The United States and Ghanaian registered company Goldstar Air, the Wings of Ghana’s 24-hour worldwide operations, will help bring in foreign currency to reduce inflation in Ghana and introduce pragmatic solutions to create more well-paying job opportunities in the country, which will in turn help the country grow economically.
Goldstar Air’s 24-hour service innovations will help reduce the import burden on the country’s balance of trade and stabilize the cedi depreciation against other major currencies by building strong foreign exchange reserves to back the country’s high inflationary rate now and finally bring it down to a single-digit level.
The airline innovation business model will bring inflation down for economic stability and the much-needed relief to Ghanaians, this will ensure confidence in the local economy. The reality on the ground is that the standard of living is high and most Ghanaians are either unemployed or underemployed.
According to the World Bank’s Acting Country Manager in Ghana, Mrs Eunice Ackwerh, the burden of inflation and low growth in the country are negatively impacting the vulnerable and pushing more Ghanaians into poverty.
The World Bank estimates that about 36 percent of Ghanaians are poor and that more than a quarter of the people live on less than $2.15 per day. Mrs Ackwerh further stated that the poor were the most vulnerable, hence there was the need for the country to implement policies to ensure that severe poverty conditions were addressed.
Goldstar Air’s 24-hour service will be a valuable contributor to Ghana’s economic prosperity, which is geared towards reducing the poverty rate as indicated by the World Bank Acting Country Manager Ghana.
The airline will provide a rapid worldwide transportation network, making it essential for businesses to generate economic growth and facilitate international trade and tourism to the country. Air transport provides vital economic benefits and is a highly efficient user of resources and infrastructure. Aviation transports over 2 billion passengers annually 40% of inter-regional exports of goods by value and over 40% of international tourists travel by air.
The latest inflation data from the Ghana Statistical Service show that consumer inflation increased to 21.5 percent in September 2024, up from 20.4 percent recorded in August 2024. Inflation has pushed several individuals in the country below the poverty line, with only a few above it. The rise in inflation was attributed to the increase in food inflation as it surged from 19.1% in August to 22.1% in September.
The year-on-year inflation rate for goods and services at ex-factory prices surged to 33.2% in August 2024, up from 29.1% in July. The producer price inflation (PPI) in Ghana’s industry sector, excluding construction, saw a sharp increase from 37.9% in July to 44.2% in August. Meanwhile, inflation in the services sector rose from 12.6% in July to 14.0% in August, reflecting rising costs in various service-based industries.
The Mining and Quarrying sub-sector saw inflation soar, with a 54.2% rate, well above the national average of 33.2%. However, the Water Supply, Sewerage, and Waste Management sector recorded the lowest inflation at just 3.2%. On the other hand, the mining of metal ores experienced a sharp rise in inflation, jumping to 77.7% in August from 54.2% the previous month. Mining support services reported an inflation rate of 42.8%.
Goldstar Air believes that a much lower single-digit inflation rate can be achieved by the airline’s contribution and a desire to boost consumer spending. This would, in turn, drive production and sustained economic growth and have positive repercussions on employment creation, as there is evidence of a strong relationship between a stable economic environment and job creation.
However when the basket of products to determine inflation contains rotten products or inferior quality you get lower inflation rates with the rotten economy so one must be very careful when handling the inflation calculation to determine the true value of inflation.
According to the International Monetary Fund (IMF), a one percent decrease in the unemployment rate results in a 1.5 percent increase in Gross Domestic Product (GDP) growth, whereas the World Bank notes that a ten percent increase in business confidence leads to a two percent increase in employment growth.
Ghana’s debt stock reached GHS 761.2 billion, representing 75.7 percent of the country’s Gross Domestic Product (GDP), by July 2024. Compared to last year’s period, the debt stock was at GHS 587.7 billion, representing 70.3 percent of GDP. This information was contained in the latest summary of Economic and Financial Data of the Bank of Ghana released in September 2024.
The data showed that the external component of the debt hit US$31.6 billion from US$30 billion in the same period last year, representing 46.1 percent of GDP. The domestic component of the debt was at GHS 290.9 billion representing 28.5 percent of the GDP. Divided by the country’s current population, every Ghanaian is estimated to owe GHS 22,076 as of the end of July 2024.
Goldstar Air, Ghana’s economic tool has the potential to unlock the current economic crisis and reduce the high inflationary rate facing the country. The airline is well-positioned to create over one million well-paying sustainable job opportunities for Ghanaians. Giving confidence in the economy by employers is the key driver of business expansion and sustainable job growth.
The labor force gains more when human capital, including skills, is added to general knowledge, producers then use this as the tools to make more goods and provide more services. When people trade their money for goods and services, a mutually beneficial exchange occurs, and when it is multiplied across the entire economy, it increases growth and well-being.
The production level can be measured by Gross Domestic Product (GDP), the total dollar value of the goods and services produced yearly. Therefore, economic growth refers to an increase in GDP, which, in turn, leads to job creation and more employment.
According to the Chairman and Chief Executive Officer of Goldstar Air, Eric Bannerman, Ghana’s aviation and tourism industry has the potential to become a significant economic driver, which can overtake the 54% of the country’s gold foreign exchange earnings and be the leading foreign exchange earner in Ghana. The country has huge opportunities and stands to be a leading force in aviation and tourism in Africa, with Goldstar Air’s 24-hour service. The airline innovations, collaboration, and know-how of the industry will make Ghana’s income increase more than gold.
The air transport industry contributes around 880 billion US dollars a year to world Gross Domestic Product (GDP), taking into account direct, indirect, and induced impacts, equivalent to 2.4% of global GDP. Its direct impact on GDP is 330 billion US dollars.
Goldstar Air’s discovery of new processes, tools, and devices will lead to a huge jump in employment because innovation is essential to generating jobs. When entrepreneurship results in discoveries, the whole economy benefits. When the labor force gains more human capital, including skills and general knowledge, producers gain the tools to make more goods and provide more services. When people trade their money for goods and services, a mutually beneficial exchange occurs, and when multiplied across the entire economy, it increases growth and well-being.
The Annual Household Income and Expenditure Survey report of Ghana Statistical Service indicated that the overall unemployment rate stood at 14.7 percent, with the urban labor market recording 18.3 percent.
The Ghana Statistical Service also noted that inflation on locally produced items and imported items increased. Subsequently, the figure for imported items increased to 17.0 percent from 16.1 percent in August, whereas locally produced items recorded an inflation of 23.4 percent from 22.2 percent in August 2024.
Restaurants and accommodation services recorded 27.9 percent, while alcoholic beverages, tobacco, and narcotics recorded 27.6 percent. Housing, water, electricity, gas, and other fuels recorded 26.4 percent. Education services had 23.7 percent, while health recorded 22.3 percent, and food and nonalcoholic beverages also recorded 22.1 percent.
According to Bloomberg, Ghana’s local currency continues to experience persistent depreciation against major trading currencies such as the US dollar. The cedi has been under pressure throughout the year and will further worsen the Ghanaian economy’s woes amidst the businesses’ pricing behavior.
The instability of Ghana’s local currency has also forced real estate developers and contractors to price their properties in dollars. The increasing cost of inputs, particularly cement, puts undue pressure on developers to consistently peg their properties against the daily exchange rate.
The United States Bureau of Labor Statistics indicates that a stable economy creates an average of 150,000 jobs monthly. A strong and resilient economy leads to increased job opportunities while unstable economies occasion significant job losses and higher unemployment rates.
Mr. Bannerman emphasized the seven principles of microeconomics fundamental concepts, such as the laws of demand and supply. Marginal thinking, incentives, opportunity cost, trade-offs, and efficiency will form the basis of Goldstar Air’s behavior. Goldstar Air will provide quality life by broadening people’s leisure and cultural experience. The airline will also provide a wide choice of holiday destinations around the world and an affordable means to visit distant friends and relatives.
Goldstar Air’s 24-hour service with a payday every other week (Biweekly) will eliminate corruption within the organization and the airline will make anti-corruption part of the company culture and operations, including the value chain. The airline will be bringing most of the sales all over the world to the central bank before going ahead with any payment and the rest will be a backup for the country’s reserves and can help us avoid going back to the International Monetary Fund (IMF) in future. An example of what David Kotei Poison loaned to the Ghanaian government of General Ignatius Kutu Acheampong in 1976 after his second title defense boxing bout against Japanese Shig Fukuyama, for the purchase of some commodities for the state to support the economy.
The airline’s 24-hour service will develop goals, strategies, and policies and get buy-in from colleagues by clearly showing the importance of these policies. The airline knows the risks involved in aviation and is prepared for them and will recognize opportunities to improve the business by improving compliance. The airline will consistently communicate the progress to stakeholders and always strive for continuous improvement.
Goldstar Air will help improve the living standards of Ghanaians alleviate poverty and provide transportation means in remote areas, thus promoting social inclusion. The airline network will facilitate the delivery of emergency and humanitarian aid relief anywhere on earth and will ensure the swift delivery of medical supplies and organs for transplantation. The air transport industry is typically concentrated in more developed economies, where it makes a greater than average contribution to the global economy simply because the Gross Domestic Product (GDP) per worker is generally higher.
Economic developers consider airlines very vital to generating local and economic growth. Ghana’s economy is currently facing challenges, according to major credit rating agencies, such as Moody has upgraded Ghana’s rating to Caa2 with a stable outlook, citing extensive debt treatment that has significantly alleviated the government’s financial burdens. However, Fitch Ratings has downgraded Ghana’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘CCC’ from B-2, while Standard & Poor’s (S&P) also has downgraded Ghana’s foreign and local currency credit ratings to ‘CCC+/C’ with a negative outlook. The downgrades are attributed to Ghana’s High debt levels.
The World Bank’s October 2024 Africa Pulse Report has revealed that the cedi and three other currencies are worst performing in Sub-Saharan Africa (SSA) in 2024. According to the report, the cedi has lost about 24% of its value against the US dollar, making it the fourth weakest currency in SSA.
Ghana’s debt-to-GDP ratio is high, making it challenging for the country to manage its debt, and faces liquidity challenges, making it difficult to meet its financial obligations. Ghana’s fiscal deficit is a concern, with the country struggling to balance its budget and the economy is also facing external pressures, including a strong US dollar and global economic uncertainty.
However, it’s worth noting that Ghana’s economy has shown strong growth prospects, with the IMF and other organizations praising the country’s management of the economy during the pandemic. The government has also implemented fiscal consolidation reforms aimed at reducing the deficit and promoting economic growth.
The Bank of Ghana increased interest rates to combat inflation, while the World Bank and International Monetary Fund (IMF) also have provided support to Ghana through various programs, including a $3 billion Extended Credit Facility program yet the cost of living is still very high let alone saving to own a decent house.
There is a need for government to adopt prudent fiscal policy management frameworks to control spending and ensure fiscal consolidation. Such measures are crucial for stimulating sustained economic growth at a minimum annual rate of five percent.
Ghana at this time around needs Goldstar Air with its numerous innovations to come in and turn the economy around with the Ho Industrial Zone viability which will be an economic generator for the Volta Region and Ghana. Hajj flights to and from the Kingdom of Saudi Arabia will open more doors to Volta and Upper West regional capitals, as connecting rural and smaller communities to global commerce, helps businesses expand, and attracts new companies, to the area.
Tamale will serve as a pivotal hub for our airline’s maintenance, cargo village, and aviation training and catering school, and plans are underway to operate international passenger flights to and from the Sahel region and Hajj flights to and from the Kingdom of Saudi Arabia.
Goldstar Air will initially operate flights from Kumasi to Rome, Madrid, Hamburg, London, Dusseldorf, and Milan and Hajj flights to and from the Kingdom of Saudi Arabia.
Also, flights from Accra shall include destinations such as Washington, Dubai, Lagos, Toronto, Monrovia, Conakry, Abidjan, Guangzhou, Dakar, Banjul, Rhode Island, London, and Freetown and pending cities such as Miami-Florida, Atlanta-Georgia, Chicago-Illinois, Glasgow-Scotland, Houston-Texas and many more.
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