Due to prudent micro and
macro-economic policies, the past five (5) years has seen favorable
and sustained macro-economic stability. Year on year inflation average
16.2% and now stands at 10.2%; and interest rate average 20-22%.
Exchange rate depreciation averages 7%, and GDP growth rate averages
5.4% and now stands at 6% with GPD per capita rising to $400.
Total external debt has reduced from $6.585 billion in 2003 to $2.1
billion by June 2006 as a result of a multilateral debt cancellation
of the country’s debt as a consequence of successfully reaching
the HIPC completion point. Some of these funds have already been channeled
into the rehabilitation and expansion of roads from the productive centers
to the cities. Most major roads that link the country to its neighbors
have also been constructed to facilitate transit trade. Others are currently
under construction while a few are yet to begin (Ghana – Burkina
Faso, and Mali).
The Central Bank base rate has dropped to 15%, enabling banks to give
more affordable credit to business operators. With these and other prudent
financial market regulations, not only has the size of the banking sector
increased, but the range of products most of which favour businesses
especially SMEs has also increased. Most of the banks now have special
windows for SMEs.
To make business
finance much more available to businesses, the government has created,
and also facilitated the creation of certain financial institutions.
This includes the Venture Capital Trust fund, which currently is
resourced to the tune of US$22m, and the Micro-Credit & Small
Loans Fund, capitalized at US$50m.
Information and Telecommunications Technology, which
is key to business transactions as the world becomes more globalized,
has seen a marked growth in the country, and has risen from 4% to
15% in the last five years. Currently, there are five (5) telecommunication
companies operating in the country, the majority market shareholder
(58.6%) being a mobile network operator. Internet use is on the
increase and telephone cheaper, facilitating electronic flow of
business transactions.
The highly stabilized political climate reflect the
will of both the government and the people to create a congenial
atmosphere for businesses to thrive. There was a successful transition
of political power from one political party to another in 2000.
The people renewed the mandate of this Party in 2004, and one can
confidently say that multi-party democracy is really gaining roots.
This government has declared a golden age of business with the private
sector as the engine of growth. To show its commitment to this assertion
it introduced a lot of incentives for businesses in its 2006 Budget
statement and Economic Policy.
Due to prudent micro and
macro-economic policies, the past five (5) years has seen favorable
and sustained macro-economic stability. Year on year inflation average
16.2% and now stands at 10.2%; and interest rate average 20-22%.
Exchange rate depreciation averages 7%, and GDP growth rate averages
5.4% and now stands at 6% with GPD per capita rising to $400.
