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IMF predicts UK economic bounce-back this year to match resurgent US

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The International Monetary Fund sees Britain growing in 2020 at the joint-strongest pace of the G7 group of leading industrialised nations – after a contraction last year that was the worst among them.

Britain’s economy will grow faster than any major economy in Europe as it rebounds from the COVID-19 recession and emerges from lockdown, the International Monetary Fund (IMF) has predicted.

In the latest update to its World Economic Outlook – its periodical look at the state of the global economy – the IMF forecast that the UK economy would grow by 7% this year, the strongest year for economic growth since comparable records began following the Second World War.

The UK’s forecast growth rate would represent the joint-strongest rate in the group of seven leading industrialised nations alongside the US, which is also expected to expand by 7%.

The UK growth rate this year is stronger than Germany (3.6%), France (5.8%) and Italy (4.9%), though the UK economy contracted more than those other countries in 2020.

The IMF’s updated forecasts also anticipate the UK growing by 4.8% next year, implying that the UK economy will regain its pre-COVID levels around the turn of the year.Advertisement

However, while the UK is expected to rebound quickly, it is not expected to regain all the lost potential growth sacrificed during the pandemic – something which is not true of the US, which the IMF expects to be stronger, on a GDP basis, following the pandemic than was anticipated before it struck.

The IMF said that the main fault line in the global economy in the coming years would be between those countries with high vaccination rates and those mostly emerging economies with lower levels of immunisations.

Its chief economist, Gita Gopinath, said: “We estimate the pandemic has reduced per capita incomes in advanced economies by 2.8%, relative to pre-pandemic trends over 2020-2022, compared with an annual per capita loss of 6.3% a year for emerging market and developing economies (excluding China).”

Considering the likely impact of the Delta variant of COVID, the IMF said: “In countries with high vaccination coverage, such as the United Kingdom and Canada, the impact would be mild; meanwhile countries lagging in vaccination, such as India and Indonesia, would suffer the most among G20 economies.”

In spite of growing disquiet about rising prices of goods and services around much of the developed world, the Fund said it expected high inflation levels to abate in the coming years, saying that many of the price rises reflected temporary factors.

However, it added that this was “subject to significant uncertainty given the uncharted nature of this recovery”.

“More persistent supply disruptions and sharply rising housing prices are some of the factors that could lead to persistently high inflation,” the IMF said.

“Further, inflation is expected to remain elevated into 2022 in some emerging market and developing economies, related in part to continued food price pressures and currency depreciations – creating yet another divide.”

Chancellor Rishi Sunak said of the Fund’s findings: “There are positive signs that our economy is rebounding faster than initially expected, with the IMF forecasting the UK to have the joint highest growth rate in 2021 among the G7 economies.

“That said, we still face challenges ahead as a result of the impact of the pandemic, which is why we remain focused on protecting and creating as many jobs as possible through our Plan for Jobs.”

Journalist and science writer for NewsAfrica24, the Atlantic, New Scientist, Aeon, Men’s Health, and many others. Author of The Intelligence Mafias, published by Stoughton (UK)/WW Norton (USA) and translated into six languages.

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Government urged to build and protect crude palm oil industry

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Chief Commercial Officer of the Ghana Oil Palm Development Company, Gangadhar Shetty, has urged government to come up with policies that will build the local crude palm oil industry’s capacity, as doing so will make the country become self-sufficient and an exporter of refined palm oil products.

He said the industry is happy government has reversed the 50 percent benchmark policy that brought it to near-collapse. However, he said, the discussion should now be focused on policies which will make the industry robust enough to produce sufficient amounts to satisfy local demand and export the excess, as this will end imports of refined palm oil products.

“We need to understand that the benchmark policy is not good for the manufacturing industry. The same way the refineries are looking at benchmark values as a threat to them, they are also a threat to crude palm oil manufacturers.

“So I would say the attention should be given more to crude palm oil production, because at this moment Ghana has a shortage of crude palm oil but we have adequate installed capacity for refineries. The main focus should be how to build and improve capacity of local crude palm oil manufacturers to become more productive.

“If we increase crude palm oil production we will not need to import refined oil, because it is from the crude oil that we get refined oil,” he said in an interview with the B&FT.

Mr. Shetty further stated that focusing on building the crude oil palm industry’s capacity will also create massive employment opportunities and make the currency stable; adding that if such help is not given to the sector, local refineries cannot produce to their maximum – and this will encourage imports of refined vegetable oils, thereby creating unfavourable competition and weakening the local currency.

“Refineries can be put up in just six months and will be ready for production. But if you want to produce 450,000 tonnes of crude oil you need 120,000 to 150,000 hectares of plantation, and that size of plantation can create direct and indirect employment for more than 600,000 people.

“If you look at the international price of crude palm oil, there is just about a US$70 to US$80 difference between the refined oil. So if you are producing the crude, you only need to add small value and you will stop imports of refined oil. It has the advantage of import substitution, and will save us a lot of FX while creating employment – especially for the rural folk,” he said.

He added that government must emulate the example of Nigeria, where its government has put in deliberate policies to protect and grow the oil palm industry by supporting manufacturers with soft-loans and slapping high duties on imported crude palm oil.

“Let’s try to compare ourselves to Nigeria. Nigeria is trying to give single-digit interest loans to the oil palm sector. Aside from that, Nigeria regulates the crude palm oil sector. You cannot just import crude palm oil; you need approval of the central bank of Nigeria, and they will not have access to forex from the central bank. They have to get it from the open market. So this means government is trying to give some level of protection to the sector.

“And if you look at duty on imported crude palm oil in Nigeria, it is 35 percent; but here in Ghana, it is 5 percent duty. So, it is important that the benchmark be removed and duty on imported crude increased,” he said.

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Over GH¢200,000 lost daily – Toll collectors petition Parliament to reverse ban

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Several toll workers across the country on Tuesday, November 30, 2021, staged a demonstration protesting against the decision of the government to cease the collection of tolls.

The aggrieved workers stated that the decision has rendered them jobless, a situation that is affecting them and their dependents.

To them, the directive by the Minister of Roads and Highways, Kwasi Amoako-Atta was terrible.

The Minister who came under fire issued a directive instruction that the collection of road and bridge tolls at all locations nationwide should be halted effective from 12am on Thursday, November 18, 2021.

His directive came after the Minister presented the budget and disclosed that the collection of tolls would be scrapped.

But the aggrieved workers are not happy and want the government to reconsider the decision.

They marched to parliament and presented a petition to the legislative body.

“They promised to reassign us to other jobs. But we don’t trust them on that. If there were jobs available, they would have given us new jobs. The Minister is a liar and we are disappointed in him, one of the workers said.

Another alleged that they have not been paid over the past four months.

The Secretary of the Ghana toll workers group, Edward Duncan, presented a petition to Parliament on behalf of the group.

The petition was received by the Deputy Majority Chief Whip, Habib Iddrisu, and Deputy Minority Chief Whip Ahmed Ibrahim.

The two leaders said the petition had come at a time parliament was still considering the budget statement.

They assured them their concerns would be addressed.

Meanwhile, the leader of the workers, Mr. Ernest Antwi speaking on Nyankonton Mu Nsem said the work of toll workers generated a lot money for the country.

He said Ghana is losing several millions of Ghana cedis.

He said their work generates more than GH¢200,000 daily and the directive from the Minister has deprived Ghana of some revenue.

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1.75% E-levy: Government in talks with telcos – Ken Ofori-Atta

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Ken Ofori-Atta introduced 1.75% e-levy

Govt fees and charges was also increased by 15%

Ken Ofori-Atta says govt is engaging telcos on the new levy

During the presentation of the 2022 budget dubbed ‘Agyenkwa budget’, the Finance Minister, Ken Ofori-Atta introduced a new 1.75% levy on all electronic transactions such as Mobile money transactions, remittances and other electronic transactions.

Fees and charges of government services have also been increased by 15%.

Ofori-Atta in his budget presentation to Parliament explained, “It is becoming clear there exists an enormous potential to increase tax revenues by bringing into the tax bracket, transactions that could be best defined as being undertaken in the informal economy.

“As such government is charging an applicable rate of 1.75% on all electronic transactions covering mobile money payments, bank transfers, merchant payments, and inward remittances, which shall be borne by the sender except inward remittances, which will be borne by the recipient.”

“To safeguard efforts being made to enhance financial inclusion and protect the vulnerable, all transactions that add up to GH¢100 or less per day, which is approximately ¢3000 per month, will be exempt from this levy,” Ofori-Atta revealed.

But speaking to Parliamentarians on Tuesday, November 30, during the approval of the budget after it was rejected by the House on Friday, November 26, the Finance Minister indicated that the government of Ghana is having discussions with the various telecommunications companies over the 1.75% proposed E-levy.

“We have considered the issues of the 1.75% e-levy in which we are in discussions with the telcos and to scale back to moderate their impact so that in the end, the impact on the citizenry will be manageable,” Ken Ofori-Atta told the MPs.

“We have 11million people who are youth and we have in this budget, introduced the largest ever youth programme of GHC10 billion to ensure that the entrepreneurial nation that we seek will be achieved and the issues of the indecency of jobs and dignity of our youth working will be things of the part,” he added.

The Finance Minister’s statement was in response to some concerns raised by the Minority caucus over the levy.

The Minority in a statement asked the government to “suspend the e-levy and properly engage stakeholders to agree on a reasonable policy.

“The policy is not progressive, not pro-poor, and does not support the much-touted digitalisation agenda and cash-lite economy that we all yearn for.”

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