Speaking to journalists at the end of a two-day working visit to Ghana, Mr Paul said however, that for the manufacturing sector to blossom, stable power is required and there is the urgent need to expand power capacity.
The manufacturing sector contributes less than 10 per cent to the GDP and grew by 1.2 per cent last year.
Jonathan Paul’s interview discussed the global financial markets, inflation, the performance of the Cedi against the dollar and the International Monetary Fund’s programme with Ghana.
On the performance of the Cedi against the dollar, Mr Paul said the relative stability of the cedi in the last six months had been very important for the economy, adding that an understanding of the direction of the dollar in the next few months would be very crucial.
“What is happening this year is that the US dollar is down 8.5 per cent against a basket of currencies since the start of the year and we believe that we have seen the top of the US dollar,” he said.
He said although there would be a bit of volatility, it would not go down to the levels in the past and this would allow central banks to get back the control of their own monetary policy.
“For Ghana, that is really a very important thing if we have seen the top of the dollar and a stable local currency, that means the central bank has room for monetary policy control and hold its own destiny, and this could result in the lowering of interest rates.”
On Inflation, Mr Paul said it would continue to be a challenge in the short-term but it would start to respond to the relatively tight monetary policy that the central bank was pursuing and once that was achieved the bank could then lower interest rates.
“The lowering of interest rates is extremely important for the local economy and at the right time the central bank will reduce interest rates to stimulate the economy,” he said.
Turning to Ghana’s three-year programme with the International Monetary Fund, Mr Paul said the markets viewed the involvement with the IMF as a very positive step and there were indications that the engagement with the IMF is leading to improvement in economic fundamentals.
He expressed the hope that if the Government remains committed to the current tight spending regime despite the election pressures, it could impact positively on the economy in the future.
He said a major concern was the fiscal deficit but the IMF’s policy was to help bring down the debt to GDP ratio and also the cost of the debt.