Good economic indicators yet to impact on investment - analysts

The financial sector saw improvements in economic indicators for most part of last year, but it is yet to have an impact, especially, on investments, Mr Daniel Ogbarmey Tetteh, Senior Vice President of Databank, has said.

Speaking in an interview with the GNA, Mr Tetteh said most investors shied away due to macro-economic instability, which he attributed to the combined effect of external shocks and the steady loss in the value of the cedi and the change in political environment.

"But, generally, we are quite happy with the present stable economic situation even though there has not been a direct impact or response on investment immediately," he said.

Mr Tetteh gave figures to support the improved indicators, saying, "These were possible because of the absence of pressure on the nation's foreign exchange resources."

Inflation, he said, dropped from 41 per cent to 23.7 per cent and interest rates on 91-day Treasury Bills also dropped significantly from 45 per cent to 28.94 per cent.

On the capital market, Mr Tetteh said volume of shares traded on the stock market increased by 61 per cent while the value of shares traded was up by 55 per cent. Market capitalisation increased by 94 billion cedis.

Mr Tetteh said, however, that the average yield on capital ended lower at 11 per cent compared to 16 per cent recorded at the end of year 2000.

He said this was the result of foreign investors' reaction to the unstable macro-economic fundamentals that persisted in the first quarter of 2001.

Mr Tetteh expressed the hope that the economic situation would improve this year to attract foreign investors onto the market.