANAGING DIRECTOR
ACCESS BANK (GHANA) LIMITED

MARCH 11, 2014

Speech delivered by Dolapo Ogundimu, Managing Director, Access Bank (Ghana) at the 2014 Ghana Economic Forum
held on Tuesday March 11, 2014 at the Movenpick Ambassador Hotel, Accra
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Your Excellency President John Mahama

Mr. P.V Obeng, Chair of the National Development Planning Commission
Dr. Paul Acquah, Immediate Past Governor, Bank of Ghana
Mr. Kwame Pianim, Renowned Economic and Investment Consultant
Mrs. Edith Danquah, Executive Director, Business & Financial Times
Colleague CEOs
Distinguished facilitators
Ladies and gentlemen

Good morning.
Kindly permit me to once again welcome you to this important forum which has over the past 3
years created a platform for key stakeholders to address critical issues of national concern.

I believe that the issues we would deliberate upon today would greatly enrich our ability to
sustain Ghanas economic strides and more importantly, provide that needed impetus to place
this nation at the forefront of global competition.

Your Excellencies, about seven years ago (2007) and a few months prior to the eruption of the
global economic crisis, Ghana took a bold step to re-denominate its local currency the cedi.
At the time, the cedi was being exchanged at 9,100 to 1US Dollar.

We can comfortably say that the slashing of the four zeroes off the cedi, increased confidence
in the economy and provided other benefits including;

Beating down hyper inflation. Since the beginning of the year 2000, the old cedi had lost
about 81% of its value against the US Dollar.

Secondly, the economy was protected from currency substitution, since the re-
dominated cedi was pegged at 91 pesewas to 1 US Dollar.

Speech delivered by Dolapo Ogundimu, Managing Director, Access Bank (Ghana) at the 2014 Ghana Economic Forum
held on Tuesday March 11, 2014 at the Movenpick Ambassador Hotel, Accra
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And the new Cedis portability made doing business convenient and less costly so we
didnt have to carry sack loads of cash for business transactions.

In the immediate aftermath of the redenomination, however, three notable events occurred;

1. The global financial crisis set in 2008 battering the US and European economies.
Consequently investors in the advanced economies had no choice but turn to
emerging economies, many of which were in African and Latin America, and Ghana
was no exception.
2. The second notable thing was Ghanas oil discovery. A burgeoning oil industry took
off and the country had a lot of optimism, thus attracting foreign investors.

3. As a result, Ghanas Gross Domestic Product growth rate jumped from about 6.1%
in 2007 to 14.4% in 2011, although productive and manufacturing sectors saw little
growth. The rebasing of Ghanas economy in 2010 also qualified the country to
attain middle income status.

The impact of these positive developments gave confidence to the Ghanaian economy and
strengthened the Ghana Cedi.

With the recent resurgence of Western economies, emerging markets such as ours are
however beginning to discover the real value of their currencies.

As we may be aware, the US Federal Reserve last year commenced "tapering" a

monetary policy which is aimed at reducing the amount of stimulus for growth in the US
economy.

As if this wasnt enough, foreign investors who hitherto were willing to take the risks
associated with investing in emerging markets, are returning to the safety of the West,
making the flow of funds on the international market, more and more scarce for
emerging markets like ours.

Speech delivered by Dolapo Ogundimu, Managing Director, Access Bank (Ghana) at the 2014 Ghana Economic Forum
held on Tuesday March 11, 2014 at the Movenpick Ambassador Hotel, Accra
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A recent report from one of the Worlds rating agencies estimates that emerging market
economies could suffer a cumulative GDP growth loss of between 2.8% and 3.1%
between 2013 and 2016, as a result of this development.

With the benefit of hindsight, we can safely conclude today that the underlying growth factors
for most emerging markets during that period were artificial or at best temporary. Emerging
economies such as Ghana, Nigeria, Argentina, Mexico, India and many others who benefited
largely from the global financial crisis are today feeling the effects and real impact of the
resurging economies in Europe and the USA.

In some countries, exchange rates have been hit hard by changes in the direction of capital
inflows.

Mr. Chairman, I hold the view that the difficulties mentioned, are not here to stay. They are
transient and are bound to settle at some point.I believe the effective implementation,
supervision and actualisation of both short and medium term measures will put the economy
back on track.

A few pointers towards strengthening the Ghana Cedi are:

RECOMMENDATIONS

1. Outright payment of import duties: Within the last four years alone (from 2009-2012),
Ghanas import bill has more than doubled to about GHS14 billion from GHS 6.6 million.

Government must only encourage importers who can afford to pay duties on arrival of
their consignments. The era of bringing goods that are required for consumption
between 180 days to years time and kept in warehouses should be discouraged.

Speech delivered by Dolapo Ogundimu, Managing Director, Access Bank (Ghana) at the 2014 Ghana Economic Forum
held on Tuesday March 11, 2014 at the Movenpick Ambassador Hotel, Accra
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This will help to:

o Reduce Pressures on demand for foreign exchange to settle future liabilities of

the importer

o Eliminate the waiting period for revenue mobilization and ensure leakages in
Government revenue mobilization are eliminated.

o The manpower requirement by the Government to manage bonded warehouses

will reduce, allowing the private sector to handle warehousing arrangements.

2. Mop up excess Cedi cash in circulation through the application of various ratios or
instruments by the Bank of Ghana. For instance, the Cash Reserve Ration which has
stagnated at 9% over the years or the introduction of a Liquidity ratio as a means of
controlling money supply.

The Government can also through the Central Bank, mop up excess liquidity by
recalling Government funds held by commercial banks to reduce money supply.

These and many more options are available to the relevant authorities to help
strengthen the value of the Cedi in the short term.

3. Value addition of prime exports with less reliance on imported goods:

Last year, global news networks reported that De Beers, the world's leading diamond
company with unrivalled expertise in the exploration, mining and marketing of diamonds
had relocated to Botswana.

This was the result of years of long campaigns for Botswanas diamonds to be
processed, sorted, marketed and sold from the country.

Speech delivered by Dolapo Ogundimu, Managing Director, Access Bank (Ghana) at the 2014 Ghana Economic Forum
held on Tuesday March 11, 2014 at the Movenpick Ambassador Hotel, Accra
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Today, there is a vibrant diamond sector which is creating value added jobs and has
transformed Botswana into a middle-income nation. Annual sales of diamonds are now
pegged in the region of $6billion.

As one of the leading exporters of commodities such as gold and cocoa, Ghana can
learn to transform its economy, by adding value to these commodities before export.
Apart from building a vibrant SME base it would boost foreign exchange earning
capacity of the country.

4. Ghana stands a great chance of being the best tourism destination in Sub- Sahara
Africa raking in several million dollars because of its hospitable people, unique slave
forts and history, cultural diversity, natural environment and political stability among
other things.

As at 2007, the tourism industry in Ghana was the third highest foreign exchange
earner, contributing over $1.4 million and 6% to GDP. Though one of the promising
sectors in the economy, the growth rate of this industry has slowed in the last few years.

A lot more attention must be paid to this sector due to its enormous economic potential.

CONCLUDING REMARKS
Your Excellencies, Distinguished guests, to cut a long story short, it is time for us as a
people to look inwards.

As a nation we are spending more foreign exchange than we generate. This

situation now provides the best opportunity for Ghana to develop a Structural
Adjustment Plan to address this imbalance for the prosperity of our children and
future generations of Ghanaians.

Proactive interventions by our policy makers and other stakeholders would

definitely put the country on a firm economic footing.

Speech delivered by Dolapo Ogundimu, Managing Director, Access Bank (Ghana) at the 2014 Ghana Economic Forum
held on Tuesday March 11, 2014 at the Movenpick Ambassador Hotel, Accra
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It is therefore our collective responsibility to work together to find the right path out of our
numerous challenges.

I think that our presence here today and our own experience as business leaders show
that we all have an exciting opportunity to build on the growing momentum that will create
the desired conditions for sustainable growth of the Ghanaian economy.
I thank you for your attention.

Speech delivered by Dolapo Ogundimu, Managing Director, Access Bank (Ghana) at the 2014 Ghana Economic Forum
held on Tuesday March 11, 2014 at the Movenpick Ambassador Hotel, Accra