Prof. Edward Ghartey
Professor Edward Ghartey, an economist at the University of West Indies, has urged government to avoid financing public projects directly.
According to him, there were several occasions where government releases money to directly finance public projects and it go waste.
“The projects being financed get abandoned and the money unaccounted for by those whom it was entrusted.”
Prof. Ghartey, who made this known when delivering a lecture in Accra on the theme, “financial Development and economic growth in Ghana,” said people turn to misuse government money and do not account for it because they belong to the party in power, adding that “This attitude is affecting the nation’s development.”
He said instead of government financing projects directly, it should rather serve as a facilitator of the financial market by embarking on policies that will deepen the stock market and widen the participation of the general public.
Prof. Ghartey, a visiting fellow with the Institutes of Economic Affairs (IEA), advised government to direct national resources to develop the economy and promote economic growth.
“Financial development is very important for economic growth. But government cannot be the driver of financial development; it must serve as a facilitator. It must make people aware of the stock market and give people tax holidays.”
By Cephas Larbi
Dr Ofosu Ahenkorah, in cap, inspects an energy efficient refrigerator at the launch of the pilot scheme
The Energy Commission expects to sell 50,000 units of refrigerators this year to save an estimated 35 million units of electricity for consumers.
In line with this, the Commission has rolled out its nationwide project to promote appliance energy efficiency and transform the refrigerating appliance market in Ghana.
Dr Alfred Ofosu Ahenkorah, Executive Secretary of the Energy Commission, in a speech on Wednesday to launch the nationwide project in Accra, noted: “The rebate is an opportunity for customers to get the best deal on new refrigerators on the Ghanaian market. The prices under the scheme have been drastically reduced for a limited period and Government is providing funds to make the acquisition of refrigerators affordable.”
New refrigerating appliances under this scheme could be purchased from as low as GH¢180 to GH¢800 after the discount is applied, the discounts offered on the refrigerators depend on the energy efficiency star rating on the refrigerator, he said.
Refrigerators marked 2–stars attract a discount of GHS150 while a refrigerator with 3-stars and above attract a whopping GHS200.
“We expect this scheme to follow the success story of the energy efficient light bulbs – the CFLs. The implementation of this initiative resulted in electricity demand savings of over 124 MW and energy costs savings of over 33 million dollars per annum.”
All energy-draining refrigerators from the rebate scheme are sent to the City Waste Company Limited for proper disposal.
The company has imported specialized equipment just for recovering the banned CFC refrigerants which is still running in refrigerators in most homes. These refrigerants are 2400 times more destructive than the carbon dioxide emissions and are also the major cause for the Ozone Layer Depletion.
The Executive Secretary said that discussions have started between the Energy Commission, Environmental Protection Agency, CWMCL and Scrap Dealers Association on how to sanitize the scraping of refrigerators to avoid burning of cables and crude methods employed in the scraping process.
“When all the useful contents have been removed from the refrigerators, the frame is simply dumped anywhere and these sometimes find their way into the Odaw River. We expect that this project will pave the way and show the proper methods for recycling these refrigerators.
With the scheme rolled out nationwide, participating shops in the regional capitals will now offer the rebate scheme.
Melcom and ROWI, both general appliance shops, have joined the scheme while Appliance Masters and Somovision will continue to run the rebates on their refrigerators.
Participation in the scheme by these shops is voluntary and these companies had to go through a rigorous selection process.
“Participating shops are expected to fully comply with the labeling requirements and carry the stickers on all refrigerators they offer for sale.”
ECOBANK is a major partner in the scheme. The bank is offering flexible and attractive consumer loans to cover payment of the top-up after the discount is applied on the fridges and freezers.
On 19th September 2012, the Energy Commission launched the pilot refrigerator rebate and exchange scheme in Accra and its environs.
A total of 2,100 refrigerators were exchanged under the pilot scheme.
A typical household consumes 3,000 kWh of electricity a year and thus spends close to GHS540 annually.
An efficient refrigerator can drain close to 1,200 kWh or 40 percent of total household energy, costing GH¢216.
On the other hand, the new refrigerators we are promoting can consume less than 5 kWh per year and can reduce the refrigerator’s contribution to household consumption to just 16 percent and as such reducing annual electricity bills due to refrigeration from GH¢216 to GH¢90. An efficient refrigerating appliance can last between 10 and 15 years.
By Samuel Boadi
Haruna Iddrisu, Minister for Trade and Industry
Bilateral trade between Ghana and Canada reached $236.6 million, representing approximately 220 percent from 2000 to 2012.
Imports of goods from Canada to Ghana reached $216.2 million in 2012 whereas Ghana’s exports were $20.3 million.
According to an official factsheet published by the Canadian government, top merchandise imported from Canada to Ghana included cereals, vehicles and parts, machinery and miscellaneous textiles while exports comprise mainly cocoa, wood, rubber articles, and edible vegetables.
The statement said, “The bilateral programme, as well as, contributions to multilateral organizations and to more than 30 Canadian civil society organizations working in Ghana, brings the total of Canadian disbursements to more than $131 million during fiscal year 2011-2012.”
The statement said Ghana and Canada have a well-established and growing trade relationship, adding that freedom, stability and rule of law have made Ghana an attractive home for Canadian companies serving all of West Africa.
The statement said, “Due to a statistical rebasing of the GDP and in light of the new oil and gas industry, Ghana is officially now a lower-middle-income country according to the World Bank, with a per capita income in excess of $1,000.”
It added that business development opportunities for Canadians were emerging in mining, education, infrastructure and oil and gas.
It noted that Ghana was the first country in Africa to receive development assistance from Canada in 1957 and is currently Canada’s fifth-largest development partner in the world, stating that Ghana is one of the few countries in Sub Saharan Africa which Canada has a trade surplus with.
Ghana is a country of focus for the Canadian International Development Agency (CIDA). Canada’s bilateral development assistance focuses on two sectors: Food Security and Children and Youth (with an emphasis on water, sanitation and hygiene)”.
Canada considers Ghana as a model of democracy and stability in West Africa, it noted.
By Cephas Larbi
CANAL+AFRIQUE, a subsidiary of Canal+Overseas, operators of Canal+Group’s international pay-TV, in partnership with Multichoice Ghana, has introduced its new multi channel television in Ghana.
CANALSAT, the new subscription digital television service with over 125 channels and radio stations in digital quality, is set to offer all Ghanaians and members of the Francophone community in Ghana top quality entertainment in French.
Subscribers will also have the opportunity to watch channels covering topics, movies, sports, youth, discovery, entertainment, music, news and general interest, as well as 27 national and private African channels and radios.
John Timothee, Director of sales Development & partnerships at CANALSAT+AFRIQUE, said the television channel promises to provide its subscribers with high-quality, rich and diverse French offer.
“CANALSAT offers diversity with exclusive channels, ‘Must-have” channels and a wide range of specialty channels,” he said.
He added that beginning from this month, CANALSAT will be available in 15 outlets across the country, including 11 in Accra and four other outlets in Koforidua, Nkawkaw, Akosombo and Aflao for purchase by subscribers.
Timothee said in order to meet the needs and desires of each subscriber, CANALSAT has made available five bouquet offers to choose from Access, Evasion, Access Plus, Evasion Plus and Tout Canal.
“Access provides 79 channels, radio and services from GH¢19 per month, Evasion 102 channels, radios and services from GH¢39 per month, Access Plus 84 channels, radios and services including LES CHAINES CANAL+ from GH¢59 per month, Evasion Plus 107 channels, radios and services including LES CHAINES CANAL+ from GH¢79 per month and Tout CANAL gives 131 channels, radios and services including LES CHAINES CANAL+ from GH¢159 per month,” he noted.
Cecil Sunkwa-Mills, Managing Director of MULTICHOICE Ghana, recommended the channel to the Ghanaians, particularly members of the Francophone community, saying it has come to give more variety to the citizens.
By Jamila Akweley Okertchiri
ThatNewJob went live with its website in Ghana on Monday 6th of May 2013. The website is a jobs board with the aim of tackling the current unemployment in Ghana.
http://ww.thatnewjob.com will connect the thousands of jobseekers in Ghana to the job advertisers/employers seeking suitable candidates. Job Advertisers/Employers are able to post as many jobs as they wish and jobseekers are able to search, apply and track their applications for these jobs.
Toye Akinwale, CEO ThatNewJob said “Unemployment is a big problem here in the UK and around the world today. It is getting more difficult for jobseekers to find suitable jobs and for job advertisers to employ the right people. ThatNewJob will bridge this gap making it easier not only for a potential employer to post their jobs but also to find the right candidate. Jobseekers are also able to manage their job applications using our simple to use website.”
“What makes us different to other job boards today is the amount of features offered on our site and its ease of use. We are very excited about our launch to the Ghanaian market and already in discussions to follow this up with a similar website in Nigeria within the coming months.”
ThatNewJob has received a lot of positive reviews since its launch only a few days ago. Whilst there are already other job boards available in Ghana, ThatNewJob is rapidly gathering momentum with over 1,000 jobseekers in Ghana already registered within just a few days of going live to the public.
Dr Frank Odoom
The saying that haughtiness comes before a fall has been amply confirmed by the mess in which Merchant Bank Ghana Limited finds itself currently.
If ever there is any particular group of persons who are to be blamed for the current imbroglio being experienced by the bank then it should be no other than management of bank.
The impudence with which management of the bank discarded proposals by the sacked workers’ union chairman of the bank, Rev. Jonas Koranteng-Smart in July 2011 is what has tumbled the bank till now.
A letter sighted by CITY & BUSINESS GUIDE from the Professional & Managerial Staff Union (PMSU)/LU of Merchant Bank and signed by Jonas Koranteng-Smart, the then chairman of the union, revealed that the downfall of the bank was predicted by the union long before the crisis, but management disregarded the union’s advice and later became hostile to its leader.
The workers, referring to the bank’s financial performance for the half-year ended June 30, 2011, stated that there was a significant drop in interest income.
“By implication, the bank has not made any serious business growth in 2011 and all efforts are concentrated on non-performing loans (NPLs).”
It said that the drop in interest income on year-on-year basis was 60 percent which meant that while the bank was incurring expenses, no effort was made to build new business to dilute the NPLs position.
“Interest expense/interest was 52 percent in 2010 and has gone up by 74 percent in 2011.”
“While concentration has been shifted from fixed deposits (FDRs), no new cheap deposits are being mobilized to reduce the interest expense. Therefore the Head of Finance’s analysis on interest expense that it is gone down in 2011 is not accurate. Clearly, no deposit mobilization effort is taking place in the bank and secondly, retail banking and the new cares driving around in the name of sales, are adding to our operating costs.”
The workers’ union indicated also that fees and commissions dropped by 64 percent since the bank, which had always done well in trade finance (LCs) and thrived on inflows from Vigo remittances, amongst others, had stopped those.
With total operating cost increasing by 30 percent, the bank was not generating any material income but rather incurred costs.
In their analysis, the workers commented: “The net effect of the above was a net trading income at a loss position of GH¢12 million. If you add up NPL to the net trading/operating income, the bank has made a loss to date of GH¢20 million.”
They added that such losses raised serious concern.
“From the financials as at June 2011, there is no strategic direction. We have observed that since the beginning of the year, there has been a consistent decline of shareholders’ value. From the accounts, shareholders’ value dropped by GH¢20 million implying that shareholders may have to consider the issue of recapitalization to be able to meet the required capital of GH¢60 million.”
Furthermore, they revealed that the bank’s board approved of six asset products for the consumer banking unit including Merbank Personal, Executive, Scheme Personal Loans, Payday Loan, Cash Secured Loan and Auto Loan.
According to them, the risk assessment of the products was unknown since these were launched with no apparent consideration for the inherent operational risk and its effects on the bank’s risk profile.
Additionally they stated that there was poor deposit growth particularly retail and current accounts and also the creation of new loans.
“It is our candid view that immediate direction is needed to save the bank from imminent collapse. If things continue the same way, we shall have no bank.”
The present situation was foreseen about two years ago, but management, which was impervious to advice from the workers union at the time, continued with its ‘no strategic direction’ callousness.
The bank is now a walking corpse.
By Samuel Boadi
Donald Kaberuka – President of AfDB
The African Development Bank (AfDB) recently concluded a one-week pan-African training workshop for African regulators of derivatives and commodities exchanges in Abidjan, Côte d’Ivoire.
At the opening ceremony, Job Essis N’Guessan, a representative of the Ivoirian Minister of Commerce, stressed the importance of commodities and derivatives markets, especially after the global food crisis of 2007 and the global financial crisis of 2008.
He stated that as the environment in Africa is becoming increasingly conducive to investment, there is need to make sure that investor interest translates to an improvement in Africa’s ability to develop itself.
The workshop provided participants, representing 30 African countries with strategic and technical skills, to assist African securities and capital markets authorities develop legal and regulatory frameworks for derivatives and commodities exchanges.
On behalf of the official representation of the AfDB’s Headquarters in Côte d’Ivoire (ROSA), Chief Country Programme Officer Sidi Drissi said the training session would support the African Union’s 2005 Arusha Plan of Action and Declaration on African Commodities.
The Plan of Action and Declaration highlights the importance of efficient financial and commodity markets as a prerequisite for equitable, inclusive and sustainable development.
“Having well-trained regulators is important for the proper functioning of markets,” he declared.
For participants from Kenya, this training comes at a particularly opportune moment, as the country is poised to license a Futures and Derivatives Exchange by August 2013.
“The training exposed us to other aspects of futures and derivatives regulation that we will be grappling with once the CMA has licensed the successful applicants for establishment of Futures Exchange, notably contract creation, licensing and monitoring of market intermediaries, clearing and settlement and market manipulation,” said Luke Ombara, acting Director of Regulatory Policy and Strategy at Kenya’s Capital Markets Authority (CMA).
Keith Mukami of Bourse Africa Limited, another participant at the training workshop, described the sort of capacity-building that the workshop provides as “the cornerstone to building sustainable and well regulated African commodity markets in the long term.”
The training workshop, the first in a series of programmes on market regulations, was jointly organized by the African Development Institute and the NEPAD, Regional Integration and Trade Department, both of the AfDB.
A business desk report
William Atta Krofa
The Ghana Chamber of Commerce and Industry (GCCI) has announced that it will soon introduce a shipping line that will help facilitate trade between West and Central Africa.
Wilson Atta-Krofah, immediate-past President of the Federation of West African Chambers of Commerce and Industry, disclosed this when President and board members of GCCI, paid a courtesy call on the Minister of State in charge of Private-Public Partnerships, Rashid Pelpuo at the Presidency.
Mr. Atta-Krofah said the introduction of the shipping line would make trading across the borders cheaper.
He said GCCI is collaborating with its sister organizations in West and Central Africa and the Economic Community of West African States (ECOWAS) to introduce the shipping line.
According to him, ECOWAS has promised $100,000 towards the realization of the shipping line.
Atta-Krofah said, “Trading by sea will enable us to avoid some of the problems we encounter when trading by road which includes road blocks and barriers at the borders,” said
He revealed that the Ghana Chamber of Commerce and Industry is spearheading the integration of West Africa.
Atta-Krofah said, “We think that the West Africa market provide a very big opportunity for Ghanaians to expand their businesses. Fortunately, Ghana is at the center in West Africa and the world at large so if we can get our other African countries to corporate with us to make the ECOWAS trade liberalization policy work, it will enable us to trade across all borders and expand our markets.”
He said the quality of Ghanaian products is far superior to that of any other country in West Africa, adding that “this has made demand for Ghanaian products in West and other parts of Africa very high.”
Atta-Krofah called on government to support the initiative since Ghana stands to benefit greatly.
By Cephas Larbi
Aidan Heavey – CEO of Tullow Oil Plc
Tullow Oil Plc delivered strong financial results in 2012 and significantly strengthened its balance sheet through portfolio activity and refinancing.
Operating profit grew 5 percent to $1.2 billion compared to $1.1 billion in 2011, representing an increase in sales volumes.
The company’s gain on the farm-down in Uganda was largely offset by a significant increase in total exploration write-offs as it took action to reshape its portfolio.
Production from its Jubilee field, which was its largest producing asset, was fully remediated in 2012 at a lower cost than expected.
Aidan Heavey, Chief Executive Officer (CEO) of Tullow Oil PLC, who disclosed this at the company’s 2nd Investor Forum, yesterday in Accra said sales revenue grew 2 percent to $3.2 billion principally as a result of a 2 percent increase in sales volumes.
Profit from continuing activities before tax was up 4 percent to $1.1 billion as a result of a combination of factors.
These included $40 million increase in sales revenue, $70 million in pre-tax gain on Uganda farm-down, which was partly offset by an increase in exploration write-downs of $550 million and higher costs.
Profits for the year from continuing activities decreased three percent to $666 million compared to $689 million in 2011 while earnings per share decreased by 5 percent to 68.8 cents compared to 72.5 cents recorded in 2011.
On production and commodity prices, he indicated that working interest production averaged 79,200 barrels of oil per day, an increase of 1 percent compared to 78,200 recorded for 2011.
“The increase was primarily due to production from the Jubilee field offset by decline in mature fields. Sales volumes averaged 68,000 barrels of oil per day up 2 percent compared to the figure recorded in 2011.
“On average, oil prices in 2012 were consistent with 2011 levels. Realized oil price after hedging for 2012 was US$108.0/bbl.”
He said that underlying cash operating costs, which includes depletion and amortization and movements on the underlift/overlift, amounted to $437 million, adding that the increase of 8 percent was principally due to a higher proportion of fixed operating cost on mature fields with declining production
Write-offs associated with unsuccessful exploration activities during the year under review in Guyana, Ghana, Sierra Leone, Cote d’Ivoire, Suriname, Tanzania and Uganda, as well as new venture activities and licence relinquishments totaled $300 million.
“When the unsuccessful 2012 exploration activities is added to the half-year write-off of $371 million, the total write-off for 2012 was $671 million.”
Shareholders on the register of the company will receive their final dividend of 8.0 pence per share tomorrow, May 16, 2013.
The initial dividend for the first part of 2012 was 4 pence per share.
By Samuel Boadi
Haruna Iddrisu
The United Nations Industrial Development Organization (UNIDO) office in Ghana is set to launch the second phase of a trade capacity-building programme aimed at improving standards.
The programme being implemented in conjunction with the Government of Ghana is funded by the Swiss Government through its State Secretariat for Economic Affairs (SECO). It would be launched in Accra.
The four-year programme, which will run from 2013 to 2016, is aimed at supporting Ghana’s integration into world markets by developing a competitive and sustainable export economy compliant with trade related standards.
According to the Chief Technical Advisor of the project, Victor Mills, the programme, which is in cooperation with the Ministry of Trade & Industry (MOTI), is expected to focus on selected export products including fruits such as mangoes and pineapples, cocoa, fish and wood value chains.
“The key objective is to ensure that the selected agricultural products improve their sustainability, quality and export competitiveness by complying with international standards and having access to conformity assessment services,” he said.
As part of the programme, UNIDO will conduct an in-depth value chain analysis on the products during the period to identify particular areas of intervention and development opportunities in fostering standard compliance and trade capacity building.
The Swiss Government, through SECO, continues to promote sustainable economic growth in developing countries and has funded the programme since 2007.
Phase I of the UNIDO/SECO/MOTI collaboration supported the accreditation of testing laboratories at the Ghana Standards Authority in the field of Microbiology and Pesticide Residue for Ghanaian exporters.
These laboratories will test to ensure food safety from microbiological contamination, timely detection of the maximum permissible pesticide levels in local and exported foods and eliminate the need for re-testing in another country.
The programme also offered specific technical assistance through training programmes and study tours and provision of equipment to strengthen institutions in areas such as standardization, testing, traceability, inspection and management system certification.
The launch of the Phase II of the programme therefore expands the scope to ensure that upgraded services reach private sector actors throughout the value-chain and sustainable standards are promoted and implemented.
A business desk report
