The five men economy On the brink · 2015-04-29 · Ghanaian economy On the brink OF DUTY The five men economy USA.....$5.00 UNITED KINGDOM ... Ghana as compiled by Esoko. Energy:

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JUNE 2014 / ISSUE 037 GH¢10.00

A M O N T H L Y M A G A Z I N E

Grave times for the Ghanaian economy

On the brink

MEN OF DUTYThe five men to fix the economy

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General ManagerJosiah [email protected]

EditorEric Kwame [email protected]

Deputy EditorS. Kwame Appiah

ColumnistsJerry HalmYvonne MacCarthyJulius Caesar-Tokoli

ContributorsMartin Luther KingOppong BaahAnthony SedzroGeorgina AdjeiAyuureyisiya Kapini Atafori

Art-Graphics Manager, DesignBenjamin Tetteh

Design & ProductionDaniel Sackey Yobo

Circulation & SubscriptionJeffrey Dapaah

Editorial CommitteeProf. Paul N. BuatsiProf. Kwame AddoMs. Johanna AwotwiMr. Gaddy LaryeaMr. Ray de BonoMr. Nana Robert MensahMr. Frederick AlipuiMs. Dede-Esi Amanor-WilksMs. Nana Spio-Garbrah

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JUNE 2014 / ISSUE 037

Front Cover: This issue focuses on the challenges the Ghanaian economy faces.

Briefs

trends in business and finance in Ghana and the African continent from the past month.

Banking and FinanceTwenty-seven banks and counting - that is where we are at the moment. Ghana’s banking sector has been on a tremendous growth pattern since its liberalization some two decades ago. But with increased risks in the financial sector across the globe, should Ghana not be looking at consolidation to strengthen the sector instead of expansion in numbers? Anthony Sedzro analyses the pros and cons of this question.

Cover

from the norm. We have decided to look at the nation’s economic challenges and the solutions experts and those with the technical know-

how have pro�ered. Under such circumstances as we find ourselves, the likelihood of taking in all sorts of suggestions including those which might not be relevant is high - that is why we have sieved the suggestions and pieces of advice, bringing you only those that matter to the debate. Government is doing its part and we agree the National Economic Forum was a necessary first step, but can we go beyond that?

Special Feature - Malta

In FocusIn this issue, we throw our spotlight on the technocrats calling the shots in Ghana’s economy. It might interest you to find out who made the list especially as the nation tries to find ways out of its current economic di�culties.

EconomyGhana’s economy in 2010 moved a notch higher from a developing economy to a lower middle income one. With this new status has come the drying up of concessionary loans from the country’s development partners. Martin Luther-King takes a look at how the reduced access to such facilities is a�ecting the nation’s development drive.

Banking & Finance: Page 15

JUNE 2014 GHANA BUSINESS & FINANCE 3

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insurance’ to the growth of the insurance industry in Ghana.

Conferences and eventsThe conferences and events that you will need to keep in mind.

TourismGhana aims to earn over GHc 8 billion from tourism by 2027. Does the launch of a new 15-year plan herald a change in the government policy needed to make this happen? What can the various actors do to achieve this target.

Global OutlookA look at the prospects of the global economy from the lenses of BBVA, one of the leading research firms in the world.

Executive SelectionJob openings from corporate Ghana

ManagementJulius Ceasar-Tokoli does an interesting piece in his column touching on the need for Ghana to have clearly-stated economic theories and policies which will guide it in its development path.

On his part, J.N Halm, as usual, offers one of his innovative ideas on how best to deal with competition in the corporate world. He offers what could best be described as the bitter

but necessary pill for growth in business between competing entities - collaboration.

Then to top it all in our Management section, Yvonne MacCarthy writes a delightful and a must-read piece on customer care. This time round, she looks at how business owners can check to ensure that their customer care representatives are not the reason behind you losing your customers.

Tool KitIn the current fast-paced technology-driven world, the average business executive does more travelling than sit in the comfort of his office. When you are on the move, there are some tools and gadgets you just cannot do without if your work has to flow in a seamless manner. Find out what these indispensable tools are.

Recommended ReadingThomas Picketty’s book “Capital in the 21st Century” has received rave reviews from those who like his findings and utter condemnation from those who think he got it all wrong with his data and facts. The heightened interest from the financial and literary world is mainly due to the interesting conclusions he draws in relation to capitalism. Daniel Shuchman, a New York fund manager reviews “Capital in the 21st Century”.

Comps. & Mkts.Get all your latest market numbers and trading figures plus added indices and rates here.

CommoditiesLatest commodity prices in Ghana as compiled by Esoko.

Energy: Page 52

Management: Page 49

Aviation The need for a national airline is one issue that has been coming up every now and then in the national discourse. But taking cognisance of where previous attempts at forming a national airline ended us, would it be prudent to set one up now? Kapini A. Atafori delves into the issue to inform the debate.

EnergyThe Tema Oil Refinery (TOR) has been a very relevant industrial establishment to the growth of Ghana’s economy. But lately, the body has become more of an albatross than the goose that lays the golden eggs. With its debilitating debt portfolio and management’s inability to raise finance for oil imports, Government has been looking elsewhere for a ‘bailout’. Fortunately, it has found one in Petrosaudi. Oppong Baah takes a look at this new partnership and the likelihood of it ending TOR’s woes.

InsuranceOne good thing that has come with mobile telephony is the ability of people and businesses to use the platform to engage in businesses totally unrelated to communication - like insurance. Georgina Adjei assesses the impacts of ‘mobile

4 GHANA BUSINESS & FINANCE JUNE 2014

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ITEThe National Economic Forum

- another masterpiece of a charade for the history books?

So here we are again, neck deep in yet another economic quagmire whose root causes are no one’s but ours. It seems our nation is in a cyclical development path where we suffer and sacrifice to stabilise and grow our economy for a period and then, with a ‘deft’ touch from our leaders, everything is reversed to zero.

When in 2011 the nation’s economy grew at an impressive pace unrivalled anywhere in the world, we patted ourselves on the back so hard that we forgot our history for a moment - that our country had never gone on a sustained growth path for more than a four-year continuous stretch since the advent of multi-party democracy in the country. It was always coming, after all we have seen it happen after every general elections since we begun experimenting with multi-party democracy. Thus after a massive round of binge spending during the 2012 electioneering period, the suspenders of the country’s economy had no option but to give way to a deterioration in the nation’s macroeconomic environment which has all but grounded the economy now.

President Mahama, unable to face the challenges alone with his government decided to convene what was termed the National Economic Forum (NEF) earlier this month, a forum whose mandate, among others, was to brainstorm and come up with medium to long term solutions for the nations teething problems. Not a bad effort when looked at from the perspective of the general well-being of Ghanaians, but how was the problem caused in the first place? The more blunt but important point to make is that a couple of years down the line, we would be back to this same level scratching our heads for answers because whatever recommendations that came up during this NEF might not have been used by government.

History, contrary to popularly-held belief, does not repeat itself, it is human beings who repeat history and when they repeat it, sometimes they do so just for records sake and not necessarily to derive any benefits from it. In trying to justify the need for such a forum as the NEF, the claim was made by some government functionaries that this year’s NEF was the third in the series, the first two having been organised by the Kuffuor and Rawlings administrations. Indeed, records show that they did, but the critical question to ask is whether the outcomes of those two previous conferences were utilized by those two governments in any way. This could be hard to answer but there is a

strong inclination that the outcomes were not utilized because if they were, the nation would not be on its knees as it is today. After all, the consensus reached and the solutions proffered at such fora are supposed to be for medium to long term and not for the short term.

One thing that also stands out is the readiness to accept everyone’s view including our political opponents when we get to the seemingly irredeemable levels in our economic development. If all these brains exist in our nation, but are tainted with whichever political colouration, and yet are ready to serve with an aim to moving the nation forward, why not ditch petty political differences and draft everyone in to help?

The NEF might be a positive move by President Mahama and his team, but it is only history that will determine if this is not one of the big games politicians usually play to share the blame and buy time.

Eric Kwame AmesimekuEditorTel: 0244 985 098Email: [email protected]


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Air Namibia and Royal Jordanian, have announced that they will be ending their operations in Ghana. Air Namibia has been operating in Ghana since 2009 while Royal Jordanian only launched last year. They follow Virgin Atlantic which also ended operations in Ghana in 2013. All three exits have been attributed to an inability to meet operational costs due to low patronage.

While some have been quick to express worry about the state of the aviation industry itself, a closer look shows that the departing airlines were dealing with specific difficulties. Air Nambia, for example, made its decision after South African Airlines, its more dominant neighbor and rival, announced that it was increasing flights on that route. With little traffic between Accra and the Namibian capital, Windhoek, Air Namibia relied heavily on travellers seeking to connect to South Africa. This is the second time the airline has announced

its intention to terminate its Ghana operations in two years although it is expected to actually do so this time.

Royal Jordanian operations in Ghana were part of a wider strategy to explore new markets and destinations in order to boost inbound tourism to the Jordanian Kingdom. It also expected

that muslims travelling to Saudi Arabia for the annual Hajj and Christians wishing to visit the baptism site and other holy sites would provide a ready source of customers. With their exit, it would seem as though the strategy has failed to deliver the expected returns.

Some industry watchers say these airlines could be victims of an inability to conduct proper research prior to their market entry. There are currently more than 20 international airlines operating out of the Kotoka International Airport (KIA) in Ghana.

Meanwhile, one of the world’s fastest growing airlines, Qatar Airways, is expected to begin operations in Ghana from soon. The Qatari airline has started recruiting personnel for their operations in the country and is expected to begin operations with cargo services.

Even as these efforts are being made, it is expected that consumption will increase from current levels of about 350,000 tonnes a year currently to about 1.68 million metric tonnes over the next five years. Average per capita consumption is expected to hit 63kg as early as 2015, nearly double current levels of 38kg.

Weak policy has been blamed for the inability of the sector to reach its full potential.

The NRSRM is expected to address some of these weaknesses and provide a coordinated platform to address issues in rice production, including development and release of new rice varieties, distribution and supply of rice seeds, infrastructure and equipment for quality seed production and training for those operating within various levels of the rice seed value chain.

While the NSRSM is to strengthen policy, the German government-backed CARI is to improve the livelihoods of rice farmers. Promoters of the project hope that by improving the quality of output, rice farmers would be able to sell more of their produce, earn more and build capacity that enables them to upscale production.

TechnoServe Ghana, the local implementing agency, says the increment of productivity and quality of paddy rice, efficiency of local rice sourcing, processing and marketing are some of the areas in which the project would assist rice farmers. Similar initiatives are ongoing in Burkina Faso, Nigeria and Tanzania and a total of 120,000 African rice producers are expected to benefit from the initiative.

Other partners in the project are Gates Foundation, German Development Cooperation (GIZ) and the Kufuor Foundation.

Agriculture

More efforts to boost local rice industryGhana continues to seek self-sufficiency in rice production with the launch of two new initiatives to boost local production. The government announced that it had developed a National Rice Seed Roadmap (NRSRM), while the German Ministry of Economic Cooperation launched the Competitive African Rice Initiative (CARI) project in collaboration with some local and international partners.

Rice importation has long been a sticking point for policy makers. In 2013, USD 306 million was spent on imports to supplement local production, which could meet only 46 percent of demand. This amounted to supply of 717,361 tonnes. The government is planning to increase production by 20 percent per annum over the next four years with a view to reaching at least 13 percent surplus rice production by 2018.

Aviation

Two more airlines pull Ghana operations


‘Dalex Paddy’ offers free cash to Government WorkersDalex Finance and Leasing Co. Ltd. has announced the ‘Cash Dash’ promotion which gives free cash to government workers. The promo celebrates the rebranding of the Dalex Salary Loan Agent as the ‘Dalex Paddy’. The ‘Dalex Paddy’ is the friendly and ethical service provided by the Dalex sales force of over 750 agents nationwide.

Announcing the formal launch of ‘Dalex Paddy’ at a Press Con-ference on Tuesday 3 June 2014, Mr. Ken Thompson (CEO of Dalex Finance) said “when you need a loan you think first

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Business confidence shaken by currency, BOG, VAT

The Association of Ghana Industries (AGI) Business Barometer survey report for the first quarter in 2014 recorded a significant dip of 90.13 percent in its business confidence index, representing one of the lowest in years.

Factors contributing to the drop included the cedi’s depreciation against the dollar, which stood at 17.6 percent by end of March

and the effects of the additional 2.5 percent VAT introduced in January. The directives from the Bank of Ghana directives regarding current accounts also did not sit well with Ghanaian businesses; the survey revealed that 52 percent responded negatively to the directives.

Unveiling the report at a media event in Accra, Seth Twum-Akwaboah, Chief Executive Officer of AGI said that the survey

report was sampled from 446 valid responses from the regions in the manufacturing, service and agriculture sectors.

The survey revealed that local manufacturers who import raw materials were hit by foreign exchange losses and their margins were affected by the appreciation of input prices, utility prices and rising transportation costs.

Mr. Twum-Akwaboah said the survey revealed that 63.5 percent of the respondents thought employment levels would remain the same while about 15 percent were certain that employment figures would decrease.

He said the responses do not give a good picture of the prospects for employment in the next six months, stressing that only 21.7 per cent foresee an improvement in employment figures.

He said out of the number surveyed, 48.4 percent of the exporters believed export trade had improved for the first quarter of 2014 while 10.5 percent said their exports had deteriorated within the same period.

On export expectation, the survey revealed that over 50 percent said their export volumes would remain same since they are uncertain of the export situation in the next three months, with only 28.4 percent of the exporters intending to increase their exports.

of your friend because you trust your friends and know that they care for you, likewise, we want our sales force to provide services to our clients as friends hence the name ‘Dalex Paddy’.”

According to Mr. Ken Thompson, the current economic cli-mate creates the strong temptation to borrow more than may be prudent. Dalex Finance is exercising leadership in the sector by promoting ethical lending. The ‘Dalex Paddy’ ensures that clients are aware of the full cost of the loan, rather than simply advertising speed and accessibility of funds.

Further, the ‘Dalex Paddy’ will not push clients to borrow more than they need. Dalex Finance has been undertaking a massive nation-wide retraining program, since last year, to transform the Dalex Sales Agents into the friendly and ethical “Dalex Pad-dy’ force. This training has been in partnership with the Inter-national Finance Corporation (IFC) Business Edge Program.

The Dalex ‘Cash Dash’ is about giving away free cash of up to GH₵ 250.00 to every new borrower. This is to help relieve the burden on pressured workers.

Dalex Finance and Leasing Company is a leading Non-Bank Financial Institution in Business Loans, Leasing, Investments and Salary Loans. It is ranked number 16 in the Ghana Club 100 (2013).

Finance


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Uncertainty over Republic Bank’s HFC move Following the controversial takeover of Merchant Bank by Fortiz, Ghana’s banking sector is set to be rocked by another ill-received takeover attempt. The board of HFC Bank is said to be unhappy after Trinidad and Tobago’s Republic Bank made an offer to buy out shareholders after becoming the single largest investor. The offer was made in accordance with the rules of Ghana’s Securities and Exchange Commission (SEC). Republic Bank had earlier applied for a waiver, which the SEC rejected, much to ire of the Managing Director of HFC Asare Akuffo who protested publicly.

The 176 year old Republic Bank Limited, an independent Caribbean

bank has been consolidating its holding in the Ghanaian bank since December 2012 when it bought 8.79 percent shares in HFC Bank Ghana for an amount of USd 8 million. This was during a private flotation of 112, 420, 246 ordinary shares by HFC. It increased its stake to 32.02 percent after buying 23.23 percent additional shares from Aureos Africa Fund LLC. On Friday June 7, 2013 Republic bank acquired 68,854,703 ordinary shares of no par value in HFC Bank Ghana Limited from Aureos Africa Fund LLC at a price of GHS0.56 per share. It further acquired 7.98 percent additional shares in 2013 from Union Bank of Nigeria which increased its shareholding in the bank to the current 40 percent.

Under the SEC’s rules, Republic Bank had to make a mandatory offer for the remaining shares of the bank after becoming the largest shareholder. After its plea for a waiver was rejected, the bank made an offer of GHc 1.30 per share to the bank’s investors, later increasing it to GHc 1.60 per share. The revised offer is at a premium of 65 per cent over the mandatory price and 28 per cent above the current trading price.

HFC’s management has however expressed its disappointment in the SEC for rejecting the waiver and Republic Bank for breaking the rules of an arrangement that HFC said it agreed with Republic Bank when it first became a shareholder in the Ghanaian bank. In a statement to local media, HFC expressed surprise at the turn of events and accused Republic Bank of acting in bad faith.

Meanwhile, Republic Bank’s auditors, Ernst and Young, have provided confirmation that available resources of the Bank are sufficient to satisfy full acceptance of the offer, which shall be settled in cash or by way of bank transfer. The Bank said it has shown its commitment to HFC by investing over USd 40 million in it over the years and assisting with training of staff, while deploying some of its own employees to Ghana to help boost operations of HFC.

While it had previously said that it did not want to rush the takeover due to a lack of complete understanding of the Ghanaian economy, the largest indigenous financial institution in the Caribbean, with an asset base of over $50 billion now says it is keen to operate in Ghana, which it described as “a very attractive economy”.

Investment

Alternative Exchange eyes first listingsThe alternative exchange established by the Ghana Stock Exchange (GSE) to enable small and medium scale enterprises access finances is set to receive its first listings. The exchange was set up in response to complaints that the stringent procedural requirements made it impossible for smaller companies to list on the GSE.

Under its rules, companies with a minimum stated capital of GHc 250,000 which have been operating for at least a year would be eligible to list on the alternative exchange. The GSE says it would also consider start-ups that show exceptional promise. Once listed, companies would have to publish financial statements twice a year. On the main exchange, companies have to publish results quarterly. They also need to have a minimum of GHc 1 million in capital to apply for listing.

Last year, the GSE set up the alternative exchange with a revolving fund of GHc 1 million to support SMEs list on it. Six companies have since expressed interest with three of them applying to access the fund to assist them to undertake the listing. Intravenous Infusions, Meridian Marshall and Processed Food and Spices are the companies that have applied while Juaben Oil Mills and Domod are actively considering the move.

Processed Foods and Spices Limited, one of the country’s pioneering food-processing companies, has said that it has met about 80 per cent of the requirements and hopes to be complete them by June, making it the first company to raise equity via the new exchange. Its board is yet to announce the target of the share listing but has said that the new investment would go into automating the company’s processes.

Meanwhile, the Ghana bourse has received its first listing in three years from Mega African Capital (MAC) Limited, a private investment company. The listing is also the first by a company which invests in equities across Africa and the real estate sector. The company, which is owned by Accra-based Oak Partners Limited listed 8.64 million shares worth nearly GHc 25 million Ghana. The company, which currently has investments in Ghana, Malawi and Tanzania said the listing would enable it raise capital for long-term projects.


Agriculture

Societe Generale offers €7.5m to GREL

Societe Generale Ghana (SG Ghana), a leading banking institution and a subsidiary of the Societe Generale Group, has supported the Ghana Rubber Estates Limited (GREL) with a € 7.5 million 10-year facility to assist the company develop a new rubber plantation as part of its expansion programme.

Deputy Managing Director of SG Ghana, Borut Vujcic, signed the agreement for the bank while the Managing Director of GREL, Lionel Barre initialled for GREL in Accra.

Mr Vujcic stated that the facility showed that SG Ghana was committed to meeting the needs of the private sector by providing it with the needed long-term financing.

Mr Barre, who expressed his appreciation, stated that the facility was in line with the company’s target of doubling its current production capacity of 17,000 to over 45,000 tons per annum by 2020.

Gilbert Hie, Managing Director of SG Ghana, stated that long-term financing in Euros was indicative of Societe Generale Ghana’s commitment to providing adequate financing to exporters in producing locally and promoting Ghana exports.

Societe Generale Ghana is one of the leading banks in Ghana with 37-networked branches across the country and has been playing a vital role in Ghana’s economy for 150 years.

Company reports

Ecobank Ghana shares soar by 48% for 2013

Shareholders of Ecobank Ghana will be paid dividend of 43 Pesewas per share for the 2013 financial year, representing a 48 percent growth. Shareholders were paid 29 Pesewas per share in 2012. Ecobank

earned a record GHc 267.8 million cedis as profit-before-tax and revenue of GHc 589.7 million. The bank’s share price increased by 111 percent over the last 12 months from GHc 3.75 to GHc 7.92.

“Considering the present level of financial sector development and the competitive pressures existing and emerging in Ghana’s financial sector, your bank has consistently focused on building up competencies to meet emerging challenges. The bank will strive towards maintaining mechanisms that will deliver excellent returns to shareholders in terms of share price and dividend,” Ecobank Chairman Van Lare Dosoo told shareholders at the bank’s annual general meeting in May.

Some shareholders were however not happy about the jump in Non-Performing Loan ratio to 5.9 percent. But Managing Director of Ecobank Ghana, Samuel Ashitey Adjei, said the figure was well within the industry average of 12.3 percent.

“Ecobank has always had a non-performing loan ratio of 1 Percent. It jumped to 5.6 percent because we were trying to clean our books after the acquisition of the Trust Bank. We did not want to come here and present our profitability report knowing very well that are some assets we are not sure of. So we made the provisions but it doesn’t mean we have lost the. So we will pursue them and make sure we collect these monies,” he explained.

The bank’s customer loans grew by Ghc 52 percent to 2.1 billion. Deposits also grew by 32percent to Ghc 3.2 billion. Impairment to loans however stood at Ghc55 million at the end of the 2013 financial year.

Fiscal deficits in sub-Saharan Africa are rising, with Ghana and Zambia the most at risk if there’s a sudden reversal of foreign inflows, the International Monetary Fund said.

Budget shortfalls in the region “are elevated considering the prevailing high growth and still high commodity prices,” Antoinette Sayeh, director of the Washington-based lender’s Africa department, said in a statement on the IMF’s website. In Ghana and Zambia, spending has been growing at “unsustainable levels,” the IMF said in its Regional Economic Outlook.

Credit-rating agencies have downgraded the debt of both nations in the past four months as they struggle to curb fiscal and current-account deficits. Ghana’s cedi and Zambia’s kwacha are the worst-performing African currencies against the dollar in the past six months.

In countries where fiscal policy has weakened, the risk of debt distress has increased, the IMF said. Debt as a proportion of gross domestic product in Ghana climbed 8 percentage points between 2012 and 2013, while it rose 15 points in Malawi, the IMF said.

“Countries with large fiscal deficits or increasing debt levels, for example, Ghana and Zambia, should intensify their efforts to bring their public finances back to a sustainable footing, including by containing expenditure,” the IMF said.

Investors have reduced their appetite for riskier, emerging-market debt since last year after the U.S. Federal Reserve began scaling back its USD 85 billion-a-month asset purchase program that’s helped to prop up global growth. That has contributed to weaker currencies in developing nations, adding to pressure on inflation.

The IMF projects that consumer-price growth in sub-Saharan Africa will probably average 6.2 percent this year, compared with 5.9 percent in 2013.

Public finances

IMF: Ghana, Zambia most at risk as deficits in Africa widen

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Ghana will lose 500,000 ounces of gold this year as a result of some mining companies suspending their operations as a result of declining gold prices, the Minerals Commission has predicted.

Gold production for 2014 is estimated at 3.1 million ounces, from an initial target of 3.6 million, an Assistant Manager at the Minerals Commission, Daniel Krampah has stated. “We will definitely record lower volumes this year,” he said, adding that, some companies have placed their mines under care and maintenance. If the price of remains at USD 1,299.71 where it was mid-May, Ghana will, in 2014, be losing USD 649,855,000 in revenue due to the 500,000 ounces shortfall.

Ghana’s gold production climbed to a record 4.3 million ounces in 2012 from 3.6 million ounces the previous year after prices reached a record high in September 2011. The nation produced 107.9 metric tons of gold in 2013, making it the eighth- biggest producer, according to data from Thomson Reuters.

Gold accounts for about 90 percent of total mineral output in Ghana. The mining sector, especially gold, continues to rake in billions of dollars every year, with the commodity currently leading the country’s export earnings, surpassing cocoa, which had for a long time been the country’s biggest export earner. On the average, the sector has contributed about USD 2 billion per annum to Ghana’s GDP in the last decade.

However, as most of the gold mining concessions belong to private investors, the mining sector’s contribution to Ghana’s GDP does not mean that the revenues belong to the government and people of Ghana.

Generally, the government retains just a 10 percent carrying interest in mining companies to which it grants a license. So legally, that is all Ghana and Ghanaians may own in the mining operations in Ghana, other than for various levies, fees, licenses, taxes and royalties that the government imposes on mining companies.

Ghana’s economy slowed sharply in the third quarter of 2013 and rose a meager 0.5 percent over the previous quarter, down from a 3.9 percent expansion in the previous three-month period due to a sharp fall in global gold prices, which prompted some mines to cut production.

Public finances

Ghana to lose over USD 600 million over falling gold prices

The natural resource funds that the Ghanaian government uses to manage oil revenues are relatively well-governed, a non-governmental organization has found.

The Revenue Watch Institute, a New York-based NGO with an office in Accra, has released research indicating that the Ghana Petroleum Funds meet 13 of 16 good governance fundamentals.

Researchers concluded that the funds feature clear deposit, withdrawal and investment rules, effective oversight and other essential attributes of good governance. “Together, the Ghana Stabilization Fund and the Ghana Heritage Fund manage more than USD 450 million,” said Emmanuel Kuyole, Africa regional coordinator for Revenue Watch.

“Thanks to strong legal provisions, citizens have information on how much is deposited, invested and earned. This transparency is a significant gain. Too much sunshine does not spoil anything.” However, researchers found that there was room for improvement. The case study of Ghana indicated that as of early 2013, when the period of study concluded, there were still problems in terms of public disclosure of external audits and the detailed responsibilities of fund managers and staff.

In response to the report’s release, representatives of the ministry of finance announced that the government had already engaged international accountancy Ernst & Young to conduct an external audit of the funds. Revenue Watch’s economic analyst Andrew Bauer presented the research at Accra’s Alisa

Hotel. Beyond the findings of the report, he suggested that the government use un-saved revenues for investment rather than consumption.

This comes at a time when Ghana faces volatility in its non-oil revenues and increasing deficit and national debt levels, Bauer explained. “Ghana’s good management of its saved funds demonstrates compliance with the provisions of the Petroleum Revenue Management Act,” said Bauer. “This must also extend to the act’s requirement that revenues be spent in line with a national development plan, to ensure maximum efficiency.”

“Ghana has strong deposit and withdrawal rules that help prevent mismanagement of oil revenues,” the report concludes. Natural resource funds are an increasingly popular subset of sovereign wealth funds, and in principle they serve a variety of purposes: expenditure smoothing, savings of resource revenues, earmarking money for development, “sterilizing” of revenues to avoid adverse macroeconomic impacts, and protection from corruption.

Revenue Watch’s Ghana profile maps the management and accountability safeguards of the funds, and also the steps through which revenue flows to reach them. The report details six key steps that countries can take to ensure accountability and transparency, including the establishment of fiscal rules, the elaboration of investment rules, and strategies for the creation of strong oversight bodies.

Public finances

Ghana Managing Petroleum Funds Well


Philip Redman joins leadership at Voltic Voltic (GH) Limited, producers of Voltic Natural Mineral Water, has appointed Philip Redman as General Manager in charge of operations. Philip

Redman joined SABMiller (Plc), Voltic’s parent company, in 2012 initially in charge of innovation and was later promoted to Senior Portfolio Strategy Manager. He has worked closely with a number of the SABMiller businesses across Africa to develop portfolio and category strategies that will support the growth of these businesses for the next 5 years.

Prior to SABMiller, Phil was the Strategic Marketing Director at Honeywell (ED&S), a world class manufacturing organisation. As a strategist, he is expected to bring on board his vast experience in the African markets from his work in various capacities in Zimbabwe, Botswana, Tanzania, South Africa and Nigeria.

A statement signed by the Managing Director of Voltic, Mr. Gregory Metcalf noted that “Voltic continues to perform well as the market leader in Natural Mineral Water category. We have recognised that Voltic’s continued growth and increasing sophistication have brought about the need for more direct and focused leadership. In Philip Redman we are delighted to have secured a leader with a great track record. We are confident that under Phil’s guidance Voltic will achieve even greater heights and remain the Natural Mineral Water brand of choice by Ghana’s discerning consumers.”

Philip Redman holds an MBA from the London Business School and a Master’s degree in Mechanical Engineering from the University of Bristol, UK.

Stephen Nirenstein to handle GGBL Finances

Guinness Ghana Breweries Limited has named Stephen Nirenstein as its new Director of Finance. Mr Nirenstein joins Guinness Ghana from Diageo Budapest, Hungary, where, as Group Financial Planning and Analysis Director, he led an

effective business performance management reporting process that moved beyond providing reliable, accurate and timely management information to driving insights behind performance.

At the same time he led the simplification of the annual planning process and developed a well-respected and highly motivated team.

Peter Ndegwa, Managing Director of Guinness Ghana expressed delight at Mr Nirenstein’s appointment. “He will play a key and pivotal role in achieving the Company’s vision of becoming the most vibrant and iconic business in Ghana,

focusing on driving out cost to invest in growth as well as lead in engaging with our investor community,” said he said in a statement.

Prior to moving to Budapest in early 2012, Stephen spent three years as the financial controller for the Diageo Red Stripe business in Jamaica, prior to which he was the commercial finance manager for Diageo International Beer Supply based in London, and also spent a couple of years as the Finance Planning and Reporting manager for the previous Diageo International business.

Stephen started his career with Diageo as a brand analyst based in South Africa, where he is originally from. He is a member of the South Africa Institute of Chartered Accountant and an alumnus of the University of Cape Town. His appointment took effect from April 24, 2014.

Mansa Nettey joins Stanchart board

Standard Chartered Ghana has appointed the Head of Global Markets, Mansa Nettey to its Board. This is the first time the Bank has named a female as an Executive Director in its 118 year history in Ghana.

Mansa first joined the Management team of the Bank, two years ago as Head of Global Markets and also played an integral role in the Bank’s thought-leadership agenda with Government and Regulators.

In her new capacity as an Executive Director, she will be required to leverage on her technical expertise and extensive network to build a stronger and more competitive business across the country.

Commenting on her appointment, Kweku Bedu-Addo, Chief Executive of Standard Chartered Ghana said, “we are delighted to have Mansa join our board in Ghana. It is a massive addition and a historic achievement which also represents a boost to the bank’s diversity and inclusion credentials”.

Mansa, a product of Manchester Business School as well as a qualified pharmacist, joined the bank’s Corporate Banking team in 1998 from Price Water House Coopers. She rose through the ranks to the position of Head of Financial Markets Sales across West Africa. In this role, she was instrumental in assisting corporate and government entities to understand and adopt value added financial market products.

CORRECTIONIn our last edition, we reported that Farouk Khailan had been appointed Chief Executive Officer at Royal African Holdings. Mr Khailan has in fact, been appointed Chief Operating Officer of the company. We apologise to Mr Khailan, Royal African Holdings and all our readers for the error.

Movers and shakers

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Another round of reporting of financial statements and Annual General Meetings (AGMs) have gone by leaving in its wake lots of good news for shareholders, investors, the tax authorities and the financial industry at large. Almost all banks in the country recorded impressive profits.

Barclays Bank ended last year with a profit before tax of GHc 202.5 million, representing a 35 percent increase in earnings from GHc 150 million recorded for 2012. Guaranty Trust Bank’s profit after tax increased to GHc 53 million by end of 2013 from GHc 39 million recorded in 2012. Stanbic bank, one of the top five banks in Ghana, made record profits of 108 million Ghana cedis last year, representing almost 90 percent jump over the 2012 figure. Fidelity Bank’s profit after tax went up by 158 percent to GHc 43 million. Not to be outdone, Ghana’s biggest bank by assets, Ghana Commercial Bank made a profit after tax of GHc 229 million, up by 60 percent as against 2012 profits and it goes on and on.

Ghana’s banking sector has twenty-eight universal banks but the sector is dominated by a small number of major players: in 2010 six of the twenty-seven – GCB, Barclays, Ecobank, Standard Chartered, ADB and Stanbic – accounted for more than half (53 percent) of total sector assets, according to the Oxford Business Group (OBG).

The banking penetration rate, defined as the percentage of the adult population (above 15 years of age) with an account at a financial institution, stood at about 33 percent in 2012,

according to data from the World Bank. This compares favourably with an average of 24.1 percent for sub-Saharan African.

Despite the number of universal banks, some analysts have complained that their capital size is way too small for them to undertake big-ticket transactions. They explain that Ghanaian banks are priced out of deals in the oil and gas, mining and infrastructure projects. They cite the annual Cocobod purchases

which are financed by international banks outside the country as an example. Cocobod normally requires at least USD 1million and no single Ghanaian bank can lend them this money just because their capital base is too small.

Other heavy investment projects underway include the Ghana Gas project costing a little over USD 890 million and the Bui Dam project which cost USD 750 million. All were funded by Chinese and Ghana government loans. The Jubilee partners say it will cost USD 4 billion to develop the country’s new oil field- The TEN project. That is more than

the capital base of the entire twenty-seven universal banks in the country. This has led to calls for more consolidation in the sector. Many say Ghana needs few, stronger banks to fund the country’s growth.

Back in 2008, the Bank of Ghana (BoG) decided to raise the capital requirements of banks to bring it in line with Basel III Banking regulations, which seeks for more consolidation for banks.

Are Ghana’s banks too small to succeed?

“That is more than the capital base of the entire 27 universal banks in the country. This has led to calls for more consolidation in the sector.”

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Anthony Sedzro

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EThe main reason behind the increase was that several banks were repeatedly asking for special dispensations to exceed the maximum amount they were allowed to lend to a single customer – currently set at 10 percent of their loan book – which in its view signalled that the banks’ capital base was not adequate, according to the OBG.

The BOG therefore raised the capital requirement for banks to GHc 60 million (USD 35.6 million). All banks met the requirements by the end of 2012. The regulator also increased the minimum capital requirements for Rural and Community Banks (RCBs) from GHc 50,000 (USD 29,645) to GHc 150,000 (USD 88,935).

Post the global financial crisis in 2007, consolidation has been a popular regulatory theme. The eight biggest U.S. banks are to boost their capital levels by a total of about USD 68 billion under new rules, U.S. regulators said last month. The rules would limit bank’s reliance on debt, part of efforts to prevent another financial crisis. By 2018 it is the US regulators wish that banks must rely more on funding sources such as shareholder equity, rather than borrowing money.

European banks have seen many mergers of their own and many EU banks are now subject to regular ‘Stress Tests’ to ensure their capital base is healthy to withstand shocks akin to that which hit them in the financial crisis.

Size mattersA number of consolidation activities have taken place in the past 12 months. This started with Merchant Bank’s much-publicised purchase by local Ghanaian lender, Fortiz Equity Fund. First Bank of Nigeria took over the assets of Malaysian-owned International Commercial Bank (ICB), a Nigerian private equity firm acquired a controlling stake in erstwhile fully Ghanaian-owned First Atlantic Bank, and currently Trinidad and Tobago’s Republic Bank is in the process of taking over HFC Bank. At a shareholders forum last month, the Managing Director (MD) of CAL Bank Frank Adu Jr, hinted that the bank may soon merge with a foreign partner.

“Size matters and consolidations is needed in Ghana,” says Alhassan Andani, the MD of Stanbic Bank. “However, it will be driven more by regulation than the market. Banks are still making good money in their niche segments and don’t see the need for consolidation,”

Most of the consolidation in the sector is driven by the regulator. Banks by themselves, especially the indigenous ones are reluctant. They prefer to keep their local identities. Mr Frank Adu Jr at the same shareholder forum gave a caveat that Calbank will be happy for a merger with a foreign bank but maintained that only on condition that it will not dilute the bank’s indigenous identity.

Others are opposed to efforts to encourage consolidation. “It is not a numbers game – the sector has to be allowed to grow on its own terms. The principle aim should be to get more people onto bank books rather than pushing for mergers,” said Unibank MD Felix Nyarko-Pong in an interview with the OBG.

Most banks lend to the corporate sector to the detriment of the SME and retail sectors. For example, despite being among the five biggest banks in the country, Standard Chartered has only twenty-five branches; evidence that its focus is not on

the retail market. The SME sector is a major job provider so if credit is denied to them, it has a far wider effect.

The sector is also heavily dominated by an institutional investor, Social Security and National Insurance Trust (SSNIT) which has stakes in various banks. This, some say makes the sector un-competitive.

The future outlook is bright considering expansion in oil and gas, government’s budgetary focus on infrastructure, and a generally stable micro-economic environment. Ghana Gas will hopefully be operational by end of the year giving further boost to the economy. If the general macroeconomic issues are well handled by the government, further boost of the banking sector is predicted.

“...the sector has to be allowed to grow in its own terms. The principle aim should be to get more people onto bank books rather than pushing for mergers,”


The Financial Action Task Force (FATF) is an inter-governmental body established in 1989 by the Ministers of its Member jurisdictions. The mandate of the FATF is to set standards and to promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and the financing of proliferation, and other related threats to the integrity of the international financial system. In collaboration with other international Stakeholders, the FATF also works to identify national-level vulnerabilities with the aim of protecting the international financial system from misuse.

The FATF Recommendations set out a comprehensive and consistent framework of measures which countries should implement in order to combat money laundering and terrorist financing, as well as the financing of proliferation of weapons of mass destruction. Countries have diverse legal, administrative and operational frameworks and different financial systems, and so cannot all take identical measures to counter these threats. The FATF Recommendations, therefore, set an international

standard, which countries should implement through measures adapted to their particular circumstances.

The FATF Recommendations set out the essential measures that countries should have in place to:• identifytherisks,anddeveloppoliciesanddomestic coordination;• pursuemoneylaundering,terroristfinancingandthe financing of proliferation;• applypreventivemeasuresforthefinancialsectorand other designated sectors;• establishpowersandresponsibilitiesforthecompetent authorities (e.g., investigative, law enforcement and supervisory authorities) and other institutional measures;• enhancethetransparencyandavailabilityofbeneficial ownership information of legal persons and arrangements; and• facilitateinternationalcooperation.

The original FATF Forty Recommendations were drawn up in 1990 as an initiative to combat the misuse of financial systems by persons laundering drug money. In 1996 the Recommendations were revised for the first time to reflect evolving money laundering trends and techniques, and to broaden their scope well beyond drug-money laundering. In October 2001 the FATF expanded its mandate to deal with the issue of the funding of terrorist acts and terrorist organisations, and took the important step of creating the Eight (later expanded to Nine) Special Recommendations on

Theophilus Odjer-Bio

Money laundering and terrorist financing:

a panacea in sight?

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Terrorist Financing. The FATF Recommendations were revised a second time in 2003, and these, together with the Special Recommendations, have been endorsed by over 180 countries, and are universally recognised as the international standard for anti-money laundering and countering the financing of terrorism (AML/CFT).

Following the conclusion of the third round of mutual evaluations of its members, the FATF has reviewed and updated the FATF Recommendations, in close co-operation with the FATF-Style Regional Bodies (FSRBs) and the observer organisations, including the International Monetary Fund, the World Bank and the United Nations. The revisions address new and emerging threats, clarify and strengthen many of the existing obligations, while maintaining the necessary stability and rigour in the Recommendations.

The FATF Standards have also been revised to strengthen the requirements for higher risk situations, and to allow countries to take a more focused approach in areas where high risks remain or implementation could be enhanced. Countries should first identify, assess and understand the risks of money laundering and terrorist finance that they face, and then adopt appropriate measures to mitigate the risk. The risk-based approach allows countries, within the framework of the FATF requirements, to adopt a more flexible set of measures, in order to target their resources more effectively and apply preventive measures that are commensurate to the nature of risks, in order to focus their efforts in the most effective way.

Combating terrorist financing is a very significant challenge. An effective AML/CFT system, in general, is important for addressing terrorist financing, and most measures previously focused on terrorist financing are now integrated throughout the Recommendations, therefore obviating the need for the Special Recommendations. Countries are expected to do a few things.

Firstly, countries should identify, assess, and understand the money laundering and terrorist financing risks for the country, and should take action, including designating an authority or mechanism to coordinate actions to assess risks, and apply resources, aimed at ensuring the risks are mitigated effectively. Based on that assessment, countries should apply a risk-based approach (RBA) to ensure that measures to prevent or mitigate money laundering and terrorist financing are commensurate with the risks identified. This approach should be an essential foundation to efficient allocation of resources across the anti-

money laundering and countering the financing of terrorism (AML/CFT) regime and the implementation of riskbased measures throughout the FATF Recommendations. Where countries identify higher risks, they should ensure that their AML/CFT regime adequately addresses such risks. Where countries identify lower risks, they may decide to allow simplified measures for some of the FATF Recommendations under certain conditions.

Similarly, countries should require financial institutions and designated non-financial businesses and professions (DNFBPs) to identify, assess and take effective action to mitigate their money laundering and terrorist financing risks. Countries should have national AML/CFT policies, informed by the risks identified, which should be regularly reviewed, and should designate an authority or have a coordination or other mechanism that is responsible for such policies. Countries should ensure that policy-makers, the financial intelligence unit (FIU), law enforcement authorities, supervisors and other relevant competent authorities, at the policymaking and operational levels, have effective mechanisms in place which enable them to cooperate, and, where appropriate, coordinate domestically with each other concerning the development and implementation of policies and activities to combat money laundering, terrorist financing and the financing of proliferation of weapons of mass destruction.

Finally, to combat money laundering countries should criminalise money laundering on the basis of the Vienna Convention and the Palermo Convention. Countries should apply the crime of money laundering to all serious offences, with a view to including the widest range of predicate offences.

The writer is a Chartered Financial Economist and Director of Business Development at Golden Brain Consult. He is also an Executive Board Member of the Association of Anti-Money Laundry Specialists-Ghana Chapter.

“Similarly, countries should require financial institutions and designated non-financial businesses and professions to identify, assess and take effective action to mitigate their money laundering and terrorist financing risks.”

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The comfort and convenience couched in a highly friendly ambience makes Ecobank Direct a welcoming centre for anyone, from the trader to the business manager, taking away the intimidating atmosphere that one will normally encounter at a banking hall.

The centre gives real meaning to digital banking as it offers customers of the bank and even non-customers the opportunity to utilize the centre’s advanced 24-hour Automated Teller Machines (ATMs) which allows users to, not only withdraw money, but to deposit cash and cheques, make balance enquiries, undertake transfers and bill payments and print out A4 statements. Other services available for users include a private and enclosed video conferencing suite to enable users access to expert advice from the bank’s staff located locally and across its network; interactive flat screen Televisions to display product information and allow service requests such as opening an account; and Touchscreen tablets for accessing Ecobank’s internet banking service. Sam Ashitey Adjei, Managing Director of Ecobank Ghana believes “The launch of Ecobank’s Digital Branch...is set to change the landscape of banking.”

In a chat with GB&F, Abena Larbi-Yeboa, the Manager at the Ecobank Direct centre disclosed that the underlying reason for the opening of the centre was the decision by managers of Ecobank “To find a way of easing the congestion in the bank’s branches and also creating a cashless society within the bank.” The idea thus syncs perfectly into Ghana’s new drive to strive towards a cashless society which is being championed by the government. The Manager adds that the move is also to encourage Ecobank’s customers to use alternate channels to do their transactions without resorting to the traditional banking hall. Besides the bank’s decision to operate the centre as a digital centre, Abena Larbi-Yeboa states “Inasmuch as we wanted this place to be a wholly digital centre, Ecobank also wanted to add an advisory service centre where the bank’s universal relationship managers will be at hand to assist clients with all their banking needs such as loan requests, private

banking, investment requests among others.” And as Abena says “Ecobank Direct is sure to change the face of banking in Ghana as people will begin to get accustomed to the a new way of banking where all one needs to do is to touch a button and have all of one’s transactions done.”

This concept thus fuses together the digital services accessible through the available gadgets and advisory services to be provided by the relationship managers at hand. The centre’s importance in the operations of Ecobank cannot be overemphasized as it serves as a backbone and support centre for Ecobank’s branches across the nation where one can enjoy all the services of the bank away from one’s branch.

Being the first in Ghana and West Africa for that matter, the success of the centre will inspire managers to replicate the concept in other theatres of their operations. To start with, the bank will deploy some of its intelligent ATMs in other branches within Ghana to decongest as well as offer customers within these branches a taste of hassle-free digital banking.

In spite of the convenience one enjoys at the Ecobank Digital centre, Abena Larbi-Yeboa discloses that Ecobank has taken the bold decision not to charge users of this facility any extra charges “There are no hidden fees, charges are as they are in the traditional banking halls.”

As Ghana strives to position itself as the financial hub in the sub-region, such innovations as being offered by Ecobank through its Ecobank Direct centre must be the guiding post of banks operating in the country. This will not only offer Ghanaians convenience in carrying out their day-to-day banking transactions but will also help banks streamline and reduce operational costs, as the long-term benefits of such facilities cannot be underrated.

Ecobank Direct - the new frontier in digital banking in Ghana Ecobank, the regional West African bank adjudged the ‘Best Bank in Ghana’ for the year 2012 has taken digital banking to another level with the opening of its Digital and Financial Services Centre dubbed Ecobank Direct in Accra. The one-stop self-service centre, the first in West Africa, provides a unique platform for the tech-savvy and the technology-inclined to skip the long queues in the traditional banking halls and engage in real-time digital transactions with little or no banking staff interface.


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Economic news in and about Ghana belies the heady celebrations of 2011. A freshly minted oil producer, the country recorded one of the highest growth rates in the world that year – a country record high of 14.4 percent. Noting growing income, a rising middle class and an improved revenue income owing to oil receipts, the African Development Bank was moved to name the nation, a “lower-income country,” much to the joy of the country’s economic managers. The nation, it was widely believed was on the verge of the takeoff that it had been expecting for over a decade.

Dancing along the cliff

How Ghana’s economy lost its mojo

he good times – or the illusion of it – would continue into 2012. By the beginning of 2013 however, things had started to unravel. Having weathered the demise of a President, a seamless handover and contested

national elections without a serious threat to its democratic stability, Ghana should have been on a high. The reality was different and sobering.

The growth rate of 7.2 percent (GHc 30.1 billion in real terms and GHc 73.1 billion in nominal terms), while objectively impressive, was half that of 2011 and two points below the government’s own projections for the year. Despite high prices for its major commodity exports, a spending splurge meant that while the government, which had made much of its fiscal prudence, promised a deficit of no more than 5 percent, the reality was a worrying 12.1% of GDP, compared to 4.3% of GDP in 2011.

Further and more worrying indicators would come from the troubles of the national currency, the cedi. The cedi had been enjoying a period of stability, buoyed by increased forex receipts on the back of oil exports and high commodity prices. With

the national current account in robust health, the cedi was able to hold its value against its major partners. In 2012 however, it began to slip. Alarm was however subdued as many put this down to the usual election year jitters that have affected the country in every election year since the return to constitutional rule in 1992.

In the first seven months of 2013, as the nation witnessed a high-octane legal drama to determine the legitimacy of the incumbent, President John Mahama, who had been declared winner of the 2012 elections, government spokespersons insisted that the failure to arrest the continuing decline of the currency, could be attributed to the unease that the case had caused.

The year 2013, overall, was a difficult one for the Ghanaian economy. As the global economic situation improved, investors dialed down their activities in frontier economies such as Ghana and returned to more familiar terrains in the developed world. Commodity prices, which had benefited from fragile stock markets fell as here again, investors drew down and returned to more conventional fare.


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worsened, the cedi was now in crisis and growth had decreased considerably.

Nowhere coolIn fairness to the managers of the Ghanaian economy, it is not a great time to be in their position. Despite impressive statistics over the years, the county’s economy has remained largely at a basic stage, primarily exporting raw materials and importing finished products. Services have boomed in recent times but have been hampered by poor infrastructure and a middle class that while rising, is still quite narrow. A largely informal economy also means that tax receipts are low and inadequate to fund government, which in turn is unwilling to do anything about its weight and appetite. Dependence on foreign donors, investment and loans has left the economy vulnerable to mood swings on the other side of the globe.

For immediate causes of the current crisis, one can look both inwards and outwards.

Ghana has always had a spending problem. Unable and unwilling to tackle the size of its public sector, the country has been paying for more than it gets since it was born. In response to wide unemployment and low wages, successive governments have relied on government programmes to susbsidise citizens’ lifestyles and prevent unrest. There are a number of problems with this approach, chief among them being that it fails to tackle the root cause of the problem and also that it leaves government constantly scrounging for money to fund these programmes.

Most of that money has come from foreign sources. Under government’s funding structure, foreign monies are to be applied to capital projects. In truth, they usually end up supporting recurrent expenditure, for which read wages. Akin to a man who orders bigger clothes on account of a pay rise, the Single Spine Salary Structure was introduced, anchored to the belief that as an oil exporting nation, it could bear the cost. That was not an accurate assessment.

The country has also not been helped by falling commodity prices. While the going was good, receipts from gold, cocoa and timber boosted national reserves and shored up the cedi. In a time of global financial uncertainty, investors had turned to commodities and Ghana was a happy beneficiary. Naturally

thus, with prices falling, it has found itself staring at diminished income and reserves and consequently, a spending gap.

The poisoned chalice presented by Ghana’ status as a middle income is another factor. While merely a “developing country,” it could access concessionary and a more willing pool of grants. With its new status, Ghana is expected to take better care of itself, by itself. However, the forgoing would show that it was not actually ready.

All of these would probably not have been as pronounced in their effect if the country could manage what little it has , better. A bloated public sector, an insistence on interventions by wasteful quangos and general inefficiencies have led to

government consistently spending a lot more than it actually gets back in true value. And that is even apart from the much more that is lost to corruption in procurement and government contracts.

Breakers and fixers Like all facets of national interest, the economy is a heavily political issue. Votes are won and lost on it and Ghanaian politicians are quick to claim credit and deflect blame. The current crisis has provided much fodder for the blame game. As the party currently

in charge of the economy, the National Democratic Congress has had much explaining to do. After all, one can claim the glass was cracked all one wants, but the hand from which it fell is the one of which questions are immediately asked.

While a blame game can be very satisfying for politicians, for those whose investments, jobs and livelihood depend on it, the big question is how the economy can and will be fixed. And for those people, there has been precious little. Blame has been abundant and explanation plentiful but very little has been offered by way of turning things around.

The solutions that the economy requires are in two forms. In the near term, it will need to get back in the black; either through a well thought out regime to re-align spending or through some massive inflows. In the long term, the Ghanaian economy must diversify, produce and export more – either tangible or intangible goods – in order to narrow its balance of trade and earn more to reduce its vulnerability to unforeseen external shocks.

Solutions at Senchi?For those who believe the government has run out of ideas, the government’s call for a National Economic Forum at the Royal Senchi Resort was a godsend. For those more charitable to the government’s cause, it was an admirable decision to recognise the need and potential for national solutions to national problems.

In the event, Senchi was more telling for what it failed to do than what it did. While a more detailed report of deliberations at the four-day conference is yet to be made public, the 22-point communiqué that was unveiled at the end of it was not the groundbreaking conclusions that many had hoped for.

“Blame has been abundant and explanation plentiful but very little has been offered by way of turning things around.”

Cocoa seeds being dried in the sun


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The Senchi Consensus, as it has come to be known, was a consensus on matters on which there had already been consensus.

In sum, the conference urged that the national interest guide all decisions (points 1, 2 and 22); that spending must be checked (points 5, 6 9 and 14); that indigenous entrepreneurs must be given some cover by government (points 3, 11 and 16); that tax administration must be strengthened (points 12 and 20); thatinvestment encouraged and facilitated (point 7); that infrastructure must be improved (point 15); and that national productivity needs a shot in the arm (points 4 and 18).

What is shocking is not that a consensus was found on these but that it was necessary to travel to Senchi to find it.

A cynic’s conclusion would be that if Senchi has anything to tell us, it is that it had nothing new to tell us. While an attractive conclusion, it would be wrong to write off those four days as a jolly for people addicted to government largess. Despite a boycott by the New Patriotic Party, the country’s largest minority party, the conference did manage to attract some heavy hitters from across the spectrum who put their views and opinions across freely and fiercely. That the consensus from the deliberations shocked no one should at once sadden and hearten observers of Ghana’s economic course. If the solutions are so uncontroversial, why have they not been applied before? On the other hand, if the solutions have such wide acceptance, perhaps government can now apply them knowing that there is a broad consensus behind it.

Of course, rhetoric has failed to match action before and it will be interesting to see just how committed this government – and/or others after it – will be to these proposals.

One step forward…What the consensus failed to note is that, economic crises in the country have become a seasonal problem associated with that very thing that is acknowledged as one of the country’s major selling points – elections. After the ballots are put away and a new president sworn in, what is often left is a hole in government

finance. Incumbents spend big to win, both over and above the counter. Spending targets are never met but exceeded. What this means is that new governments often find that housecleaning is their first major task. Until they also have to fight an election and the discipline goes out of the window. With this, the nation finds itself starting afresh after every election year.

Senchi would have had more historical significance, had it birthed a lasting solution to this problem. Stakeholders could

have addressed themselves to finding a shared commitment, expressed in a law, perhaps, that would stay the itchy spending hand of government during closely contested elections. The political parties might have opposed this or found a way to water it but at least the conversation would have begun.

A charge and a chanceWhile the memory of Senchi recedes, the hard graft of economic rebuilding must continue in earnest. With a consensus of sorts behind him, the President must take the opportunity to reimagine government that works for the Ghanaian people.

Government programmes are useful in the short term, but it is sustainable jobs and wealth creation that ultimately deliver the best results. The state must resist the temptation to solve every ill with a new programme; a new bureaucracy. Unpalatable

as it sounds, government should be seeking ways to divest itself of responsibilities that are better taken on by the private sector.

To solve its cash problems, government can auction off some of the long-held assets that are not yielding much to its owners and customers – the people of Ghana. It might feel good for the state to reel of a list of possessions, but if it means nothing more than paying staff at the end of each month, the wisest course of action might be to let go. Government’s energy would be better spent building robust infrastructure, reforming education and health delivery and enforcing standards and efficiency in the public service.

Government is quick to remind Ghanaians that the difficulties are only temporary. That may be true but they are also indicative of a permanent malaise. The current challenges show that the country is some distance from where it should be and that drastic actions with lasting results need to be taken. President Mahama and his team should see this as the pre-eminent challenge of their tenure, not only to take the country out of its current difficulties, but to set it on a path from which it would struggle to deviate – one of an efficient, lean state that is productive, fiscally responsible and with a truly resilient economy.

“Unpalatable as it sounds, government should be seeking ways to divest itself of responsibilities that are better taken on by the private sector.”


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IN F

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US Uneasy heads

5 men with the job of fixing the economy In times of challenge are reputations made and destroyed. Such a moment is here for the Ghanaian economy. Buffeted by challenges from various sides, the economy is currently front and centre of national discourse, keenly observed by local businessmen and foreign investors and is the cause of much concern for international agencies. Even as the need for recovery grows ever more acute, there are some who think that the search for solutions must go further and a panacea found that would inoculate the nation against challenges of the shape that it

presently faces. For this duty, five men bear more responsibility than most. By virtue of their positions, these men are at the frontline of the battle to save the Ghanaian economy. Their decisions, their fortitude and their statements will thus come to define their legacy and places in this country’s history. Even more importantly, however, their ability to perform in these straitened times, might well determine the future prosperity of the country they have been called on to serve.

Paa Kwesi Bekoe Amissah-ArthurVice President and Chairman, Economic Management Team

When President John Mahama chose Paa Kwesi Amissah-Arthur, then Governor of the Bank of Ghana to be his Vice President and running mate in the 2012 elections, the reasons seemed obvious to all. Even though the difficulties with the economy had not surfaced then, the new President recognised that the nation, fresh entrant to the club of oil producers, needed a steady economic hand to guide it across the choppy waters that were ahead. At the time, Dr Amissah-Arthur’s stewardship at the Bank of Ghana was considered a great recommendation. The currency was stable and sustained single digit inflation was one of the government’s loudest boasts. Armed with a Phd in economics, Vice President Amissah-Arthur had, apart from working in academia, been in public service for the better part of his working life. In the 1980’s, he was a key member of the team that guided the nation through the economic recovery programme, serving as special assistant to Dr Kwesi Botchwey, the minister of finance during the administration of the Provisional National Defence Council. He was later appointed deputy minister at the same

ministry and held the position through to the end of the National Democratic Congress’ first term in office under the Fourth Republican constitution. In 2009, he returned to public service when President Mills appointed him as Governor of the Central Bank. As Vice President, however, Dr Amissah-Arthur has gained little praise. Critics have accused him of not showing leadership on the economy, pointing out that the administrations economic performance does little credit to his standing as an expert. Regardless, the Vice President’s voice will remain a critical one in the search for solutions. Following the National Economic Forum, in which he played a key role, many now look to him to play a more inspiring role in ensuring that the declared aims are met.

Seth TerkperMinister of Finance

Seth Terpker has taken more flak than nearly anyone for the current crisis, particularly from members of the National Democratic Congress, from which the administration was birthed. Jittery that the crisis could cost them the next election, some have openly called for his removal, hoping that a more politically sensitive appointee would be more concerned about the political effects of his actions and non-actions. To his credit, the President has publicly expressed his confidence in his chief financial steward, backing the financial reforms that he is undertaking. Critics of the finance minister however, are not entirely off the mark. While a capable keeper of the public purse, he has shown little imagination in spurring growth in office; his experience does not show that he could. The University of Cape Coast (Bachelor of Commerce), Kennedy School, Harvard University (Masters in Public Administration) graduate and Chartered Accountant is an experienced tax administrator, even publishing a book on the subject. He has worked for the

International Monetary Fund in its Fiscal Affairs Department, leading technical missions to member states to improve organization, process and legislation for revenue institutions. He has also consulted for the IMF; Harvard Institute for International Development (HIID), Harvard International Tax Program (ITP); African Development Bank [AfDB], and the United Nations’ Committee of Tax Experts. Locally, Mr Terkper has worked as National VAT Coordinator and Deputy Commissioner in the National Revenue Secretariat at the Ministry of Finance and Economic Planning. In 2009, he was appointed as deputy to Dr Kwabena Duffour at the finance ministry, where he must have impressed enough for President Mahama to hand him ultimate responsibility in 2013. As minister, he has concentrated on reorganizing the country’s finances and financial expenditure rules. This is likely how he has earned the ire of colleagues and party people who crave a more free spending exchequer to fund crowd pleasing projects. While Mr Terpker is right to blank these requests, he may find that if he fails to find a way to spur growth and rather concentrates on protecting the little he has, even the patience of his chief supporter, the President, may wear thin as 2016 approaches.


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Governor, Bank of Ghana

Henry Wampah was sworn in as substantive head of Ghana’s central bank in April 2013, having been acting in that capacity since July 2012 when Vice President Amissah-Arthur vacated the position for his current billing. A graduate of the University of Ghana and Canada’s McGill University (where he got his PhD), he first joined the bank as a deputy manager in 1986. In 1996, he was appointed head of the bank’s research department, a position he held till 2001, when he was seconded to the West Africa Monetary Institute (WAMI) as Director of Research and Statistics. Even while he was at the Bank of Ghana, he also worked for the International Monetary Fund as a Special Appointee from May to December 1998, with the Monetary Operations Division of the Monetary and Exchange Affairs Department and the Africa Department. He participated in the Technical Assistance Mission on Monetary Operations and Banking Soundness to the Gambia, and also worked on a project on economic integration in East Africa. During his time at WAMI, he oversaw the implementation of the Macroeconomic

Convergence monitoring programme of the West African Monetary Zone (WAMZ), and was extensively involved in preparing the five member countries of the zone (The Gambia, Ghana, Guinea, Nigeria and Sierra Leone) for monetary union, in the areas of macroeconomic convergence and policy harmonization (monetary policy, statistics, fiscal policy and exchange rate management). He has also held various teaching appointments in Ghana and abroad. While patently qualified by virtue of academic qualification and experience, Dr Wampah’s tenure at the central bank has failed to win over critics. The period has seen a drastic fall in the cedi’s value and a return to double digit inflation. Measures championed by Dr Wampah to return the cedi to stability were roundly criticsed by economic analysts and observers. While Dr Wampah has since claimed some victory and asked for more time for the measures to take effect, the dollar has, tellingly, passed the GHc 3 mark. Unlike Mr Terper, however, his position does not seem to be in immediate danger. Which means that he can concentrate on restoring confidence in the currency and by extension, the Ghanaian economy.

Nii Moi ThompsonSenior Economic Advisor to the President

Of the President’s core team, Nii Moi Thompson is the most recent to be added. Drafted in as a replacement for Cadman Mills, the departing lead economic advisor,

Dr Thompson has settled seamlessly into his new role. Dr Thompson is a respected voice on the economy, having worked locally and internationally in various capacities. Most recently, Dr Thompson was senior economic advisor and acting deputy resident representative for programmes at the United Nations Development Programme in Pretoria, South Africa. He had also worked as chief technical advisor to the ILO in Ghana and Sierra Leone, as well as World Bank consultant in Liberia. He was a member of the UN Country Team, the UN’s highest decision-making body in its host countries, in all three countries. A member of the Convention Peoples’ Party, Dr Thompson has long been an influential voice on the Ghanaian economy, having served on at least two transitional teams under the fourth republic. His addition to the President’s team follows growing pattern of the bigger parties’ poaching competent staff from the smaller ones. As the most senior of the economic voices in government, second only to the Vice President, Dr Thompson’s views will wield great currency in the government’s economic direction. He is known to push for a radical change in the structure of the economy and favours a head-on approach to the difficult decisions that have to be made. A skilled communicator and debator, Dr Thompson is likely to become a chief public advocate of the government’s economic cause in the media, shaping the story even as the work is being done.

Sulley GaribaSenior Policy Advisor to the President

Along with the Chief of Staff and Executive Secretary to the President, this was one of the first positions to be filled when President Mahama took office. To some, this was an indication of the President’s desire to keep a keen eye on policy matters. Even more telling was his drafting of noted policy

expert and close confidante, Dr Sulley Gariba to fill the role. Political analysts will tell you that the President’s confidence is the necessary heft that a job needs; title and imagined organogram regardless. It is not just the President’s trust that he has going for him, however. Dr Gariba has been making his advice available to governments, regional and International institutions for the better part of three decades. He has served as senior advisor on institutional development for governance and peace-building for the Economic Community of West African States (ECOWAS) and advised the secretariat managing the first round Evaluation of the Paris Declaration between 2006 and 2008. Dr Gariba has served on several expert panels to assess the evaluation function in UNICEF, the UNDP, AGRA and the World Bank. A respected voice in civil society, he was the founding President of the International Development Evaluation Association (IDEAS) from, served as President of the African Evaluation Association and is a former Executive Director of a policy research and development think-tank, the Institute for Policy Alternatives (IPA-Ghana). Dr Gariba is the longest-serving member on Ghana’s National Development Planning Commission (NDPC) and was instrumental in the conceptualization and implementation of the Savannah Accelerated Development Authority (SADA), a government initiative that seeks to help deprived areas in especially the north of the country, catch up with the rest of it. While SADA and indeed, Dr Gariba’s role in it have been the source of much opprobrium for government, Dr Gariba retains the President’s confidence and his input will be key in making the choices that government makes on the economy.


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Despite impressive economic growth in recent times, gaps in the infrastructure sector still remained a major obstacle in making Ghana competitive, says Marie-Laure Akin-Olugbade, AfDB’s resident representative in Accra.

While Chinese companies are building the Bui Dam and the Sunon Asogli power plant to meet rising demand for electricity, major road, railroad and other infrastructure projects sit on the drawing board, as the government negotiates the terms of deals first signed in 2010 with the China Development Bank and the Export-Import Bank of China (China Exim Bank).

But the problem, says Franklin Cudjoe of the IMANI Center for Policy and Education, is that Ghana has very little due diligence. Development of the railway lines along the Central and Western corridors, to be financed with a proposed USD 10.4bn China Exim Bank loan, also continues to be delayed.

Ghana, in 2010, achieved its long-held vision of becoming a middle-income country. The Government’s Vision 2020 plan launched in 1995 targeted higher growth rates for the country with the aim to transform Ghana from a low-income to a middle-income country within one generation.

While Ghana’s real GDP growth rates had, according to the World Bank, steadily improved over the previous three decades—from 1.4 percent in the 1970s to 5.5 percent for the past decade—a GDP rebasing exercise recalculated how to measure the economy and Ghana suddenly found that its official GDP per capita was not under USD 800 as previously thought but rather USD 1,363. This accelerated leap put the country into a new income category overnight. While the experience highlights the weakness of economic statistics, the change has real consequences for Ghana, the most immediate and direct impact of which is the change in its eligibility for concessional finance from international lending institutions, including the AfDB and the World Bank, which has been the

country’s most important creditor for the past three decades.

A concessional loan, otherwise called a soft loan, is a loan that is offered with longer repayment terms and lower interest rates than might otherwise be offered by the market, often geared towards low-income countries. The World Bank’s soft loan window, the International Development Association (IDA), restricts lending to the world’s poorest countries, with eligibility

defined today as a precise per capita income level. Many other creditors, including a number of bilateral donors, focus their aid programs on the most poverty-stricken countries and use these categories as informal guides for poverty targeting.

The end of concessional loans for Ghana

New status; new challenges

Ghana needs to spend $1.5 billion a year for a decade to fill infrastructure gaps. But so far, oil money is not leading to the much-needed construction boom, forcing the African Development Bank (AfDB) to designate the country as an infrastructure gap country.

Martin-Luther C. King

Seth Terkper (Minister of Finance & Economic Planning)

“Ghana suddenly found that its official GDP per capita was not under USD 800 as previously thought but rather USD 1,363.”


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While not a formal part of international categorization, oil producers are also often viewed differently. Oil revenues are typically considered an unearned income stream that many donors consider when weighing recipient choices. Although this is often informal and not strictly comparable, oil income affects perceived trade-offs and thus likely affects donor allocation decision.

Currently, IDA is Ghana’s single largest donor, with over USD 250 million dollars in flows per year. Barring a massive shock to its economy or a change in IDA rules, Ghana should expect to graduate out of IDA within the next decade, possibly within the next three to five years. Once a country breaches the operational income threshold for three consecutive years, it begins graduation, first losing access to the most concessional terms, then losing access to IDA funds altogether. Along with IDA lending, crossing the LMIC income threshold will probably deprive Ghana of access to concessional lending from the AfDB and eventually the IMF as well. These two institutions provided a combined assistance of over USD 250 million dollars annually since 2010. Altogether concessional financing from IDA, the IMF, and AfDB accounted for USD 570 million dollars in 2010 or 34 percent of total ODA to Ghana.

Specifically, the AfDB has a three-tier classification system to determine the eligibility to borrow from its concessional window. That classification closely mirrors the World Bank’s classification system. This means in all likelihood that upon graduating from IDA. Ghana would lose Category A status as it transitions from IDA-only to Blend (or Category B), and finally to the IBRD (Category C). The AfDB’s concessional lending is reserved for Category A countries, and poverty-reduction programs in Category B countries.

Also, eligibility for the IMF’s concessional financing is closely tied to IDA income thresholds. Eligibility for PRGT (Poverty Reduction and Growth Trust) funds—the trust that pools the

IMF’s concessional lending programs—like IDA, is determined according to income and credit-worthiness. In fact, countries graduate out of PRGT lending once they reach two times the IDA threshold or have the capacity to access international financial markets.

Unlike IDA graduation, which requires both creditworthiness and income, fulfilling either criterion could be sufficient to push Ghana out of concessional IMF lending. Once again, while clear criteria guidelines exist for graduation, IMF management reserves significant discretion in determining a country’s graduation by deciding when countries are deemed stable and not vulnerable to shocks. While under projected IMF growth rates Ghana would only reach twice the IDA per capita income threshold in 2027, it could meet the credit-worthiness requirements much sooner, thereby losing access to IMF concessional funding.

Similarly, the Millennium Challenge Corporation of the US government determines eligibility for participation based on

countries that outperform their income category peers in a range of indicators. Once countries are deemed eligible, they begin negotiations with MCC staff on a 5-year compact of agreed projects.

Ghana was one of the earliest recipients, with a five-year USD 547 million compact signed in August 2006 that focused on agriculture, rural development, and transportation infrastructure. That compact expired in February 2012, but the MCC board voted in January 2011 to select Ghana as eligible for a second

compact. Ghana’s financial year 2012 (FY2012) scores were highly positive, with the country passing 17 out of 20 indicators (failing only trade policy, fiscal policy, and primary education expenditure).

This means Ghana will continue to be scored against low-income countries until it breaches this level, possibly around 2018 using IMF projections and UN population projections.Thus it is highly unlikely Ghana’s income-group change will impact MCC resources, unless the country attempts—and MCC is willing to consider—a third compact.

Additionally, whereas the UN uses a ‘least developed country’ (LDC) classification for 48 countries, 33 of which are in Africa, to differentiate certain rules, however, Ghana is already excluded from this list, so its UN status will not be affected.Also, the World Trade Organisation (WTO) uses the LDC category to allow member countries to opt out of certain trade provisions, but this has never applied to Ghana.

“...IMF management reserves significant discretion in determining a country’s graduation by deciding when countries are deemed stable and not vulnerable to shocks.”


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Ghana Entrepreneur Awards 20131.) Sam Ato Gaisie (Founder/President), Entrepreneur Foundation Ghana delivering the opening address. 2.) Aerial view of guests 3.) Mr. Kwabena Anokye Adisi, CEO of Empire Entertainment adjudged the Entertainment Entrepreneur of the Year posing with his team. 4.) Mr Samson Deen, CEO of African Origin Sports Travel and Tours received an award for being the Young Entrepreneur of the Year. 5.) The Lifetime Entrepreneur of the Year went to Dr. Michael Agyekum-Addo, CEO of KAMA group ltd. 6.) Promising Entrepreneur of the Year went to the CEO of Horseman Shoes, Mr. Tonyi Senyah. 7.) Alhaji Mustapha Oti Boateng, CEO of Chocho Industries Co. Ltd receiving the award for being the Overall Entrepreneur of the Year. 8.) Mr Mustapha addressing the gathering.


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ECOBANK Ghana launches ECOBANK Direct1.) Mr. Albert Essien Chief Executive Officer of the Ecobank Group delivering his address during the launch. 2.) Managing Director of Ecobank Ghana, Sam Ashitey Adjei speaking at the event. 3.) An official of the bank demonstrates the service to Vice President Amissah-Arthur, Governor Kofi Wampah and others. 4.) Touch-screen tablets for accessing Ecobank’s internet banking. 5.) Video conferencing suite to access expert advice in real time from staff located at other branches. 6.) Patrick Akinwuntan addressing the gathering.


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Ayuureyisiya Kapini Atafori

Can another national airline survive the competitive aviation industry?

Moves towards setting up a national airline have been on the drawing board for a very long time. There seem to be persistent demands for the setting up of a national carrier in the competitive local aviation industry. But there are many others who oppose the national airline agenda.

hat arguments do Transport Minister Dzifa Ekua Ativor and those who make a plea for the re-carnation of the country’s premier Ghana Airways, and perhaps the short-lived Ghana International Airlines (GIA),

put forth? Indisputable is the fact that calls for the running of a national carrier has been increasing of late. There was a report early May that the Ministry of Transport is expected to choose a transaction advisor soon to advise the government on the founding of a new national airline. The airline will be run on a public-private partnership (PPP) basis. The transaction advisor is expected to provide professional services to government on the ownership structure, funding, business model and routes, among others.

The Chief Director of the Transport Ministry, Mr. Twumasi Ankrah-Selby, revealed that the Ministry was putting finishing touches to the selection of a winner from the short-listed field of six. Mr. Ankrah-Selby said the government would opt for a private majority owner and manager arrangement. Government has been keen on creating a new national carrier to tap into the growing aviation industry in Ghana. Government’s interest is premised on creating jobs, given the labour-intensiveness of the aviation industry.

The country’s aviation industry has been growing at an annual rate of 10 percent in the past ten years. International passenger throughput for the approximated 28 airlines flying and plying their trade in Ghana hit about one million in 2013. The major

airline operators include KLM, Emirates, British Airways, Arik and Delta. “Looking at the growth in the sector over the last decade, if we have a national airline it will generate revenue for the state and help keep some of the profits made by airlines in the country,” Mr. Peter Addai, Air Namibia’s Country Manager, surprisingly told a local business tri-weekly last May. Surprising because a national airliner will be a competitor of Mr. Addai’s employer.

More surprising when another competitor wants to help the government to set up a national airline. It was reported on February 13 that Delta Airlines would support the government’s plan to create a new national carrier to tap into the growing aviation industry in the West African sub-region. Mr. Perry A. Cantarutti, the Senior Vice President for Europe, Middle East and Africa, said the United States carrier would partner government to create a national carrier. “Is something that Delta would be willing to entertain. Having a robust local aviation industry and national airline is really to our benefit. The geography of Accra is well-suited to serve that of western part of Africa so if that can be developed as an offering it would be complementary to what Delta does,” Mr. Cantarutti remarks.

Michael Yared, Area Manager (Ghana) of Ethiopian Airlines, said, “It is significant for the country to have a national carrier. Ghana’s economy is growing and a national carrier will boost that growth. Air traffic is growing; why should Ghana lose out on it?”


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a national carrier. The bid to launch a national carrier follows two previous state-owned carriers which collapsed because of mismanagement. Ghana Airways was founded on 4th July, 1958 but went under in June 2005. GIA, the last national carrier which was 70 percent owned by government, ceased operations in May 2010 amid financial challenges and a shareholder dispute. GIA’s predecessor, Ghana Airways, was once a respected regional and international carrier. Years of mismanagement as a result of nepotism and cronyism, however, weakened the airline, leading it into financial doldrums. The airline was liquidated in 2005. Given this history, analysts believe a new national carrier should be handled by private managers, keeping only minimum state involvement.

Even so, in October 2013 some experts hailed President John Dramani Mahama’s ambition to re-establish a national airline. The Airside Operations Manager of Ghana Airport Company, Mr J.T Amoah, commended President Mahama for negotiating with international airline operators to re-establish a national carrier. Speaking to Radio Ghana, Mr Amoah said the country is already endowed with professional pilots and engineers who could stand the test of time provided there would be less political interference in the management of the airline. Another expert, Mr. Kofi Gedza, said the re-establishment of a national airline was overdue, lauding the President for the initiative and suggesting that a national carrier must be competitive to be sustainable. At a meeting with the leadership of Delta late last year, President Mahama expressed his vision to make Ghana a hub of aviation for Africa, requesting a win-win partnership with experienced international airlines to establish a national airline.

In November 2013, Mrs. Ativor told Accra-based Citi FM that the country is cash-strapped to invest in a wholly-owned national airline. The Minister had earlier last year underscored the need for a national carrier in the growing economy. In an interview with Radio Gold, an Accra-based FM station, last November, Minister Ativor said plans were underway to purchase a new airline to give Ghanaians the opportunity to boast of their own national carrier. She assured her compatriots that the “government has started a process of setting up a new

national carrier…As you may recall, in the State of the Nation address of His Excellency the President; he made it clear that we will be setting up a new national carrier based on a PPP basis. So, we needed a competent experienced company to guide the process so that we don’t repeat what happened earlier on. So, the process has begun.”

Despite the enthusiasm for the setting up of a national carrier, the founder and Chairman of Antrak Group, a domestic airline, Alhaji Asuma Banda, threatened to go to court if the government established a national airline. Alhaji Banda contended that a state-run airline would lead to, as history has proved, wasteful dissipation of public money. “If the

government goes ahead to establish a new airline, I will challenge them in court. We have no money to throw away. It won’t work,” he warned. Alhaji Banda’s stance appeared to resonate with the sentiments of many Ghanaians, following two failed attempts by the state to run a national airline.

Writing on 14th February this year on the lessons Ghana could learn from Emirates’ success story, Belinda Ayamgha observes: “The only reminder for Ghanaians today that Ghana once had an air carrier that flew high the national flag and that was the pride of the West

African sub-region is, perhaps, the recently opened La Tante DC 10 Restaurant at the Kotoka International Airport. Certainly, this initiative which has made good use of the decommissioned aircraft that once flew in the Ghana Airways fleet is laudable and would help boost the nation’s tourism industry, but at the same time it is a sad reminder of the failure of the airline and its successor, Ghana International Airlines. Many experts and non-experts alike have given several reasons for the collapse of the airline, most of which point to mismanagement of public entities; the tendency for people at the helm of affairs in public organizations to assume that it is their right to take their share of the national cake without recourse to the well-being and success of the organization, among other factors… There are public or state-owned organizations that have been run successfully in other parts of the world and from which we can learn a few lessons, especially with recent calls for the establishment of another national airline.”

Instructively, Zambian Minister of Transport Yamfwa Mukanga told a local radio station last March that the government has set June 2014 as the deadline for establishing a state-run airline. Zambia Airways collapsed in 1994. Zambian President Michael Sata has vowed to ensure that a national airline was established. Should Ghana take a cue from Zambia? With the plan to create a new airport while KIA is being refurbished to improve and attain current and growing international standards and practices and the present boost in domestic aviation, a national airline may not be a bad thing in itself. But its survival in an increasing highly competitive aviation market cannot be guaranteed.

GIA’s predecessor, Ghana Airways, was once a respected regional and international carrier. Years of mismanagement as a result of nepotism and cronyism, however, weakened the airline, leading it into financial doldrums.

Ghana’s former national carrier - Ghana Airways


As is common in the culture of the people, Tema Oil Refinery has passed through at least two naming ceremonies. A boy may be born Kofi Mensah. At school the catechist-cum-headmaster in the effort to Christianize little Kofi may enter his name in the school register as Joseph Badu - Badu being the father’s name.

In later life, probably, at the senior high school or tertiary level, Kofi may localize his name by calling himself, Kofi Badu Mensah.

So has the company, TOR, metamorphosed through the years. It was originally named the Ghanaian Italian Petroleum (GHAIP) Company under the Companies Ordinance (Cap 193) on December 12, 1960. It was 100% owned by the Ente Nationalie Indrocarburi (ENI) Group of Italy. In April, 1977, the Government of Ghana bought all shares of GHAIP and became the sole shareholder. In 1990 the name GHAIP was changed to Tema Oil Refinery.

TOR, with the vision of becoming a first class petroleum refinery in Africa, is the only refinery in the country authorized by its regulators to process crude oil and market petroleum products.

Its mission of providing quality petroleum products and services primarily in Ghana mainly through the refining of crude oil in a safe, efficient, cost effective and environmentally

friendly manner to satisfy customer needs and to increase the value of the shareholder has, however, become a total anathema to many a Ghanaian. Instead of satisfying customer needs and increasing the value of the shareholder, TOR has grown to become an albatross on the finances of the shareholder—corporate Ghana.

Like any other business entity TOR was established among others with the objective of being self-sustaining. But sad to say, for the major part of its existence, the company has behaved like a spoilt child living on the largess of the Ghanaian tax-payer. In terms of profitability there is nothing to write home about as far as TOR is concerned. At a point in time, TOR owed trillions of cedis. The situation was such that a committee was appointed by the government to look into the affairs of the company.

Ghana’s first president, Dr. Kwame Nkrumah, in his quest to modernize the country to enable her rub shoulders with Europe and America, immediately

after independence in 1957 embarked on an industrialization journey by opening the country to foreign investors. Among the numerous companies

established under the rapid industrialization programme was Tema Oil refinery (TOR).

Petro Saudi to the rescueTOR’s operational struggles

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An exasperated President John Agyekum Kufuor, in January, 2003, told a People’s Assembly audience at the Accra International Conference Centre that the problem facing the beleaguered TOR was a very complex one and not something that could be resolved easily.

He said what government had done was to set up a committee to do an in-depth survey of the situation and assured the nation that the committee had gone deep into the problems and the government expected it to come up in the near future with a comprehensive solution to the crude oil situation.

Though the government as the sole shareholder has been doling money at various times to TOR to make it operational at all times, the government’s sustenance efforts seem not to be enough. Since 2009 the company had been in a fight of its life to replace aging machinery and obtain financing for crude oil imports. For instance, between April 2013, and October 2013, the 45,000 barrel-a-day facility was forced to shut down three times; a very disturbing situation against the background that it had only resumed work in April 2013, after several months of break.

The way forward therefore seemed to be an alternative or complementary source of funding. “Government alone cannot finance the refinery’s activities,” TOR’s Managing Director, Ato Ampiah said on October 3, 2013.

Most Ghanaians therefore heaved a sigh of great relief when President John Dramani Mahama during the state of nation address announced that “a joint venture agreement between TOR and Petro Saudi is being finalized to revamp the

operations of our refinery. This will reduce the huge amount of foreign exchange spent importing finished products”. President Mahama may not have said it in so many words but a lot of Ghanaians are upset that funds needed for other sectors of the economy are being wasted on a non-performing state asset.

Industry watchers see the joint venture with Petro Saudi as a turning point for the better in the life of TOR. TOR has shown by its practices and performance over the years requires not only funds but dynamic structural re-organisation and profit-oriented management acumen which Petro Saudi, from its operations elsewhere on the globe, seem to be imbued with.

Petro Saudi is a privately owned oil exploration and production company, with offices in Saudi Arabia, England and Switzerland. It is reputed to have built considerable in-house geoscience, operational and commercial capability, and has forged strong relationships with industry-recognised external expertise.

Founded in 2005, Petro Saudi is involved in oil and gas projects in energy-producing regions around the world and very conversant with the complex global systems that define the energy industry and has the reputation of forging strong relationships in every country that it does business.

Tarek Essam Ahmed Obaid, the company’s Founder and Chief Executive Officer, is an American educated and experienced business leader, who has been a founder and investor in a variety of businesses in the financial services, technology and real estate industries.

“TOR by its practices and performance over the years requires not only funds but dynamic structural re-organisation and profit-oriented management acumen...”

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These are all valid points to be raised by the populace to buttress the issue of low patronage of insurance generally in the country. Various surveys peg the insurance cover in Ghana at various levels. However, a standout point in all the surveys is that Ghana is heavily undersubscribed in terms of insurance cover. Alarming as it seems, the industry’s poor performance is attributed mainly to low patronage, limited knowledge of the insurance industry, lack of confidence and weak regulatory framework governing insurance practices. Interestingly, Ghana also has one of the heaviest budgets for funerals. The average local funeral of a Ghanaian can consume up to six months of the regular income of the family members. Well-to-do family members are the most hit by this interesting but worrying trend. Considering this huge funeral cost one then wonders why the citizenry is not embracing insurance particularly life assurance since it helps immensely to shelter some or all of these financial obligations of the family members of the deceased. The issue of trust and accessibility can all be blamed for the low patronage of this crucial service. Insurance companies are trying their best to clarify and demystify this service.

Another lifesaver also helping to make insurance, particularly life assurance, more accessible to the public is mobile insurance also called M-Insurance. Mobile insurance is a completely new trend of service provision in the country. One can put it as

mobile operators providing and fronting insurance services to their customers.

In 2011, two mobile network operators became new distribution channels for micro insurance policies, launching these services in conjunction with partners from the insurance sector. The increase in demand has proven that insurance can be a very successful venture in Ghana despite its very low penetration rate and has also further strengthened the notion that mobile phones can be a transformative technology in Africa.

First to market in the Ghanaian mobile insurance segment was mobile network operator Tigo, global non-profit micro-insurance intermediary, MicroEnsure and local insurer, Vanguard Insurance. The offering is a free life insurance product available to any Tigo subscriber. Provided they spend GHc 5 a month on their service, a customer is insured to an amount of GHc 200 for themselves and another GHc 200 for an additional beneficiary, be it a family relation. Through this scheme alone, Tigo is able to lure in more customers to spend more money and stay loyal. Vanguard equally gains new potential customers as well as the premium income from those who choose to add it in, while MicroEnsure gets a percentage of the premium income.

Going mobileTech boost for Ghana’s insurance sector

Insurance is a relatively unknown concept to the average Ghanaian. Be it life assurance, motor or burglary insurance, it is perceived as an unnecessary venture undertaken by only those with money to waste. There is also the issue of the trustworthiness of insurance companies. With each insurance company proclaiming itself as the fastest in terms of payment of claims, one wonders why claims generally take so long to process when the unforeseen calamity occurs.

Georgina Adjei


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CEA month after, the service’s launch in February 2011, MTN,

largest telecom provider in Africa and Ghana announced a partnership with local insurer UT Life. Unlike the Tigo offer, the insurance is not included in the usage of airtime service but can be purchased as part of MTN’s mobile money suite for a value of GHc 1 per month.

The pay-outs vary from GHc 500 to GHc 2000 depending obviously on the premium pay. Both Tigo and MTN offer a fast claim process of 3 days and 10 days turn around between claims and pay-out respectively. Now this is a crucial gain for the insurance sector as delayed payments of claims (which can even last for months and years) has lead to people losing their trust and confidence in the sector and ultimately, the sector’s poor performance. So offering a quick service could be a luring signal displayed to the public. At the beginning of this year, Airtel also offered it platform to extend its customers with the partnership of Enterprise Life and MicroEnsure. With the growing number of networks joining the insurance industry, it provides a larger market size for the industry to exploit and utilize. A recent survey showed that 70 percent of respondents in Ghana would prefer an insurance policy from a mobile operator than a direct insurer, according to a report on mobile insurance by the GSM Association.

The various mobile networks have bridged the gap between the insurer and the public. Firstly, they utilize the medium of advertisement via telecommunication such as phone calls and text messages unlike the use of agents to carry their message. Also, there are over 24 million Ghanaian mobile phone users affiliated to these mobile operators. These mobile networks have the personal details of their subscribers, so advertising to their users presents them with a larger potential market than the insurer directly will ever have.

According to the Consultative Group to Assist the Poor (Cgap), housed in the World Bank, Tigo has more than doubled the size of the insurance market. Tigo’s family care programme provides insurance for nearly 1 million clients, taking the number of adult Ghanaians with some kind of insurance to more than 1.7 million. At the launch in 2010, only an estimated 5.4 percent of adult Ghanaians—around 720,000 people—had any kind of insurance, a quarter of which was informal. Tigo Family Care today provides insurance cover for nearly a million clients, an estimated 93 percent of whom have no other insurance cover.

Thus Tigo Family Care has more than doubled the size of the insurance market and extended basic life coverage to 978,000 Ghanaians that are otherwise uninsured.

In a GIZ study on the Ghanaian micro insurance sector, 61 percent of subscribers were satisfied with the product, 33 percent said “somewhat satisfied” and only 4 percent said were “not satisfied”. These initial results are nothing if not compelling. Ghana’s National Insurance Commission (NIC)

certainly seems to think so, awarding Tigo Family Care Insurance as the most successful micro insurance product in Ghana in November 2012.

In addition, these various mobile networks have designed their insurance policies to clearly suit the standard of living of most Ghanaians. From the economic point of view, the insurance policies presented by the mobile operators is relatively affordable as against that of the insurers directly. “There is huge demand for insurance products, not just in Ghana but in [all] emerging markets,” said Gustaf Agartsson, Bima’s chief executive. “There is a general perception that insurance is for people with high incomes. But we come in with a product for people with low incomes – and customers appreciate a free product.”

At the launch of a free insurance product for Airtel customers by Airtel Ghana, Adjoa Boateng, Country Manager of MicroEnsure Ghana believes that, “This combination of insurance products, all offered for free, is unprecedented in the industry, and we take pride in introducing a cutting edge micro-insurance product here in Ghana.” Equally, their method of subscription is less tedious and stressful. From the comfort of your location, an individual could register using their handset or simply call the customer helpline for aid and instructions. Mobile insurance can and should be seen as a very important piece in this insurance chess game. It has brought along with it the trust, convenience and accessibility

formerly missing from the game. It therefore has the undisputable potential to increases significantly the patronage of insurance covers in the country particularly life assurance. It is no doubt that insurance industry has had its underserved share of poor growth and retrogression. However, with the introduction of mobile operators into the active business of the insurance industry has improved and will continue to facilitate the growth and success of the industry.

“From the economic point of view, the insurance policies presented by the mobile operators is relatively affordable as against that of the insurers directly.”


4th International Conference on Financial Management and Economics - ICFME 2014The 4th International Conference on Financial Management and Economics (ICFME 2014) will provide an international platform for communication and exchanging ideas about recent research advances and innovative practice. The conference will bring together leading academics, active researchers and inspiring practitioners in the areas of financial management and economics. Date : 3rd to 4th July, 2014Venue: Plymouth UniversityContact: For any inquiry about the conference contact organisers at: [email protected]

Africa Media & Democracy Conference (AMDMCI) 2014The AMDMCI Conference which is organised bi-annually aims to examine the broad impact of the media on democracy. The theme for the Accra Conference 2014 is “Media, Democracy & Development.” The event is open to academics, media industry professionals, government agencies, policymakers, regulators, UN agencies, donors, civil society organisations, independent consultants and research groups and studentsDate : 6th to 9th August, 2014Venue: Kofi Annan ICT CentreContact: Barima Adu-Asamoa on +233 20 0723197 or [email protected]

Construction Industry Safety and Compliance Indaba & Exhibition 2014 (CISCIE) The Construction Industry Safety and Compliance Indaba & Exhibition 2014 (CISCIE ) will be running the industry-leading event addressing the growing issues of safety in South Africa’s construction industry. The Indaba seeks to grow into an industry-led platform bringing together all stakeholders – government, labour and industry companies to pave the way and create a culture of safety and compliance.Date : 24th to 25th July, 2014Venue: Emperors palace, Johannesburg, South AfricaContact: Visit www.mercatiqueconsulting.co.za/construction-industry-safety-and-compliance-indaba-exhibition/ for further details

Ghana Extractive Industry Safety Conference 2014 The Ghana Extractive Industry Safety Conference (GEISC) 2014 has the central objective of identifying health and safety issues, risks and opportunities associated with the extractive industry, new trends, standard innovations and assessing their impacts on economic development using health and safety as a rally point, the conference will provide invaluable platform for networking and business opportunities in Ghana, West Africa and the world.It will be a major platform for international and local investors, companies, exporters, trade consultants, SMEs, national regulators, government dignitaries, trade unions and international representatives.Date : 22nd – 24th of October, 2014Venue: Takoradi, Western Region, GhanaContact: Call organisers on +233 312022385 and +233 20 4355249 or email: [email protected]

Annual International Conference on Law, Economics and Politics (AICLEP 2014) The annual International Conference on Law, Economics and Politics (AICLEP) provides an opportunity for academics, practitioners, consultants, scholars, researchers and policy makers, with different backgrounds and experiences, to present their papers in the conference and to discuss their experiences, new ideas, research results, as well as any practical challenges encountered and/or the solutions adopted during their workDate : 1st to 3rd September, 2014Venue: University of Oxford, Green Templeton College, Oxford, UKContact: Call 0044 131 463 7007 or email organisers at: [email protected]

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2nd Annual International Successful Leadership SummitBuilding on the inaugural conference, which took place in 2013 – the 2014 International Successful Leadership Summit aims once more to bring together leaders from around the globe and across different sectors to share leadership best practice and gain the roadmap and tools in the area of leadership to increase business productivity and create a facilitated forum to generate new business opportunities.Date : 17-18 June, 2014Venue: London, United KingdomContact: Call Sam Atanda on 01895546238 or email organisers at: [email protected]


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Billion dollar earnings from tourism have been long looked forward to. In 2008, relying on the African Cup of Nations it hosted, the government announced that it expected a million visitors, bringing in over a billion. In the event, that was not to be. But that is not to say that there hasn’t been progress along the years.

Tourist arrivals in Ghana have been increasing steadily over the last couple of decades. From nearly 114,000 in 1988 to 993,600 in 2013, arrivals have been growing at an average of over 20 percent, while revenue from the industry grows annually by about 41.3 percent. This reflects a global trend, with tourism currently accounting for about 10 percent of global GDP and generating 214.7 million jobs. Tourism is adjudged the fastest growth sector of the 21st century. Evidently, tourism is a significant revenue generating industry, which can become a ‘gold-mine’ if properly harnessed.

The focus on tourism represents the desire by various administrations to diversify sources of revenue for the country. Ghana has had some difficulty moving away from a mainly raw material-exporting country. This has led to it being overly vulnerable to swings in commodity markets, while a consistently heavy and increasing import bill mean that foreign exchange is scarce, in demand and under pressure. For these reasons, tourism, with the potential to bring in needed foreign exchange and boost the local services sector, is an important, if obvious area to focus on.

Apart from icreased foreign exchange, tourism can help boost economic growth, job creation, income and revenue distribution and balanced regional development to improve the lives of citizens.

Luckily for it, the country is built for the leisure visitor. Green in many parts, possessed of a rich culture and

a haven of peace and stability, Ghana shoud not struggle much to attract visitors. However, like Aesop’s goose which needs to be healthy and strong to continue laying its golden eggs, Ghana must invest in the industry to increase its production capability to generate more revenue. Indeed, the argument could be made that it has underperformed in the sector.

There are a number of reasons for this. While its natural features provide

In May this year, the minister of tourism, Elizabeth Ofosu-Adjare, announced that the government expected to earn some USD 8.7 billion from tourism by 2027. Mrs Ofosu-Adjare’s optimisim must have been buoyed by the fact that in 2013, having attracted over 900,000 visitors, Ghana earned USD 1.7 billion from that sector. That figure represents 6.9 percent of Gross Domestic Product for the year.

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Brightening the corner How Ghana can make billions from tourism


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much for the visitor, consistent under-investment has left the country’s infrastructure in a generally deplorable state. Roads to attractions are poor; power and water are often not available and erractic when they are. Tourists may like to see a waterfall, but they will not like to be endangered on their way to it.

While near tour destinations, visitors are also liklely to find that hospitality facilities are inadequate and expensive. Many of the attractions are cited away from the capital. The private sector, not convinced of the feasibility, has shunned investment in hospitality in these areas. Naturally, this has led to a gap in that market, with few, local operators providing substandard services at high costs. This is apart from the poor service that even some of the bigger names in the business offer their customers.

The sites themselves are mostly undeveloped. It seems that they are expected to attract vistors on their natural steam, with little attempt to augment their attractiveness. Promotion for the individual sites is also poor, which in the age of social media, seems like willful negligence.

Travel into Ghana itself is quite expensive. As vistors to the country remain at relatively low levels, airlines are yet to benefit from the economies of scale that would enable them to charge lower rates. This affects the number of vistors coming in. Travellers are likelier to opt from cheaper and more popular destinations in East Asia, for example.

Other challenges include competition from other sectors such as oil and gas,

stringent visa regime, poor sanitation and heavy traffic.

Above all, there hasn’t been an effective, overaching policy to boost tourism and achieve the stated aims.

With the coming into effect of the National Tourism Development Plan (2013–2027), however, there are grounds for some optimism. For one thing, the plan recognizes the very real issues that have prevented the sector from achieving its full potential.

Under the plan, steps are to be taken to brand Ghana’s tourism sector; consolidate tourist sites and expand underdeveloped sites, reduce barriers, build capacity among staff of the ministry.

While these are important, the key thing will come down to, as always, investment. Even the most determined political commitments seem to wilt at the implementation stage once the budget is presented. At the moment, with the dire economic straits it is in, government has a better excuse than at most periods in the country’s history, to shy away from increased spending. A better exuse but nevertheless, a poor one.

To fully realize the benefits of tourism the government of Ghana must find a way to implement the structutal,

infrastructural and policy reforms that the country must undertake to increase arrivals and spending.

Indeed, government has an available option in the private sector. It is time to use its power of policy to drive investment into the tourism sector.

Many operators in the sector complain about taxes, over-regulation and a general inability of government to recognize and complement their efforts. This is inspite of the readiness and demonstrable capacity of several operators – both local and international – to deliver.

For example, management partnerships can be struck with private sector companies in respect of some of the

tour destinations. This will go a long way to solve problems of promotion, maintenance and the commercial sustainability of those sites. While some of these agreements are already been explored, more can be done to attract top level operators for the best results.

The same goes for infrastructure. Government has shown a willingness to employ private-public partnership in the delivery of infrastructure. It will be appropriate, in the light of its intention to derive maximum benefits from the sector, that infrastructure projects in tourist areas be among the urgent that are tackled under the PPP model.

Just as importantly, hospitality providers will have to be incentivized to provide top-notch facilities that can attract high-spending vistors from all over the world. Lower taxes and incentives to cite in particular areas, as well as help to train and retain staff, would be a boon to the hospitality sector.

All of these would not be meaningful without the cooperation from the private sector. Government would have to actively seek their support and sell them the vision to enable them fully participate in its achievement. Which could mean that government’s first challenge in bringing more people into the country would be, appropriately, one of communication.


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The global e c o n o m y has grown

at an annual rate of 3.2% in the first quarter of 2014, half a point less than we were expecting three months ago but with no interruption to the slight improvement that started in 2013. Nor can we identify any events that have a significant probability of hindering the recovery underway, although there are geopolitical risks.

The growth expectations in developed economies are supported by the favourable combination of political and monetary policy and by financial conditions that in general terms are not acting as a brake on activity. However, we have revised downwards our growth forecasts for the emerging markets, mainly as a reflection of cutting our estimations for China, where we are now expecting GDP growth of around 7.0% in 2014-15, vs. 7.5% previously. This change mainly reflects the renewed impulse for the introduction of policies oriented on a medium-term horizon to reduce the existing vulnerabilities and increase the role of the market in assigning economic resources, rather than continuing to deal with the slowing growth in the short term.

China is the second-largest economy in the world, but the largest in terms of its absolute contribution to global GDP growth. The commercial impact of the slower growth in demand from China will vary as a function of the dispersion in the weight of exports to China. South East Asia, some Andean and African economies and Germany in particular - countries that every year export more than 2.5% of their respective GDPs - could be more vulnerable. Altogether, the change of focus in economic policy, the drive for reforms that increase the role

of the markets, the emphasis on consumption over investment and the concerns over the level of debt reduce the probability of a hard landing. An event such as this could open additional global contagion channels apart from trade such as an increase in financial volatility, although so far there is no evidence of this type of contagion.

An increase in US interest rates is getting closer. Although this will not happen immediately, the likelihood is that it will

take place sometime after mid-2015. Just because it is widely expected, this does not mean that there will be no impact – as we saw with the Fed’s tapering announcement in May 2013 that it would rein back its balance-sheet expansion as the recovery consolidated. This led to a rebalancing of global capital flows, with outflows from higher-yield and relatively higher-risk markets into markets and assets in the developed economies. We could see something similar if investors suddenly

discount Fed tightening, which in itself is a positive move, as a signal of growth. This event is reflected in our forecasts, and we estimate that the impact in terms of financial uncertainty will be contained and diverse: contained because after the rebalancing of global portfolios between May and June last year, there is less additional potential for market correction in a scenario of global recovery; and diverse because as we saw then, exchange rates and general market access conditions moved as a function of the solidity of macroeconomic policies and of the size of the external imbalances of the affected economies, particularly the EMs.

A third reflection of the present diversity in the economic scenario is linked to the reaction to a lack of inflationary pressures. The most developed economies (the US, Europe

Global growth, but heterogeneous paths, policies and vulnerabilities – BBVAGlobal research group, BBVA has published its predictions for second half of the year, emphasizing that growth is set to continue, which risks remain. We publish an extract from the report.

“The most developed economies (the US, Europe and Japan) are all going through a phase where there are no significant inflationary pressures, which have undoubtedly been too low for too long.”


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significant inflationary pressures, which have undoubtedly been too low for too long. This is clearly the case in Japan, because since April 2013 its monetary policy has been ultra-expansive, fundamentally depreciating the currency to increase inflation and reduce the relative price of consumption vs. savings. Thus, while in Japan the signals of pressure on prices are increasing, in Europe and the US they are still slipping, especially in the former. In our central scenario, European inflation will gradually but steadily increase as demand recovers, financial tensions ease and the European banking system’s capacity for lending is reinforced after close scrutiny of its transparency and resilience. Nonetheless, in Europe the margin for absorbing negative shocks to inflation is very limited, independent of whether they originate domestically or from abroad. As a reflection of this, the scope for policy implementation has to be as wide as possible, especially in the case of monetary policy that could have to face up to taking additional measures to achieve its objective from a preventative perspective. The ECB is debating this, but as of today a QE monetary expansion programme is not part of our most probable scenario.

The global economic cycle remains robust at the start of 2014. According to our estimates, in the first quarter of 2014 global GDP has accelerated very slightly to around 0.8% QoQ and, according to our global activity indicator (BBVA-GAIN), we expect this pace to be maintained for the first part of the year. In the wake of this sustained global recovery is the cyclical improvement in the DMs, which has offset the deceleration in some EMs in Asia and Latin America. Meanwhile, in the last few months the financial markets have performed very differently in the two regions, and with more differentiation between the EMs. Capital flows, asset prices, interest rates and financial tension indicators have fundamentally performed in line with the outlook for rate hikes in the UK, but have also been affected to a greater or lesser extent by geopolitical risk events in Eastern Europe and the outlook for deceleration in China. Altogether, tightening financial conditions have differed in each economy as a function of the degree of external vulnerability and financial integration. This is all related to higher deficits on current account, dollar-linked liabilities and flexible exchange rates.

The global scenario is a result of a combination of the policies introduced domestically but having cross-border implications, not only in terms of more or less demand for goods and services (international trade), but also in the extent to which they help

to alter global risk-aversion, which is reflected in the volatility of capital flows and/or the prices of financial assets and raw materials.

On the one hand, the cyclical recovery is gathering pace in the DMs on the back of less restrictive fiscal consolidation, fewer concerns about the sustainability of debt levels (thanks to contained financial costs) and progress on the implementation of banking union in the EMU. However, the normalisation of US monetary policy via quantitative measures and interest-rate expectations is resulting in a rebalancing of financial

portfolios at a global level, which is having a relevant impact on funding conditions and asset prices in the EMs. This contagion is nothing new, but has raised its head again in a new environment: with more financial integration in the EMs and an extraordinarily lax monetary policy in the US. Symmetrically, the exit from this exceptional period will also have an impact on the financial variables.

In this latter group, we are also starting to see concerns about the economic slowdown in China since the Chinese New Year, given the increased emphasis that the authorities are now placing on reducing vulnerabilities – via medium-term macro-prudential policies – rather than in sustaining growth in the short term.

To sum up, our assessment of the global scenario has a downward bias compared with our valuation three months ago, which is reflected in the adjustments to our forecasts. After growing at 3.0% in 2013, global GDP will start to accelerate again in 2014 and 2015 at around 3.4% and 3.8% respectively, figures that demonstrate both the variations in growth expectations in diverse regions and the increased, although slight, contribution to global growth by the developed economies. Although there have been no significant changes in either the US or the eurozone, the downward pressures in our forecasts are above all visible in the EMs in 2014 and 2015, in both Asia and Latin America. In this context, there are still short- and medium-term downside risks to our forecast. Some factors with a global impact could make themselves felt more intensely than expected in the base scenario on a short-term time horizon, such as a tighter monetary policy on the part of the Fed, reduced growth of the global demand stemming from economic slowdown in China or geopolitical risks derived from Eastern Europe.

www.bbvaresearch.com

“After growing at 3.0% in 2013, global GDP will start to accelerate again in 2014 and 2015 at around 3.4% and 3.8% respectively,...”


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EHS Manager

The EHS Manager will provide functional leadership in the country for technical and occupational safety, health, environment and asset protection. He/she will coach and develop the in-country team to increasingly nationalize the staff and leadership of the team. Other duties will include supporting business delivery by the Ghana business in all EHS matters and develop and cultivate positive relationship with external agencies and regulators. Location: Accra (resident) with regular visits to London and the US Minimum Qualification: Extensive experience and a degree or equivalent in an engineering or earth science discipline. Must possess the ability to influence and challenge effectively while promoting EHS values and Tullow behaviours. Contact: Visit www.tullowoil.com

Human Resource Manager for a power company

This Power Company specialises in engineering turn-key solutions in the energy sector. The Client is looking for 2 Human Resources Managers for their projects in Ghana, with one position located in the Western Region and the other position located in the Ashanti Region. This client is looking for experienced Human Resource Managers to join the company on either a 1 year contract, or a permanent basis. The successful applicants will be responsible for managing all HR processes in their assigned locationsLocation: Western and Ashanti regionsMinimum Qualification: Successful applicant must have a degree in HR or a related subject, and a minimum of 5 years’ experience in HR and 3 years as a Supervisor/Manager.Contact: Visit worldwide-rs.com/job/human-resources-manager-in-ghana-for-a-power-company-jobid-adc050514gh-t%2fk_1399564591 to apply

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General Manager (Insurance)

A leading insurance services provider which focuses on providing affordable and innovative life assurance products, designed to meet the specific needs of its clients is seeking to hire a General Manager (Insurance). The successful candidate will be responsible for the overall decision making, performance and efficiency of a unit.Location: AccraMinimum Qualification: The successful candidate must possess a minimum of a Master’s Degree in Business Administration or other relevant field and must have at least 5 years of experience in a similar capacity.He/she should also have a strong background in the local insurance sectorContact: Visit www.axishcl.com to apply

Training and Development Manager

A consulting firm in Ghana is seeking to hire a training and development manager to manage all its training and development efforts and build relationships in academia and in corporate GhanaLocation: AccraMinimum Qualification: The successful candidate must have a degree in Human Resources with at least 3-5 years’ working experience in a relevant field.He/she must have an understanding of the start-up corporate context (its challenges and benefits), and a willingness to grow with the company.Contact: Visit www.axishcl.com

Business Development Manager Cons BoP Solutions (West-Africa)

The Business Development Manager (BDM) Cons BoP is responsible for leading the different stages of the sales process for new business with the Philips Africa Incubator. He/she will act as the commercial owner for all deals within the assigned territory; will sell innovation and world class products and solutions and execute on the defined business models. Location: AccraMinimum Qualification: Candidate must have a degree level education or equivalent with strong consultative selling skills and sales/KAM experience. He/she must be a mature commercial professional with the ability to act on Board of Management level (BoM).Contact: Visit philips.taleo.net/careersection to apply

Grab a copy of GHANA’S FIRST GLOBAL BUSINESS READat the following outlets:Challenge BookshopKokomlemle

Total Fly Over Circle

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Paloma Vendor Paloma

Engen Mart Weija

Koala Shopping Centre Osu

Goil Fuel Station (Labadi Road) La Road

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Apollo Theatre Asylum Down

Into Clothing (La Palm) La Palm

Tesano Total Tesano

Total Fuel Station (Trust Towers) Adabraka

Best Western Premier Hotel Airport

Total Teshie First Junction Teshie

Total House Fuel Station Cedi House

Total Fuel Station (Tsuibleoo) Teshie

Agapet Spintex

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Having said that, in my candid opinion, I don’t see how an economic forum that only rehashes and parrots wholly Western economic philosophy; and devoid of local theoretical thought or framework as foundation, can help the economic woes of Ghana. That is why I said I don’t foresee anything special emanating from the exercise. The only way that we can find our bearing is when we challenge the Adam Smithian and Western kind of economic theories, borrow aspects that are still valid and add our own time-tested world view to form a fundament framework for theoretical postulation!

Take for example the theory of the fundamental problem of economics being scarcity; is it really true that there’s scarcity of resources—land, labour and capital, as if nature has gone bankrupt? Or it is that greed makes it seem so? Do we still need land, labour and capital by all means as prerequisites in order to produce? Is it still true that in the 21st Century industrialization holds the key to development when indeed so-called industrialized countries are now knowledge-based and service-driven? Is competition which Adam Smith, in the Wealth of Nations, stated is self-serving but necessary for development, better than collaboration and altruism? In the 21st Century don’t we see otherwise competitors now collaborating to serve the customer better?

In the past, 18th Century economic theories that were designed for the Western Industrial Age worked! Today we are in the Knowledge age. Why can’t the likes of you and I use our knowledge and experience to formulate theories relevant to our peculiar socio-economic exigencies rather than continuing to put old wine into new wineskins? If we don’t challenge the status quo what is going on now will persist: The West will leave us brainwashed while they exploit all of our natural resources right under our noses and supervision. In the end, they will no longer call us the dark continent when all of our

gold, diamond, oil etc are gone and our human resources are ruined, but the ‘abyssed’ continent!Some religious people look to God to salvage the economy. Hence they spend hours on end praying, some even asking for a miracle to change things. Ridiculous! Instead of wasting time praying, should we not be applying our God-given knowledge and talent to solve the problems we created ourselves? Is it not true that Heaven helps those that help themselves? This is not skepticism; it is optimism for a true and lasting solution!

Why Worldview is CriticalDoes Ghana have an economy? I cringe and chuckle whenever political leaders, religious leaders and others discuss the ‘economy’ of Ghana. Where foreign interests control and

Worldview - The True Foundation of Economics

As I write, the National Economic Forum is underway. While, personally, I don’t foresee anything special emanating from such a talk shop, I don’t discredit it either. I see it as a meaningful first step that if properly managed over the years to come, can eventually become reputable as a veritable non-political platform for finding real solutions to the challenges of the Ghanaian economy.

Adam Smith

Julius Ceasar-Tokoli


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The writer is the CEO/Managing Partner at Soleil Consults; a Management, Strategy and IT firm located in Accra-Ghana ([email protected])

exploit all of the country’s resources, is it not better described as “The working field of the West’’?

How can you develop an economy when you don’t have your own economic theories and principles that pertain to your unique circumstances? We go to school to learn Western economic theories that worked for them in an age diametrically different from now, let alone our society. Then with strings of degrees we come spewing these out hoping to apply them to our peculiar situation when even those that originated such theories have long moved away from them.

The current confused worldview and attitude of Ghanaian or African leadership and the populace for the most part require revisions. It is only when Ghana and the rest of Africa realize this and take action to rediscover our true identity in our true worldview that we can begin to find our way.

The Confused WorldviewWe, as a people only have a confused worldview. This has largely been influenced by our experiences. Before the advent of the European, Africa had our own natural philosophy (or science), fundamental, existential, and normative postulates; or themes, values, emotions, and ethics. Thinking that the European way of doing things was better than ours, we threw most of that away and sought to adopt the European worldview hook-line-and sinker.

Even worse were the dynamics of slavery and colonialism. While it is true that Africa cannot continue to blame those phenomena for our state of affairs, it stands without debate that such have significantly impacted negatively on our worldview. And that alteration is what has led us into the mental and economic subjugation that we are suffering in comatose, even after independence!

The French policy of Assimilation, for instance, has led French colonized Africans to become more French than the French. And this has led to a warped view of other Africans colonized otherwise. On the other hand, the British policy of Divide and Rule has led to the undermining of veritable African institutions such as chieftaincy and monarchy which ensured the relative

existential stability that existed among the peoples. Apart from that, even though unlike the French they were not assimilated into British culture, subtly through British sponsored religion

and classroom education, the African was brainwashed to leave their identity behind and adopt a world view not their own. The result is that just as putting gasoline into a diesel engine breaks down the engine, the African has become confused and broken-down. The wise thing to do now is to rediscover our roots and formulate a worldview consistent with our experiences, values, emotions and ethics. Only then can we formulate economic theories that truly meet our real needs!

DeterminationA slave master hates to lose his slaves. As in the case of the Israelites who while they were being delivered from Egypt the Pharaoh decided to pursue them because there was no one to do their dirty work, so Africa cannot expect that the West would readily allow us to escape from mental and economic subjugation. It takes a real psychological battle along with smooth diplomacy to achieve that. To do so, determination is required; and a strong one at that. But is the African elite and the ordinary person determined enough for such emancipation?

“The wise thing to do now is to rediscover our roots and formulate a worldview consistent with our experiences, values, emotions and ethics. Only then can we formulate economic theories that truly meet our real needs!”


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owever, I have come to understand that sometimes the best competitive strategies might not be enough. What should businesses do with competitors who refuse to budge and, as the phrase goes, are “here to stay?” I have a suggestion. I must however

caution you that my idea might sound a little bit ‘insane’ but hear (or rather, read) me out before you call the Psychiatric Hospital. I came by this idea from much reading and also from a remarkable lesson I learnt from, no other place than, my favourite school; The Street School of Hard Knocks. The advice is this: Sometimes the best way to compete against your competitors is to collaborate with them!!!

This is the trend referred to by some people as “Co-opetition” and by others as “Competilaboration.” Intra-company collaboration makes sense but collaborating with competitors may sound like a contradiction in terms, nonetheless it works. I have seen it work. I have always been hesitant to ‘buy into’ strategies just because some ‘guru’ says it is a right strategy. I am also not one to go broadcasting the virtues of an approach unless I have seen it working. Readers might be wondering how the above approach would play out on the streets of Accra, of all places. But that is what I intend to narrate to you.

I found myself in a taxi coming towards the Kwame Nkrumah Circle one weekday morning as I came to town for a meeting. The other passenger in the car was a woman. As is to be expected we were caught up in traffic along the way, and as usual, the street vendors and hawkers “came calling.” The lady passenger called one of those young boys hawking candies shouting ‘Tom-Tom’, ‘PK’ ‘Mentos’ and inquired if he had Original Hacks. The young man replied in the negative and the woman placed her money back into her purse. However, this boy did not leave the side of our car as it slowly moved along. He then did something I am sure most ‘businesses’ would not do. He began calling out to the other vendors inquiring from them if they had Original Hacks. What was more remarkable was the genuine interest and vigour he had in trying to get the woman this product at all cost. Though he did not have the product, he was going all lengths to ensure that the woman was satisfied, even calling to fellow competitors.

After a couple of futile attempts at getting the Original Hacks, he turned to leave the car. It was then that I saw the fruits of Co-opetition. The woman, obviously impressed by the young man’s attempts, called him back and to my surprise decided to settle for some ‘Tom-Toms’. These were the same products

‘CO-OPETITION’ or ‘COMPETILABORATION’?

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In an increasingly competitive business environment like ours, it makes perfect business sense to employ the entire arsenal of resources one can muster to ‘beat off’ any competition. It is understandable to compete as hard as one can to stay in the game. In this dog-eat-dog world of ours, no one will begrudge any business for fending off the competition with a big “BAMN” i.e. By Any Means Necessary.


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The writer is the CEO and Principal Consultant of Exsellers International, LLC, an avant-garde sales training and consulting firm involved in turning around and improving the sales fortunes of its partners through cutting-edge training seminars, recruitment and placement of highly trained sales

professionals, and the provision of state-of-the-art sales-boosting products and services. He blogs at www.exsellers.blogspot.com. You can reach him on 233-24-3157948 / 233-27-4930493 or [email protected]

she had rejected a couple of minutes before then, and here she was gladly purchasing them. This is the ‘phenomenon’ of Co-opetition at work; a practice where businesses in seeking ways to better treat their customers would not mind recommending their competitors to their clients, if the competition is in a position to better serve the customer. Its greatest advantage is that it creates a positive image in the eyes of the customer that you sincerely care about their welfare and that you are not only out to “separate them from their money.”

Though this young man was doing something that was ‘normal’ to him, he was, in actual fact, applying an approach that international businesses have been utilising for some time now. For instance, automobile giant BMW is currently in talks with its arch-competitor, Daimler, to produce and purchase vehicle components including engines. A recent article in the Wall Street Journal indicated that the German luxury car makers have realised that collaboration may give them “bigger economies of scale to prevent further erosion of margins.” Each company is expected to adapt the components in different ways to complement each brand. The deal is considered a win/win for both firms.

Co-opetition, especially in the automobile manufacturing industry, has been around for sometime now. Ford and Toyota have a history of both competition and collaboration. In the 1930’s, Ford allowed Toyota leaders to study its production techniques, even though it was aware the Japanese were going to use the technology to produce their own brand of cars. Some have argued that it was a mistake on the part of Ford to have allowed their competitors to view their production techniques. Toyota is fiercely competing with Ford in the US. However it may interest readers to know that Ford President and CEO Alan Mulally and Mark Fields, Ford’s head of operations for the Americas, recently met with Toyota Chairman Fujio Cho and other top Toyota executives in Tokyo. It was reported that the meeting was to explore environmentally-friendly technology including hybrid-electric and hydrogen fuel systems and ways that Toyota can help Ford boost manufacturing efficiency. That is the power of Co-opetition at work.

It seems Ford Motor Company has a thing for this practice. It has been further reported that the company has a shared technologies program, where engineers and executives of Mazda (partially owned by Ford), Ford Europe and Volvo co-operate to cut down costs of developing specific small car models. Ford benefits by reducing competition among its brands and increases the sharing of best practices. Many examples of collaborative efforts exist in the automobile industry. General Motors, Daimler and BMW are reported to be coming together to develop hybrid cars whilst like makers of the Smart car are also said to be collaborating with Mitsubishi for engine development.

Many organisations are realizing that the lack of collaboration can impede progress. This approach, albeit tough to initiate, creates a balance between the two opposing but complementary entities. This balance, in turn, can create significant economic value, particularly when the collaboration involves common processes that provide no competitive advantage. In some parts

of the world, universities have to collaborate to acquire research funds since failure to do will result in all parties losing out on the funds. Even the profit-oriented football clubs sometimes have to collaborate (off the field) to survive their intensely-competitive environments.

An interesting analogy I came across concerning the importance of collaborating with competitors is that of vehicles travelling on a road. When a vehicle attempts to overtake another, the one being overtaken can decide to speed up to block the way (Competition). This can however endanger occupants in both vehicles. However, when a car wishing to pass moves into the lane with oncoming traffic, cars in both lanes can decide to move to the shoulder and make a path for the passing car (Collaboration). Though this comparison

might be a bit implausible, it indicates that sometimes total strangers must join together for a common goal—staying alive. Failure of road-users to collaborate may result in catastrophic consequences. (I hope some drivers get to read this article.) On the road you either collaborate or collide. Likewise, companies that fail to collaborate are on collision courses. In our increasingly competitive business environment companies must collaborate or risk losing their customers and ultimately lose market share. Survival on the Ghanaian market increasingly requires collaboration.

Some banks had better start thinking in this direction since failure to collaborate with others might result in fatal ‘crashes’ on the business highway. Already we know of co-opetition amongst some banks on shared IT platforms for ATM and other services. Others should follow suit. I dare suggest that even the players in our interesting telecommunications industry should move in this direction. I will however caution that Co-petition only makes sense if it will result in saving money for everybody involved without risking marketplace position or advantage. The number one reason why competitor should ever collaborate is when the collaboration creates value for all.

So there you have it. Next time you feel the urge to cross over to the other side of the road and beat the living day lights out of your ever-persistent competition, take a step back and consider Co-opetition or rather, Competilaboration.

“...it indicates that sometimes total strangers must join together for a common goal—staying alive. Failure of road-users to collaborate may result in catastrophic consequences....On the road you either collaborate or collide.”


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Checking the ability of your customer service representative

Oftentimes when an organization faces financial challenges and decide to cut down on their activities, they automatically start eliminating activities that would enhance the customer service their organization provides and focus and spend millions on other areas such as marketing, advertising and branding. What they forget is that none of the adverts, marketing strategies and branding activities would yield any long term benefit for the organization if not backed by good customer service strategies.

hether for the sake of reviewing a business, acting as a consultant, or assessing the processes in your own place of work, customer service is one of the most important aspects

of a company’s operation. Customer service will continue to be the bloodline of any serious business and the customer will always be king. This makes it important to test the quality of customer service a representative is providing. This process requires assessing the most key aspects of problem-solving and human relations. It is not easy but absolutely necessary. So what are the steps an organization can take to make sure that they are constantly and consistently testing the quality of service a representative is providing?

•Test the customer service representative’s customer serviceetiquette. How are they dressed and how organized is their work station? How does their dress code and work area impact on the businesses brand? Remember that first impressions always count and customers will always brand or stereotype customer service representatives based on their appearance. Assess their initial greeting and communication skills. Upon first contact with the representative, assess whether he or she greets customers eagerly and politely, assess your first impressions about the representatives receptiveness. How you feel, is most likely how the customer feels too. Determine if they engage their customers in conversation in order to help them further. Do they smile, especially when dealing with customers face to

Yvonne MacCarthy


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Yvonne MacCarthy (CSP, Cert FPC) is a customer service and interpersonal skills consultant and the Chief Executive Officer of Service Care Solutions and Client Service Institute, Ghana, providing practical customer service solutions for businesses as well as training in

customer care for individuals. She is a member of the Personal Finance Society and the Institute for Customer Service, UK. She is a resource person on various media platforms including Citi FM, Multi TV, TV3, ETV and Radio Universe and also hosts a monthly show on TV Africa, “How are you doing, Ghana business?”

face? What is the representative’s tone of voice when talking to a customer? Is it cheerful or bright? Or is it monotone and sad? The representatives tone should be at least moderately bright and cheerful, and their speaking should be easy to understand.

•Assess the representative’s ability tounderstanda situation.How do they react when presented with a complicated problem that involves a somewhat lengthy and convoluted explanation. Observe how many times they ask you or customers to repeat or clarify and whether they react negatively to being presented with a difficult task. If they have to ask for clarification, observe whether they ask good questions and the quality of answers they give and how they react whiles giving those answers (body language). Ultimately, judge how well they understand the issue and their commitment to resolve complaints.

• Observe whether the representative can be patient in adifficult situation. Customers often get frustrated with both the representative and the company in question. How does the representative react to customers who shout, insult or use swear words (this is more than they should reasonably be expected to handle). How do they react when customers express their frustration calmly, but firmly. The best representative will react in a professional manner and apologize even if the problem is not their fault. This strategy allows your customer service representative to demonstrate if they understand the difference between hearing and listening.

• Evaluate the representative’s ability to solve problems anddelegate. Conflicts within an organization and customer complaints would always occur. The most important thing to do is not to avoid the situation but to find a very professional and consistent way of dealing with these conflicts both internally and externally. Have a customer service complaint procedure that all customer service representatives know, understand andfollow. Customer complaints are unavoidable but can be solved with the right attitude.

Present your customer service representative with a problem, If they can’t fix the problem, they should be able to take you through the process the organization uses to solve problems. Most of the time, the complaints are not the fault of the customer service representative but that of the organization. Organizations need to watch out for any problems that may not be the fault of the representative because this could indicate that the company itself is not investing in the correct customer service

strategies; neither is it training customer service representatives adequately.

• Evaluate therepresentative’s ability to take initiative. Being assertive is one of the most i m p o r t a n t i n t e r p e r s o n a l skills any good customer service representative can possess. Watch for questions that probe beyond the customer’s needs and wants. Check their communication and sales techniques. Determine if they

ask both transactional as well as transformational questions. Observe if they are fully aware of other products and services offered by the organization. Observe if they make the right offers of products/services to the right customer at the right time. Determine if they can and will go the extra mile for the customer.

It is not an easy task to maintain effective, consistent and mind blowing customer service but the difficulty of it is no excuse for

the lack of effective, consistent and mind blowing customer service. There is no doubt that if an organization is serious about the customer service they offer, they would take the above inexpensive steps to help them assess their front liners and customer service representatives.

“Organizations need to watch out for any problems that may not be the fault of the representative because this could indicate that the company itself is not investing in the correct customer service strategies neither is it training customer service representatives adequately.”


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Succeeding in the business climate of today might entail often nearly as much time on the move as in the boardroom. Travel time however is not downtime

and the business leader needs to stay sharp and focused wherever he may be. Here are seven essential gadgets that will ensure that being away from the office

doesn’t mean being away from the action.

Executive Assistants7 essential tools for the business traveller

TYLT Energi+ BackpackKeeping your gear charged up is a pain when you travel. This backpack has a battery pack built in so you can charge as you go. It’s bigger than most portable back-up chargers, so you can expect to charge your phone about four times. (You can also charge three devices all at once.) There are 13 compartments to stash your gadgets, and seven pass-thru slots that run through to the battery pack. It’s designed to hold a 15-inch laptop.

BlueNio TagKeeping track of your stuff is an important part of business travel. Yet, many of the products that supposedly make theft prevention and locating your gear easier tend to run out of battery power too soon. The BlueNio Tag lasts for three to four months and is rechargeable. It has a motion sensor (if someone moves your stuff) and a locator (to find a missing item on a map). If you lose your bag or if it’s stolen, the device can send you an alert by text or email.

IOGEAR MediaShair HubThis handy gadget takes up a small corner of your laptop bag but provides some useful travel perks. You can pop an SD media card into the reader port, or connect a USB thumbdrive or portable hard drive and then share the storage over the built-in Wi-Fi hotspot with up to seven users. There are apps for Android and iOS to tap into the networked storage.

Jackery LeafMophie is a leader in smartphone cases, but this durable model from a less well-known company is worth considering. The case has a built-in battery to recharge your iPhone 5/5S. The 2400 Mah model is priced much lower than the Mophie Juice Pack Plus with the same size battery. The Leaf will recharge your phone once plus another 20 percent.

Satechi Smart Travel Router & AdapterFor overseas trips, this adapter converts to different outlet types for the United States, Asia, United Kingdom and Europe. There’s also a USB charge port but the killer feature is that the adapter works as a Wi-Fi hotspot as well. You just plug in the Ethernet cable from a hotel room and can tap in from laptops, tablets, and phones.


Somotex Ghana launches curved OLED TV in Ghana

LG Electronics (LG), a global leader in Home Entertainment and Consumer Electronics has introduced into the Ghanaian Market, the World’s First Curved OLED TV. The advanced Organic Light Emitting Diode (OLED) TV is equipped with incredible picture quality, stunning design and innovative technologies.

The LG CURVED OLED TV, was unveiled at Movenpick Ambassador Hotel, in the heart of the capital, Accra on Thursday 22nd of May, 2014.

“We are fully committed to bringing next generation technologies to the Ghanaian market,” said Mr. Steve Ryu, General Manager, Home Entertainment division, LG Electronics West Africa operations. “The next-generation display technology and the advanced ultra-thin depth of 4.3mm come with a unique curved design which represents a new era in home entertainment. It must be seen to be believed.”

Featuring a gently curved screen and LG’s own WRGB OLED technology, the CURVED OLED TV offers exceptional picture quality and an immersive viewing experience. The cutting-edge TV has been awarded the prestigious Red Dot: Best of the Best honor and is recognized by respected international product testing and certification bodies TÜV Rheinland, Intertek and VDE.

Also speaking at the event, Executive Director, Somotex Ghana Limited, Mr. Nii Ayi Hyde said: “Our groundbreaking CURVED OLED TV marks the beginning of a whole new era in home entertainment. Its IMAX-like curvature guarantees an amazingly immersive and comfortable viewing experience. Indeed, it is a point of pride that we were able to bring the CURVED OLED TV into the Ghanaian market and we will continue to expand and improve our industry leading television technology.”

LG curved OLED TV delivers a Peak Brightness that is comparable to the brightest large screen LCD TVs for TV, movie, and video content. Also commenting on this milestone achievement, Vice President, Somotex Ghana Limited, Mr. Pranab Mohanty said: “Somotex Ghana is proud to be associated with the World’s first CURVED OLED TV coming from the innovation of LG Electronics. Somotex Ghana Limited is the sole authorized distributor of LG Electronics and commands leadership in the Electronics industry in Ghana. The introduction of the LG CURVED OLED TV signifies the commitment of Somotex Ghana and LG to provide cutting edge technology, which we believe would create a whole new experience at home.

With LG’s WRGB OLED technology, the Curved OLED features infinite contrast ratio with deeper blacks and brighter whites than a conventional RGB display. In terms of

performance, LG CURVED OLED displays are superior. They’re thinner, more efficient, and mind-bogglingly color accurate. Also, the screen delivers incredible color accuracy regardless of ambient light or viewing angle.

Only 4.3mm (0.17 inches) thin and weighing just 17kg (37.48 pounds), the CURVED OLED TV is simply stunning to behold. The breathtaking, modern design of the 55EA9800 features the flowing, almost transparent Crystal Stand. LG’s forward-facing Clear Speakers are unobtrusively incorporated into the Crystal Stand to

deliver flawless audio with remarkable fidelity in the mid- to high-frequency ranges.

Regarding power consumption, OLEDs are vastly more energy efficient than plasma TVs. It’s not even close. What’s more, the company plans to expand its joint efforts to offer more region-specific entertainment and live broadcasts in order to deliver the best possible Smart TV user experience to LG customers worldwide.

Global demand for OLED TV is expected to grow to more than 7 million units by 2016, according to Display Search. LG is the first company to commercialize both the flat screen OLED TV, which went on sale in Korea in January, and the innovative new CURVED OLED TV, which began sales in Korea in April.

With the introduction of LG 55-inch curved OLED TV, LG Electronics has once more demonstrated that it is committed to meeting the peculiar needs of its teeming consumers especially in Ghana.

The 77inch and 105inch of the Curved OLED TV have also been announced by LG Electronics. The cutting-edge TV has been awarded the prestigious Red Dot: Best of the Best honor and is recognized by respected international product testing and certification bodies TÜV Rheinland, Intertek and VDE.

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About LG Electronics Home Entertainment Company The LG Electronics Home Entertainment Company is a global top player in televisions, monitors, commercial displays, audio video systems, personal computers and security systems. The company constantly pushes technological boundaries to create feature-rich devices with stylish designs that meet global consumer needs. LG’s consumer products include OLED TV, Ultra HD TV, CINEMA 3D Smart TV, IPS monitors, home theater systems, Blu-ray Disc™ players, car audio video systems, mouse scanners and external storage devices. LG’s commercial products include digital signage, video conferencing systems and IP security cameras.

About Somotex Ghana Limited Somotex Ghana Limited, an umbrella of the Mohinani Group is a leading consumer durable distribution company in Ghana and the only authorized LG dealer with 18 retail showrooms (under the Somovision & Eelctromart identity) and depots in 4 cities. Leading brands distributed in the various segments present are LG (consumer durables) and commercial air-conditioners. Other key products distributed are MRF/Toyo Tyres and tele-com solutions (Avaya). For more information, please visit www.mohinani.com.

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Thomas Piketty likes capitalism because it efficiently allocates resources. But he does not like how it allocates income. There is, he thinks, a moral illegitimacy to virtually any accumulation of wealth, and it is a matter of justice that such inequality be eradicated in our economy. The way to do this is to eliminate high incomes and to reduce existing wealth through taxation.

“Capital in the Twenty-First Century” is Mr. Piketty’s dense exploration of the history of wages and wealth over the past three centuries. He presents a blizzard of data about income distribution in many countries, claiming to show that inequality has widened dramatically in recent decades and will soon get dangerously worse. Whether or not one is convinced by Mr. Piketty’s data—and there are reasons for skepticism, given the author’s own caveats and the fact that many early statistics are based on extremely limited samples of estate tax records and dubious extrapolation—is ultimately of little consequence. For this book is less a work of economic analysis than a bizarre ideological screed.

A professor at the Paris School of Economics, Mr. Piketty believes that only the productivity of low-wage workers can be measured objectively. He posits that when a job is replicable, like an “assembly line worker or fast-food server,” it is relatively easy to measure the value contributed by each worker. These workers are therefore entitled to what they earn. He finds the productivity of high-income earners harder to measure and believes their wages are in the end “largely arbitrary.” They reflect an “ideological construct” more than merit.

Soaring pay for corporate “supermanagers” has been the largest source of increased inequality, according to Mr. Piketty, and these executives can only have attained their rewards through luck or flaws in corporate governance. It requires only an occasional glance at this newspaper to confirm that this can be the case. But the author believes that no CEO could ever justify his or her pay based on performance. He doesn’t say whether any occupation—athletes? physicians? economics professors who sell zero-marginal-cost e-books for $21.99 a copy?—is entitled to higher earnings because he does not wish to “indulge in constructing a moral hierarchy of wealth.”

He does admit that entrepreneurs are “absolutely indispensable” for economic development, but their success, too, is usually tainted. While some succeed thanks to “true entrepreneurial labor,” some are simply lucky or succeed through “outright theft.” Even the fortunes made from entrepreneurial labor, moreover, quickly evolve into an “excessive and lasting concentration of capital.” This is a self-reinforcing injustice because “property sometimes begins with theft, and the arbitrary return on capital can easily perpetuate the initial crime.” Indeed laced throughout the book is an almost medieval hostility to the notion that financial capital earns a return.

Mr. Piketty believes that the wealthier a society becomes, the more people will claw for the best relative social station and the more inequality will ensue. He turns to those timeless economic authorities Jane Austen and Honoré de Balzac in mapping our

future. Throughout the book, he importunately digresses with the dowry-chasing machinations of characters in novels like “Sense and Sensibility” and “ Père Goriot. “ He is obsessed with the following calculus: Are the fruits of working hard greater than those attainable by marrying into a top fortune? If not, “why work? And why behave morally at all?”

While America’s corporate executives are his special bête noire, Mr. Piketty is also deeply troubled by the tens of millions of working people—a group he disparagingly calls “petits rentiers”—whose income puts them nowhere near the “one percent” but who still have savings, retirement accounts and other assets. That this very large demographic group will get

larger, grow wealthier and pass on assets via inheritance is “a fairly disturbing form of inequality.” He laments that it is difficult to “correct” because it involves a broad segment of the population, not a small elite that is easily demonized.

So what is to be done? Mr. Piketty urges an 80% tax rate on incomes starting at “$500,000 or $1 million.” This is not to raise money for education or to increase unemployment benefits. Quite the contrary, he does not expect such a tax to bring in much revenue, because its purpose is simply “to put an end to such incomes.” It will also be necessary to impose a 50%-60% tax rate on incomes as low as $200,000 to develop “the meager US social state.” There must be an annual wealth tax as high as 10% on the largest fortunes and a one-time assessment as high as 20% on much lower levels of existing wealth. He breezily assures us that none of this would reduce economic

growth, productivity, entrepreneurship or innovation.

Not that enhancing growth is much on Mr. Piketty’s mind, either as an economic matter or as a means to greater distributive justice. He assumes that the economy is static and zero-sum; if the income of one population group increases, another one must necessarily have been impoverished. He views equality of outcome as the ultimate end and solely for its own sake. Alternative objectives—such as maximizing the overall wealth of society or increasing economic liberty or seeking the greatest possible equality of opportunity or even, as in the philosophy of John Rawls, ensuring that the welfare of the least well-off is maximized—are scarcely mentioned.

There is no doubt that poverty, unemployment and unequal opportunity are major challenges for capitalist societies, and varying degrees of luck, hard work, sloth and merit are inherent in human affairs. Mr. Piketty is not the first utopian visionary. He cites, for instance, the “Soviet experiment” that allowed man to throw “off his chains along with the yoke of accumulated wealth.” In his telling, it only led to human disaster because societies need markets and private property to have a functioning economy. He says that his solutions provide a “less violent and more efficient response to the eternal problem of private capital and its return.” Instead of Austen and Balzac, the professor ought to read “Animal Farm” and “Darkness at Noon.”

Credit: online.wsj.com

Thomas Piketty revives Marx for the 21st CenturyDaniel Shuchman, a New York fund manager who often writes on law and economics, reviews “Capital in the 21st Century”, Thomas Piketty’s best selling tome on income inequalities.


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Daily Interbank Forex Rates as at Wednesday 28th May, 2014

Currency Pairs Code Buying Selling

U.S Dollar USDGHS 2.8862 2.8888

Pound Sterling GBPGHS 4.8647 4.8697

Swiss Franc CHFGHS 3.2272 3.2294

Australian Dollar AUDGHS 2.6610 2.6652

Canadian Dollar CADGHS 2.6482 2.6503

Danish Kroner DKKGHS 0.5280 0.5284

Japanese Yen JPYGHS 0.0284 0.0284

New Zealand Dollar NZDGHS 2.4698 2.4738

Norwegian Kroner NOKGHS 0.4850 0.4852

Swedish Kroner SEKGHS 0.4377 0.4380

S/African Rand ZARGHS 0.2782 0.2784

Euro EURGHS 3.9406 3.9437

Chinese Reminbi CNYGHS 0.4629 0.4633

BCEAO GHSXOF 166.33 166.46

Dalasi GHSGMD 13.70 13.71

Ouguiya GHSMRO 102.07 102.16

Naira GHSNGN 56.11 56.16

Leone GHSSLL 1496.49 1497.84

WAUA WAUGHS 0.1788 0.1788

Treasury Bill Ratesas at Monday 26th May, 2014 to Friday 30th May, 2014

Period Discount Rates Discount Rates

91 - Day 22.7108% 24.0778%

182 - Day 19.2408% 21.2888%

1 - Yr Note -% 22.5000%

2 - Yr Fixed Rate Note -% 23.0000%

Trading Results - GH Cedi

Share Code

YearHigh

(GHS)

Total SharesTraded

Last Trans-action Price(GHS)

AADS 0.52 0 0.03

ACI 0.06 0 37.00

AGA 37.00 0 0.05

ALW 0.06 0 0.17

AYRTN 0.18 700 2.30

BOPP 3.30 5,600 0.88

CAL 1.04 0 0.04

CLYD 0.04 0 0.16

CMLT 0.16 0 0.02

CPC 0.02 8,800 6.55

EBG 7.98 0 2.00

EGL 2.50 1,596,700 0.22

ETI 0.24 0 7.35

FML 7.55 5,700 4.35

GCB 5.05 0 5.58

GGBL 6.20 0 23.00

GLD 26.13 700 0.90

GOIL 0.90 0 2.75

GSR 2.75 0 0.04

GWEB 0.04 0 1.34

HFC 1.35 0 3.50

MAC 3.10 0 0.33

MLC 0.39 0 0.13

PBC 0.17 0 0.06

PKL 0.06 100 0.58

PZC 0.79 490 17.78

SCB 20.56 0 0.55

SCB PREF 0.52 334,000 0.40

SIC 0.52 100 0.85

SOGEGH 1.17 0 0.04

SPL 0.04 54,400 0.04

SWL 0.03 0 0.25

TBL 0.35 0 35.00

TLW 35.00 300 6.40

TOTAL 6.56 0 0.03

TRANSOL 0.03 0 17.98

UNIL 18.31 0 0.3

UTB 0.49 0 0.03


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Month ending April 2014. Wholesale Prices (GH¢) Average Unit Weight Accra Bawku Kumasi Tamale Techiman Takoradi Dambai this month last month Avg% ChangeCassava(Fresh Tubers) Bag 91kg 61.25 N/A 34.50 80.00 35.75 65.00 50.00 54.42 54.83 -0.76 Cassava (Gari) Bag 68kg 102.50 115.25 170.00 116.00 82.00 132.50 116.00 119.18 119.68 -0.42 Cowpea (White) Bag 109kg 290.00 195.25 170.00 200.00 180.00 290.00 196.00 217.32 216.21 0.51 Groundnut (shelled) Bag 82kg 340.00 315.00 277.50 236.00 260.00 320.00 276.00 289.21 279.75 3.38 Maize (white, grain) Bag 100kg 97.50 67.50 95.50 56.00 64.75 100.00 76.00 79.61 76.54 4.01 Millet (grain) Bag 93kg 140.00 115.25 118.25 91.50 100.00 200.00 116.00 125.86 124.68 0.95 Rice (imported-unclesam) Bag 50kg 190.00 N/A 200.00 N/A 190.00 210.00 N/A 197.50 197.19 0.16 Rice (local-white) Bag 100kg 281.50 195.25 215.00 157.00 172.50 130.00 196.00 192.46 179.57 7.18 Soya Beans Bag 109kg 207.50 95.00 118.75 96.00 152.50 205.00 116.00 141.54 133.86 5.74 Tomato (cooking) Crate 52kg 257.50 75.00 93.00 99.00 126.50 300.00 108.00 151.29 133.00 13.75 Wheat (Grain) Bag 50kg 150.00 115.00 130.50 125.00 150.00 160.00 N/A 138.42 135.17 2.40 Yam (pona-medium) 100tubers 250kg 312.50 N/A 230.00 N/A 302.50 390.00 220.00 291.00 281.00 3.56

NB: * Accra market is Agbogbloshie * Kumasi is the Central market. To receive prices update and agric tips on your phone dial 1900 / 0302211583 or Visit www.esoko.com.

GroundnutIn the month of April, the average price of 84kg bag of groundnut shelled was between GHS 236.00 to GHS 340.00. The highest price GHS 340.00 was recorded on the Accra market while the lowest price of GHS 236.00 was recorded on the Tamale market. The seemingly high price of the commodity across various markets nationwide according to Esoko Market Watchers was attributed to the scarcity of the commodity since we are in the lean season and farmers have just begun the new cropping season. MaizeThe average price of the commodity per 100kg bag across the various markets for April was between GHS 56.00 and GHS 100.00. Tamale recorded the Lowest whiles Takoradi recorded the highest. In the month of April, the average percentage change was 4.01. higher than previously recorded. Prices were however expected to peak around April owing to the fact that it is the off production season and trading would have peaked as dipicted

TomatoThe commodity per 52kg crate was between an average price of GHS 75.00 and GHS 300.00 at Bwaku and Takoradi Markets respectively. At the moment, available tomatoes in the markets are largely imports from neighboring countries like Burkina Faso. This has contributed to the high price of commodity in various markets. The average percentage change for the commodity was 13.75. The highest in the month in view of the commodities under consideration. General CommentsComparing the prices of the three commodities under consideration, it can easily be seen that the price of maize recorded the lowest across all markets under consideration followed by tomatoes. Groundnuts recored the highest price across all the market areas under consideration. Perhaps a trading decision for actors in the value chain especially aggregators and first timers at that will be to start with groundnuts.


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