GB&F April 2014

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APRIL 2014 / ISSUE 035 GH¢10.00

s Five face e behind thnce a microfin boom

South Africa USA........................................... $5.00 UNITED KINGDOM...................... £3.00 EUROPE..................................... €3.50 AUSTRALIA.............................. AS5.00 CFA ZONE........................... CFA 2,000 OTHER AFRICAN COUNTRIES.. US$4.00

THE FIRST BUSINESS READ IN GHANA

- Tracing the journey of an economic giant

Follow us online at www.ghanabizfinance.com

has been on the table for a while, missing the necessary signatures.

With indications pointing towards ratification, we look at the possible ramifications of the deal and the opposition to it.

GB&F General Manager Josiah Spio-Garbrah kojosegu@yahoo.co.uk Editor Eric Kwame Amesimeku kwame.eric@gmail.com

22... Small Business

Deputy Editor S. Kwame Appiah

Are entrepreneurs and the selfemployed the same? What are the ways in which they differ?

We attempt to put to rest a much-vexed question.

Columnists Dr. Michael Agyekum Addo Jerry Halm Ebo Bhavnani Yvonne MacCarthy Selorm Branttie Contributors Martin Luther King Oppong Baah Anthony Sedzro Georgina Adjei Ayuureyisiya Kapini Atafori

APRIL 2014 / ISSUE 035

Art-Graphics Manager, Design Benjamin Tetteh

Front Cover: Her Excellency Jeannette Ndhlovu

Design & Production Daniel Sackey Yobo

South African High Commissioner to Ghana

Circulation & Subscription Jeffrey Dapaah Editorial Committee Prof. Paul N. Buatsi Prof. Kwame Addo Ms. Johanna Awotwi Mr. Gaddy Laryea Mr. Ray de Bono Mr. Nana Robert Mensah Mr. Frederick Alipui Ms. Dede-Esi Amanor-Wilks Ms. Nana Spio-Garbrah Office Location Ghana Business & Finance African Business Media House No. 7 Lamb Street (off Farrar Avenue) Adabraka, Accra Ghana Mailing Address P. O. Box O 772, Osu, Accra, Ghana Tel: +233 302 240 786 Fax: +233 302 240 783 ghanabusinessfinance@gmail.com Brand Advisor Dmax Studios in Malta, EU. (www.dmax.tv) Credits GNA myjoyonline Daily Graphic Bloomberg radioxyzonline.com citifmonline Mergermarket Group Corporate Council on Africa ghanabusinessnews.com

Ghana Business & Finance magazine is published by

24... Banking and Finance

Contents 6...

News Briefs The highlights of events and trends in business and finance in Ghana and the African continent from the past month.

27... Four of the local banks are now

headed by women. While that is a rather small percentage, it constitutes a giant step toward giving the women recognition that is commensurate to their efforts in the workplace. Are we there yet?

14... Cover Twenty years ago, the first free, multiracial elections were held in South Africa, unleashing the latent energy of an African economic giant that had been deliberately denied a place in the comity of nations on account of the terrible apartheid policy.

Two decades on, how well has the Rainbow Nation done for itself and the rest of Africa?

19... Trade and Industry The Economic Partnership Agreement proposed by the European Union to ease trade with its African counterparts

Find us online at www.ghanabizfinance.com All information contained within this magazine is the property of Ghana Business & Finance and is not to be used without written authorisation from the publishers. Although every effort is made to ensure the correctness of information submitted for publication, the magazine may inadvertently contain technical inaccuracies or typographical errors. Ghana Business & Finance assumes no responsibility for errors or omissions in this publication or other documents that are referenced by or linked to this publication.

APRIL 2014

Telecom companies and the Bank of Ghana are quite keen to promote cellular based financial systems. We look at the concept, the opportunities it offers and how Ghana is doing in its efforts to embrace a system that may well define the future of finance.

Banking & Finance: Page 20 linkedin.com/GhanaBusiness&Finance facebook.com/GBandF @ghana_business

GHANA BUSINESS & FINANCE

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Letters to the Editor send your letters to the editor at kwame.eric@gmail.com

32... Infrastructure The Ghana Infrastructure Fund announced by the government this year is yet to take off but already, many see it as a potential shot in the arm that the lethargic construction industry desperately needs. We look at the nature and scope of the policy.

34... In Focus Micro-finance is one of the more vibrant sub-sectors of the Ghanaian economy. At the forefront have been some young Ghanaians whose leadership and innovation have powered the burgeoning industry. We profile five of them.

37... Insight The Chief Executive Officer of the Kama Group, shares some of his rich experience. In this issue, he focuses on how respect for time translates into success.

38... Information Communication Technology As access to ICT expands in Ghana, is the country ripe for an e-Commerce boom?

Real Estate and Construction: Page 30

40... Energy We look at the prospects for the Ghana Gas Project, which comes on stream in July this year.

43... Mining Volatility in the price of Ghana’s main export, gold, could jeopardize Ghana’s push for more revenue as the country continues to grapple with a ballooning deficit.

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

47... Global Outlook As emerging markets seek to sustain their growth, energy will be one of their greatest concerns.

Which should be good news for renewable energy producers, to whom many of these countries will now look to boost their energy capacities.

question. Dr Agyekum Addo, Chief Executive Officer of the Kama Group knows a thing or two about it and after reading his book, so could you.

52... Management

A key lesson in sales is gleaned from an unlikely source – a yoghurt seller in a trotro station.

54... Customer service can define a business but even customers have a role to play.

56... Executive Selection

Job openings from corporate Ghana.

58... Commodities

Latest commodity prices in Ghana as compiled by Esoko.

50... Recommended Reading Mining : Page 43

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For people and business and even those outside it, wealth creation is a fundamental

GHANA BUSINESS & FINANCE

Management: Page 54

APRIL 2014

As we go to press, the country is once again under a power rationing programme.

in the Greater Accra region are good examples of what fruitful public-private sector collaborations could bring.

This recurring energy problem, which policy makers have been unable to find conclusive solutions to, clearly illustrates the lack of strategic national planning that has characterised the nation’s development for ages. The effects of such load shedding programmes on industry alone, though not quantified, are enormous. For a country striving for economic transformation, the least it can do is guarantee its industries, critical resources such as energy.

But we can and must go further.

The demand for energy in Ghana, quite clearly, has far outstripped supply. With an overall installed capacity of 2,845 MW – from mainly hydro and thermal facilities – it has had to embark in load management programmes at several points during the last decade. Although the current administration has projected to increase the country’s installed capacity to 5,000 MW by 2016, it is easy to be skeptical in the absence of a clear, costed, action-based plan to achieve this.

Each year, we experience an increase of some ten percent in demand for power. Available data indicates that, from the year 2000 to 2009, residential demand for electricity rose by about 61 percent, while industrial demand over the same period stood above 64 percent. This is known to policy makers. It is also known to them that to meet these increases, at least 300 MW must be added to the national capacity each year. This has not, strictly speaking, been attended to.

It is time to resolve the energy problem and conclusively so. In seeking solutions, policy makers must be minded of the need to generate capacity for the nation we want to be, rather than the nation we currently are.

Perhaps, we need to examine the structure of energy provision and whether independent power producers can play a greater role under the system. Currently, the Electricity Company of Ghana, notoriously inefficient and bogged down by revenue collection issues, has the sole mandate to sell directly to Ghanaians. Government should be bold enough to allow a rival firm to build and utilize its own distribution systems.

If we were looking for reasons to pay closer attention to alternative, renewable, sources of energy, our recent challenges with gas coming out of Nigeria, should be more than enough.

We note that government has sought to stimulate this sector by among others, the feed-in tariff policy. Here again, we ask for more.

In our search for growth, there can be no greater imperative than that of securing enough energy to power that growth. If we are serious about investment, industralisation and sustainable job creation, there can be no greater exigency. This current energy crisis, we say, should be among the last of its kind.

Eric Kwame Amesimeku Editor Tel: 0244 985 098 Email: kwame.eric@gmail.com

Naturally, the biggest challenge is finance. With seventy percent of the country’s own internally generated funds going into the payment of salaries for public sector workers alone, a widening deficit and grants currently tight, government is hamstrung in its efforts to channel adequate investments into the power sector.

Thus, it is heartwarming that government has seen the need to engage the private sector to help deal with the challenge.

The various thermal power generating plants at Aboadze, near Takoradi in the Western region and other such projects in Tema

APRIL 2014

GHANA BUSINESS & FINANCE

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EDITOR’S SUITE

Time to end energy crises

BRIEFS

Banking

South Africa’s KTH to acquire a minority stake in Fidelity the company says is the first of many to come, should herald further opportunities for South African firms in Ghana.

Fidelity Bank will, subject to approval from the central bank, have new partners in South African investment firm, Kagiso Tiso Holdings (KTH). The USD 35 million deal will give KTH a minority stake in Ghana’s sixth largest bank and is an expression of the company’s ambition to increase its presence across the continent. In addition to equity, KTH is also taking up convertible preference shares in Fidelity Bank which would increase its stake on conversion. The firm is joining other investors such as Amethis Finance and Edmond de Rothschild Europportunities II which have shown confidence in the Ghanaian bank.

“We expect KTH’s investment in Fidelity to create opportunities for our South African portfolio companies through access to the fast growing Ghanaian market. Similarly, for Fidelity, this opens channels for access to South African firms as customers and South African financial institutions as partners,” Jacob Hinson, KTH’s chief investment officer is reported to have said.

KTH arrives in Ghana on the heels of South African firms such as Stanbic Bank and shopping giants, Shoprite.

Fidelity began as a discount house in 1998 and was granted a universal banking license in 2006. Since then, it has grown into one of the local banking scene’s strongest brands with a network of 50 branches and counting.

Welcoming the investment, the Managing Director of Fidelity Bank Ghana, Edward Effah said “KTH’s investment is a vote of confidence in the board and management of the bank. Our strategy is to prudently grow our asset base and become a leading bank in Ghana. We welcome KTH’s investment, which will allow us to continue to drive our strategy and in addition, have access to South African markets.”

KTH, which started as a Broad-Based Black Economic Empowerment initiative (BBBEE), has an investment base of about Rand 10 billion. In the 1990s, it was established as Kagiso Trust Investment, merging with Tiso Holdings in 2011 to form KTH. It is expected that the investment, which

Vuyisa Nkonyeni, Chief Executive Officer of KTH described the deal as an important milestone in the firm’s Pan-African strategy. “This transaction is in line with our strategy and is testament to our focus on building our portfolio through investing in fast-growing regions and sectors,” he said.

E-Payments

Access Bank launches two payment cards While concerns about user uptake and usage numbers persist, Ghanaian banks seem determined to push ahead in their quest for a cash-lite economy. The recent launch of Access Bank’s Visa Prepaid Card in Accra is the latest of such efforts. Users of the card will be able to withdraw cash and make payments at Automatic Teller Machines (ATMs) and vendors worldwide.

The push for cash-lite transactions is being spearheaded and encouraged by the Bank of Ghana, itself behind the ezwich card, which many have slammed as being underwhelming in its effect and usage in the market. The Bank’s head of Financial Stability, Dr Benjamin Amoah, gave expression to this desire at the launch, noting in his speech that Access Bank’s Prepaid Visa Card was in keeping with the BoG’s vision and that it would help improve financial inclusion and integrated payment systems.

Access Bank also launched the AccessLink Card, which gives holders access to their cash around-the-clock at ATMs, Point of Sale devices and e-channels bearing the “gh-link” logo. The card comes in two forms – Classic, targeted at salaried workers

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GHANA BUSINESS & FINANCE

and traders and Gold, which the bank says is best used by high net worth individuals. The card will be linked to customers’ accounts and be provided to current and potential customers free of charge for their transactions.

While Access Bank insists that the Visa Prepaid Card is the first to be provided by a financial intermediary operating in the country, the card joins a few others in the e-payments ecosystem that include offerings such as Mastercard from Ghana Commercial Bank and GT Bank.

The Bank of Ghana is keen to provide the infrastructure to enable e-payments to flourish. That includes the creation and expansion of the gh-link system that supports interbank card withdrawals. The bank is currently deploying 2,500 hybrid Point of Sale devices. According to the Chief Executive Officer of Ghana Interbank Payment and Settlement Systems, the gh-link system and ATMs will be fully supportive of the AccessLink Cards, giving the holders access to over 1000 ATMs nationwide.

APRIL 2014

BRIEFS

Agriculture

Currency

What is the Cedi’s true value?

Government, GGBL to give Cassava farmers a boost The Government of Ghana and beverage giant, Guinness Ghana Breweries Limited are on the verge of a deal to resuscitate the Ayensu Starch Factory, bringing a needed boost to cassava production in the country.

In the midst of the debate over the falling value of the Cedi against nearly all its major trading currencies, a new angle has been broached by the Chief Executive of Dalex Finance and Leasing Company, Kenneth Kwamina Thompson. Mr Thompson believes that the national currency’s value is artificially high and it must be allowed to fall to its true level, which he believes is about GHc 5 to the dollar.

Cassava farmers already have lots to be grateful for to GGBL, following the launch of its Ruut beer line which is made from cassava exclusively sourced from local farms. Accra Brewery Limited also produces Eagle beer, which relies on similar sources. Under the anticipated new deal, which has been on the table for a year, GGBL would take charge of revamping the Ayensu Factory, one of the highlights of the President’s Special Initiatives under President Kufour but which has been dormant for some time.

“The cedi will fall; it should be allowed to fall because any actions we take to stop the fall of the local currency are only short term. The true value of the cedi may be GHc 5 to USD 1,” local media report him as saying.

Speaking on the deal, the Minister of Trade and Industry, Haruna Iddrisu, revealed that the deal had been delayed on account of the country’s procurement processes which had to be fully complied with. He was however hopeful that it would be concluded by June, this year. The government, he said, was very happy about GGBL’s use of local raw materials in its production. The essence of the deal, the Minister said, is to “boost the production of the Ayensu Starch Factory to significantly increase cassava yields and make the crop economically viable to farmers.” The board of directors of the factory has thus been asked to work with the GGBL to ensure the consummation of the deal.

GGBL, so christened after Guinness Ghana Limited’s merger with Ghana Breweries Limited, has been operating in the country for about forty years and currently sources between 30 and 45 per cent of its materials locally, including sorghum, cassava and maize, in its productions from two factories in Accra and Kumasi. Peter Ndegwa, Managing Director of the beverage giant said it intends to scale up the use of local materials to 50 percent.

Messrs Ndegwa and Iddrisu were addressing journalists after the two inspected GGBL’s first spirits packaging and bottling factory in Ghana and Africa. The GHc 9.36 million plant, known as CUBE, features a packaging line consisting of five shipping containers that are connected together to provide a stand-alone blending and bottling operation. Gilbey’s Dry Gin, the first mainstream spirit produced by GGBL under license from its parent company, Diageo, will be blended and bottled in the new plant for distribution in Ghanaian and African markets.

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GHANA BUSINESS & FINANCE

Government finances

Investment incentives; fiscal slippages costing Ghana In the wake of continuing concerns about the country’s fiscal position, ActionAid Ghana has revealed in a report that investment incentives given to foreign companies cost the country about USD 1.2 billion annually. The amount, AAG said, is equivalent to about twice the health budget and half of the education budget.

According to the report, dubbed “Investment Incentives in Ghana: The Cost To Socio-Economic Development,” an analysis of the percentage component of total revenues offered as incentives in different categories showed that in 2012, 41 percent of trade tax revenue was lost through tax exemptions compared to 28 percent of direct tax and VAT revenues. Tax incentives have been a major part of Ghana’s strategy to attract investment into the country and increase exports. ActionAid however believes that the losses should be carefully measured against the expected benefits.

The effect of government’s strategy, the report says, is that trade taxes have declined. Currently Ghana has one of the overall lowest tax rates in the West Africa sub-

APRIL 2014

It is unclear how widely felt Mr Thompson’s views are but there’s a precedent in the country for this type of action. As part of restructuring efforts, devaluation of the currency has been resorted to before, while many felt after redenomination when the cedi achieved parity with the dollar that the situation was in actual fact, less rosy. The cedi now trades at around GHc 2.45 to the dollar.

But that is not all bad news, according to Mr Thompson. “If the cedi falls, our exports become cheaper, so technically we can sell more and help create job opportunities for the teeming unemployed youth,” he argues.

Indeed, he points out that while “other countries are trying to devalue their currency to make their exports cheaper; we seem to take pride in keeping it at an artificial level which is unsustainable.”

The main thrust of his argument may be credible but he’s certainly right that national pride will perhaps make a candid conversation about the cedi’s true value, next to impossible.

region. This may have boosted Ghana’s competitiveness but it has tended to, at the same time, undermine the harmonization of trade and investment regimes across the sub-region through initiatives such as the ECOWAS Common External Tariffs.

With government searching for more funding options given its precarious fiscal position, this report may come as a boost to those within it who favour reducing some incentives, at least, for the near term.

This is more so when the International Monetary Fund and other development partners have limited their support to the government of Ghana over spending concerns. In the past two years, donors have withheld about USD 700 million in support, leading to government having to borrow more to plug the hole created by the withdrawal of support.

In 2013, only 35 percent of the expected GHc 1.26 billion in grants from donors was received and this was partly responsible for the shortfall of GHc 800 million that was recorded. Under government’s plans, domestic revenues are dedicated to payment of salaries, while loans and grants are applied to capital expenditure.

Even as government seeks to reassure donors about its commitment to fiscal discipline, it may find grants and concessionary loans less plentiful than before it became a Middle Income Country; which might lead it to take another look at the amount of money it is prepared to lose in its quest for foreign investment.

APRIL 2014

Economy

BRIEFS

While Mr Thompson agrees with the current wisdom that Ghana’s import dependency is the culprit in the Cedi’s troubles, he views measures announced by the Central Bank in January to arrest the fall as short term measures that will only worsen the situation. He goes further to say that “any attempt to combat our addiction to foreign goods and services using restrictions and bans is doomed to fail.”

IMF bleak on Ghana’s 2014 performance In its latest report on the country, the International Monetary Fund says that Ghana’s fiscal “imbalances” slowed down economic growth in the first half of last year and its GDP growth estimate for 2013, based on data for the first three quarters of the year, stands at 5.5 percent, “well below the levels of recent years.”

The country’s fiscal position has played a role in this economic weakness, with a budget deficit that rose to 10.9 percent of GDP last year, well above the government target of 9 percent.

However, the situation could have been worse. “The overrun would have been higher in the absence of significant revenue measures, the elimination of fuel subsidies, large increases in utility prices and compression of other expenditure,” the IMF said. “The large fiscal deficit, combined with a weaker external environment, led to a widening of the current account deficit to 13 percent of GDP and to further pressure on international reserves,” said the report.

The report says that there are few signs of improvement in Ghana’s economic prospects in 2014. “The weakening growth momentum and inflationary pressures are expected to continue into 2014, calling for urgent measures to address macroeconomic imbalances,” it said. In the absence of further measures, the outlook could deteriorate further, putting the fiscal deficit target of 8.5 percent of GDP at risk.

To see an improvement in the economic outlook, urgent reforms are recommended. “Additional fiscal savings are required to address short-term vulnerabilities, contain rising public debt levels, and reduce interest rates,” the IMF advocates. This will be essential if it is “to stabilize the economy and support private sector development, growth, and employment creation over the medium term.” However, fiscal measures alone are not enough. The IMF also calls for “structural reforms to ensure lasting expenditure discipline,” describing these as the “key to sustainable fiscal consolidation”.

Another area of concern, according to the IMF, is the country’s energy sector. Despite the significant contribution it has been to the economy, the energy sector faces serious challenges, including disruptions to supply in the first half of 2013. The oil sub-sector also desperately needs more drillers, engineers, managers, and production and operation workers to improve the efficiency of the industry.

One of the problems in the energy sector is the dispute between Ghana and Cote d’Ivoire over an area considered to be rich in oil. The disputed area is estimated to have about 2 billion barrels of oil reserves and 1.2 trillion cubic feet of natural gas.

Efforts to resolve the dispute have so far proved inconclusive.

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BRIEFS

Regional payment system for East Africa Investment

Ghana tops in interest rates in Africa Ghana is now ranked first among the twelve African countries with the highest interest rates, according to Ecobank Research’s tracking of interest rates on the continent.

According to the report, the yield on the 91-day and 182-day bill stood at 21.08 and 20.90 percent respectively. Ghana was followed by Malawi and The Gambia with interest rates of more than 15 percent on the short term dated instruments.

ECOWAS’ biggest economy Nigeria recorded interest rates of 12.26 and 14.06 percent on its 91-day and 182-day bills respectively.

Ghana issued its first three-year bond last month which was marginally oversubscribed. While the longer term bonds are infrequently issued, the report said the Central Bank remain keen on extending the yield curve to deepen liquidity and support secondary market price discovery.

The Monetary Policy Committee raised the policy rate to 18 percent in February. This significantly impacted on bond pricing, as yields on the 3-year bond rose significantly to reflect the risk premium associated with uncertainty over the short term Cedi and inflation outlook.

Kenya, Rwanda, Uganda, Burundi and Tanzania have jointly launched a payment system that should see citizens of those countries able to conduct digital cross-border transactions in real time. This is expected to facilitate greater trade between these countries, bridging the gap between them ahead of a proposed East African Monetary Union.

The Payment and Settlement Systems Integration Programme (PSSIP) connects five Central Banks - that of Kenya, Rwanda, Uganda, Tanzania and Burundi - through special technological networking based on a digital fibre-optic backbone to allow seamless and real time transactions.

The project is being executed under the first phase of the EAC Financial Sector Development Programme, following a successful initiation of the East African Payment System last November, which has already seen some success, facilitating cross border mobile cash transfers within the region.

It is expected that the PSSIP will be the basis of a wellfunctioning and integrated Real Time Gross Settlement system in the region that will support the development of Central Securities Depositories and Core Banking Platforms in EAC partner countries. It could also yield an increase in the value of the currencies involved as the need to convert them is eased, at least in the East African region. Other benefits are expected in tourism between member states and in the attractiveness of the region as a whole to foreign investment. The project is being supported by the African Development Bank.

Old Mutual announces proposed dividends for shareholders the close of business on 10 April 2014 and will be announced by the Company on 11 April 2014.

South African insurance giant is proposing to pay shareholders a dividend of 6.0p a share for the year ending 31 December, 2013.

In a release, the company said the dividends, recommended by its directors, would be paid if it is approved at the Annual General Meeting scheduled for 30 May, 2014.

Under its arrangements, shareholders on the South African, Zimbabwe and Malawi branch registers and the Namibian section of the principal register will be paid the local currency cash equivalents of the Final Dividend under a dividend access trust or similar arrangements established in each country.

Shareholders who hold their shares through Euroclear Sweden AB, the Swedish nominee, will be paid the cash equivalent of the Final Dividend in Swedish Kronor. Local currency cash equivalents of the Final Dividend for all five territories will be determined by the company using exchange rates prevailing at

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The company said share certificates for shareholders on the South African register may not be dematerialised or rematerialised between 17 April 2014 and 25 April 2014. Transfers between the registers would also not be allowed between 17 April 2014 and 25 April 2014 for registers excluding South Africa and between 17 April 2014 and 28 April 2014, both dates inclusive, in respect of the South African register.

Old Mutual is a life assurance, asset management, banking and general insurance provider that has been operating out of South Africa since 1845. Currently listed on the London and Johannesburg Stock Exchanges, it serves more than 16 million customers in Africa, the Americas, Asia and Europe, with £294 billion of funds under management from core operations. Last year, it reported profit before tax of £1.6 billion. It recently took up majority shares in Provident Insurance, one of Ghana’s oldest insurance houses.

GHANA BUSINESS & FINANCE

APRIL 2014

BRIEFS

Credit Suisse looks to Africa for business

Africa’s continuing attractiveness is yielding a new sort of interest. Swiss banking group Credit Suisse has announced that it is sending investment bankers to woo African entrepreneurs in its bid to boost its wealth management portfolio on the continent. They are expected to offer advice in areas such as capital raising; trade finance; and mergers and acquisitions.

Credit Suisse says the bankers will be making available private banking services that are usually reserved for clients with incomes upwards of USD 5 million.

Credit Suisse is vying with UBS AG (UBSN) and other Swiss banks for the emerging market millionaires as a global crackdown on tax evasion forces European and American clients to withdraw funds. Credit Suisse is withdrawing from Angola, the Democratic Republic of Congo and some smaller African markets to cut costs, while scaling up its operations in countries such as South Africa, which meet the bank’s criteria for scale and risk.

The number of Africans with at least $1 million of investable assets climbed 9.9 percent to 140,000 in 2012, according to a report published in June by Cap Gemini SA and Royal Bank of Canada. Nigerian millionaires will increase by almost 47 percent to 23,000 over the next four years as higher house and stock prices complement a booming economy, Johannesburgbased New World Wealth has also said in a report.

Credit Suisse, which is scaling back its securities division at a slower pace than UBS, is ending relationships with offshore private banking clients from 83 countries with total assets under management of about 3 billion Swiss francs ($3.4 billion), Chief Financial Officer David Mathers said in October. The bank didn’t disclose specific countries, which have an average of 40 million francs to 45 million francs in assets.

Credit Suisse, the largest of 14 Swiss banks under criminal investigation by the U.S. Department of Justice, helped 22,000 Americans hide as much as $10 billion from the Internal Revenue Service, according to a report by the Senate Permanent Subcommittee on Investigations. Chief Executive Officer Brady Dougan apologized in testimony to the subcommittee on Feb. 26, saying a small group of Swiss-based bankers appear to have broken U.S. law and fooled top managers.

Ethiopia partners Icelandic firm to develop volcano-based power plant The Ethiopian government has signed a deal with Reykjavik Geothermal, an Icelandic company, to build a power plant on an imploded volcano in the Rift Valley that will generate 500 megawatts of electricity by 2020. The licensing of a large-scale private power generation project marks a shift from the country’s previous reliance on domestic investment and Chinese loans to finance infrastructure development.

The Ethiopian government has been operating a statedominated market economy since rebels overthrew a socialist military regime in 1991. While private investment has been encouraged in areas including agriculture and manufacturing, government enterprises control or monopolize financial services, transportation, energy and telecommunications.

Ethiopia’s economy is projected to expand 8 percent in the fiscal year to July 7, the end of the year in the Ethiopian calendar, after increasing at an annual average rate of 9.3 percent for the past four years, according to the IMF. That growth rate is convincing companies to invest in producing electricity from

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ample resources of wind, geothermal, water and sun, Prime Minister Hailemariam Desalegn said Feb. 10. General Electric Co. (GE) is considering investing in the power industry in the country, the government said in January.

Ethiopia is expanding infrastructure as it seeks to become a regional electricity exporter and manufacturing center, and is using its low-cost labor and cheap power from Africa’s secondlargest hydropower resources to attract investment. Reykjavik Geothermal will sell power to the national grid, once it begins producing.

Reykjavik Geothermal expects to conclude deals with three or four investors this month worth $40 million to $80 million, which will help cover the cost of drilling as many as five wells to produce an initial 20 megawatts of power. While other partners may also buy into the project, these original equity providers are expected to maintain their interest and participation through to end of the project.

The deal between the government and Reykjavik Geothermal “signals a more open policy toward foreign direct investment in key economic sectors currently dominated by public enterprises,” according to International Monetary Fund country representative Jan Mikkelsen. It should be replicated in other state-controlled industries to alleviate “infrastructure bottlenecks,” he said.

GHANA BUSINESS & FINANCE

APRIL 2014

BRIEFS

Ecobank corporate turmoil: Tanoh out; Essien in

After months of wrangling, the board of Ecobank in March finally removed its Group Chief Executive Officer, Thierry Tanoh and replaced him with his deputy, Albert Essien. The board also reinstated former finance director, Laurence do Rego, as demanded by Nigeria’s securities regulator, which is investigating alleged breaches of corporate governance.

“Ecobank Transnational Incorporated today announces the departure of Group CEO Mr Thierry Tanoh with effect from 12 March 2014. Effective the same date he will no longer be a director of ETI,” the bank’s holding company said in a statement.

Supporters of Mr Tanoh say his exit was forced by elements of the bank opposed to his attempts to expose and correct abuses of corporate governance that pre-dated his tenure. They say his efforts attracted powerful enemies who were keen to keep hidden, what he may have come to discover. The Ivorian national had been in charge since January 2013, following a stint as Vice President at the International Finance Corporation, the investment arm of the World Bank.

Under Mr Tanoh, profits grew 56 per cent in the first nine months of last year, and his defenders said those results reflected his leadership qualities. His tenure was however marked by controversy over his bonus and by an investigation launched last August by Nigeria’s Securities and Exchange Commission after Ms do Rego told the regulator that Mr Tanoh had pressured her to misstate 2012 financial results. Ecobank denied that allegation, saying Ms do Rego had previously been suspended in a dispute over her qualifications.

A series of high profile defections had brought increased pressure to bear on Mr Tanoh over the last few weeks. Four members of Mr Tanoh’s top five-person committee wrote interim chairman, Andre Siaka, urging the resignation of Mr

Eleni secures funding for Ghana Commodity Exchange Ghana’s commitment to see the creation of a local commodity exchange will soon come to fruition, following an announcement by Eleni, Africa’s premier commodity exchange promoter, that it has secured funding for the project. Eleni said the private-public consortium will receive backing from some of Ghana’s top tier financial institutions such as Databank, Agrifund Manager Ltd, Ecobank Ghana Ltd, UT Bank Ghana Ltd, as well as the International Finance Corporation, 8 Miles Fund and eleni itself, with Ghana government holding a minority stake.

APRIL 2014

Tanoh in order to avert a leadership crisis. That email was sent

by Mr Essien, who was executive director of corporate and investment banking in addition to his duties as deputy CEO. On March 1, Daniel Matjila, non-executive board member representing the bank’s largest shareholder, South Africa’s Public Investment Corporation, also denounced Mr Tanoh in a letter to Mr Siaka and the board, calling for his contract to be terminated immediately. His letter had the support of two other board members, which had amounted to a total of seven who came out publicly to oppose Mr Tanohbefore Tuesday’s meeting.

In an extraordinary general meeting, shareholders voted to implement reforms designed in part to answer the regulator’s criticism. In an apparent snub to Mr Tanoh, they also told the board to reinstate Ms do Rego.

Mr Tanoh was not present at the board meeting in Yaounde, Cameroon, at which the decision was taken.

Mr Essien, who is from Ghana, has been at Ecobank for more than 20 years and rose to deputy group CEO two years ago. Prior to that, Mr Essien was the Regional Head for the Anglophone West Africa (excluding Nigeria) and Eastern and Southern Africa (ESA) regions.

A senior Ecobank official played down the impact of the crisis on the bank. “It’s obviously caused people to be a bit concerned, but if you look at the share price it is slightly down this year, but it is still much higher than at the end of 2012,” the official said.

Ecobank is based in Togo and has a presence in 35 African countries. There are few other pan-African banks, and the continent’s biggest financial institutions are based in South Africa.

The creation of the Ghana Commodity Exchange is part of government’s efforts to create an orderly, transparent and efficient marketing system for Ghana’s key agricultural commodities, as stated most recently in President John Mahama’s 2014 State of the Nation Address to Parliament.

The GCX will start with spot and futures trading of primarily agricultural commodities, including maize, soybeans, paddy rice, palm oil, groundnuts, among others and will introduce other key agricultural and non-agricultural commodities in what is envisaged as a future regional trading platform.

Launched in February, 2013, Eleni LLC is a commodity exchange builder for frontier markets and uses its business model to design, finance, build, technology and operations support services. Among its successes is the Ethiopia Commodity Exchange, which traded $1.4 billion annually in spot contracts in its fourth year of operations.

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COVER STORY

Two decades on, the Rainbow Nation keeps its glow The year 1994 undoubtedly represents the single most significant year in the history of South Africa as a nation.

Indeed it is more important than 1961 when the nation shed the cloak of colonialism from Great Britain and officially gained republican status. The year not only witnessed the end of apartheid – a painfully tortuous national journey that most black South Africans had to endure for a greater part of their lives – but it also heralded the rebirth of what has popularly become known as the Rainbow nation.

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There were however some fears, especially on the part of white South Africans, as the High Commissioner says, that there was going to be war and vengeance but it was the resolve of the leadership of the African National Congress to preserve the oneness of the country and to ensure that everyone, black, white or Indian felt a part of the new system.

Challenges of the new State

Twenty years down the line, the memories of a subjugated people fighting for their freedom in a nation scourged by violence is still fresh in the minds of those who witnessed it firsthand, Ambassador Ndhlovu reveals. But by and large, the dream of black South Africans for a right to selfdetermination and self-rule has been realised. wenty years down the line, the power of a united, racially mixed free nation has been unleashed and the world has come to admire the strides made and the successes chalked by South Africa. These strides are seen in terms of the country’s ability to racially reintegrate peacefully and its impressive resolve to rise above huge challenges to become the biggest and most advanced economy on the African continent.

As South Africans from across the globe switch into the celebratory mood in the month of April to commemorate their twentieth anniversary of their rebirth, GB&F sat with one woman who was involved in the struggle, who saw it all and who believes in the credo that “good will always prevail over evil” - Her Excellency, Jeannette Ndhlovu, the South African High Commission to Ghana.

Ambassador Ndhlovu provides useful insight and a firsthand account into the struggle for freedom and the building of Africa’s economic powerhouse. As it turns out, she was in the trenches when Nelson Mandela, Walter Sisulu and Oliver Tambo and others were leading the fight for freedom.

Beginning of an era

“It was exciting, exhilarating and a reaffirmation of the belief that freedom will always triumph over oppression.” This was how Ambassador Jeannette Ndhlovu put it when asked about the feelings of most South Africans on that fateful day, April 27, 1994 when the first multiracial elections with universal adult suffrage was held in South Africa.

As fate would have it, Nelson Mandela, the African National Congress (ANC) leader who had served a twentyseven year prison term,

As she puts it, “when you talk about political freedom there is no question about the fact that we have achieved it.” Thus, the political aspirations of the black majority have, to a large extent, been realised. However, on the economic front, the injustices caused by apartheid have ensured that structurally, a disproportionate percentage of the black population is still unemployed.

Ambassador Ndhlovu argues that “there has been some progress on the economic front” but she is quick to add that programmes like the “Black Economic Empowerment (BEE) which is meant to bridge the gap between the predominantly poor South Africans and their rich white counterparts, have not reached the greatest number of people.” Access to basic amenities like water and sanitation is a huge problem and “we still have an educational system that continues to experience difficulties.”

“Because of the enormous challenges that the ANC inherited,” she adds, “it will take more than two decades to deal with these issues to get the country to realise the dreams enshrined in the Freedom Charter.”

One other issue is that, there is still a huge percentage of black South Africans who still do not have access to land, a situation which continues to militate against their economic integration and empowerment because as the Ambassador intimates, “land is everything; it is such an important resource for the poor especially.”

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COVER STORY

emerged victorious and became the first black President of South Africa, thereby beginning a new journey for the nation which had hitherto been considered a pariah state in international circles.

COVER STORY Economic successes

South Africa remains the economic powerhouse on the African continent and wields considerable clout in international circles as a result of this. The country, which is a member of the BRICS (an acronym for a grouping of five of the major emerging market economies in the world namely Brazil, Russia, India, China and South Africa), has a mixed economy with a nominal Gross Domestic Product (GDP) of USD 375.944 billion and a GDP at Purchasing Power Parity of USD 608.804 billion as at 2012.

But how did South Africa manage to wriggle out of the lot in a continent fraught with challenges, and in spite of the fact that South Africa, up until 1994, had been isolated internationally?

The answer, though interesting, is not far-fetched. “Apartheid South Africa had been internationally isolated and thus tried to be self-sustaining in all aspects of its economy,” Ambassador Ndhlovu explains.

Available records also show that the apartheid government bequeathed a relatively sophisticated financial and physical infrastructure to the new ANC government, though not without a debt of about ZAR 30 billion (USD 3 billion today).

Meanwhile in 1994, the ANC government led by Nelson Mandela began a series of reforms that would have a profound impact on the structure of the economy and labour markets.

These included trade, industrial and financial sector reforms, all of which were aimed at making the country competitive as it reintegrated into the global economy.

Intra-African trade

After years of sanctions and boycotts as a result of apartheid, South Africa has pursued a vigorous foreign policy to build bridges and win the trust of countries which had hitherto refused to do business with it.

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For leaders of the new nation, the process had to start within the continent of Africa. “Our economy during the apartheid period was largely tied to Western economies which supported the apartheid policy,” Ambassador Ndhlovu reveals. “But with freedom came the realisation that we need to start from our continent - we need to build roads, bridges, railway lines to connect South Africa to the rest of the continent,” she adds.

Data from auditing firm Ernst & Young, for instance, reveals that intra-African investment into projects in Africa grew at an annual compound rate of 23 percent between 2003 and 2011.

Since 2007, this rate has increased to 32 percent, more than double the growth in investment from non-African emerging markets, and almost four times faster than FDI from developed markets. South Africa has been a major contributor to this increase in intra-African trade.

Again, the country has been very active and instrumental in moves to accelerate regional economic integration among the tripartite trade blocs of the Southern African Development Community (SADC), East African Community (EAC), and Common Market for Eastern and Southern Africa (COMESA).

These groups together cover 26 countries that account for 56 percent of Africa’s population. South Africa dominates the region economically, accounting for 41 percent of SADC’s total trade and about 63 percent of its GDP. This vigorous pursuit of good neighbourliness is reflected in South Africa’s trade with the rest of the continent. South African exports to the rest of Africa in 2012, for instance, hit 18 percent of the country’s total exports to the outside market or ZAR 128 billion (USD 12.8 billion) in real terms. Imports from Africa into the South African market have also grown exponentially, rising by about 43 percent to ZAR 82.8 billion (USD 8.2 billion) in 2012, up from ZAR 57.8 billion (USD

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5.7 billion) in 2011. In both instances, South Africa’s trade with the rest of Africa expanded at a substantially faster pace than that with the Eurozone, for example.

Ghana – South African relations

Ghana’s relation with South Africa has seen a dramatic improvement over the past decade or so. Whilst the balance of trade has always been in favour of South Africa, Ghana has benefited immensely from its relations with South Africa.

Ghana has not only benefited from this relationship in terms of exports or imports of goods. In terms of technology transfer and South African businesses entering the Ghanaian market, the data is overwhelming. Whether in the area of telecommunication, banking, real estate and construction, mining or the hospitality industry, South African businesses have trooped into the Ghanaian market in droves.

come to develop Africa for us but ourselves”. FDI is critical for any nation, she says, but ultimately, Africa stands to reap the greatest benefit from increased intracontinental trade.

South Africa is the 14th largest “ South Africa is the 14th investor in Ghana, with investments adding up to more than ZAR On the personal level, Ambassador largest investor in Ghana, 64 billion in the decade between Ndhlovu is every bit the fighter. with investments adding up Indeed, she speaks proudly of her 2003 and April 2013, according to data. There are more than 80 to more than ZAR 64 billion heavy involvement in the underground South African multinational and movement during her school days at in the decade between 2003 the University of Zululand. When her small scale companies registered in Ghana. Ghana is currently ranked brother, Hastings Ndhlovu, himself and April 2013,...” the second largest export market for a freedom fighter, was shot and killed South African goods in West Africa during the June 16, 1976 Soweto after Nigeria. Exports of goods and services from South Africa Uprising, she left with her two other sisters to the United States to Ghana had grown from about USD 138 million in 2010 to to “help strengthen the anti-apartheid student movement and USD 516 million by 2012. pursue her education.” Her two sisters would later join the armed wing of the African National Congress, Umkhonto we This relationship keeps growing and indeed in a recent visit to Sizwe, in Angola for military training.

Ghana, President Jacob Zuma of South Africa reiterated his commitment to seeing the two countries deepen their bilateral Though she had originally wanted to be a surgeon, the decision relations saying, “we are poised to deepen our cooperation by the ANC to appoint her as a member of an Observer further in the fields of tourism, communication, energy, oil and Mission to the United Nations in 1987 effectively ushered her gas, manufacturing, mining, agriculture as well as science and into a career in the diplomatic world. technology.”

After her studies in the US, she returned to South Africa in 1994 and was appointed a Deputy Commissioner of the Leading the charge Independent Electoral Commission of South Africa. However, Her Excellency Jeanette Ndhlovu has been representing her it seemed she was destined to be in the diplomatic service as country’s interest in Ghana for the past five years, having been she was later appointed by the new ANC government to be appointed as South African High Commissioner to Ghana in the Deputy Permanent Representative to the United Nations in 2009. While relations between her country and Ghana had 2004. She was then made the Consul General of the Republic already been cosy and trade was booming prior to her arrival, of South Africa to Los Angeles in October 2004, a position she the impressive advancement made in terms of these two areas occupied until her appointment as the High Commissioner to and the huge opportunities she keeps creating for businesses Ghana in 2010. from these two countries deserve special mention.

Noted for her traditional Zulu hat which she wears with such As she revealed during GB&F’s interactions with her at her affection on every occasion, Ambassador Ndhlovu says by the office, she is an adherent of Kwame Nkrumah, Ghana’s first time her mission in Ghana comes to an end, she wants to see President and his ideology that “the black man is capable of “South African Ghana relations that continue to mutually managing his own affairs.” Armed with such an ideological benefit both countries and results in improved lives for the disposition, Ambassador Ndhlovu has been championing citizens of the respective countries.” improved relations between African countries and increased intra-African trade. She passionately believes that “no one will

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Oppong Baah

On January 24, 2014, European Union (EU) negotiators heaved a sigh of relief in Senegal as the over a decade of difficult negotiations on an Economic Partnership Agreement (EPA) with West Africa smiled on them. After over ten years of objecting to unacceptable demands by the EU in the EPA negotiations the 16-member Economic Community of West African States (ECOWAS) reversed its position and made concessions to the EU. For the first time the ECOWAS Commission and the EU opted for a negotiating process that excluded technical experts, civil society and the private sector from West Africa in order to rush through finalization and signing of the agreement. he EPA between the EU and African, Caribbean and Pacific (ACP) countries has been fraught with disagreement since it was initiated over ten years ago.

bloc is in negotiations. In the interest of the regional solidarity, Ghana is committed to the collective position of ECOWAS in conformity with the region’s common goal”.

While the EU hails the agreement as a new form of partnership that promotes economic growth and poverty reduction in the ACP countries, ACP countries are skeptical about the impact of EPAs on their developmental priorities, especially small holder agricultural development, governmental revenues, unemployment, poverty, and food security.

He continued, “ I am optimistic about the process of negotiation between the EU and ECOWAS and believe that an equitable and development oriented regional EPA agreement will be concluded in line with market access regulations.

They are a type of preferential trade agreement in which both sides agree to reduce the tariffs on import duties and export taxes of their countries.

President John Dramani Mahama in the State of the Nation’s address on February 25, 2014 said “regarding the Economic Partnership Agreement with the EU, the West Africa regional

Proponents of the EPA say the interim EPA (IEPA) has enabled all exports from Ghana access to the EU market duty and quota-free since January 2008, with the exception of rice and sugar which have transitional periods between 2010 and 2015.

Economic analysts, however, do not share President Mahama’s optimism given Africa’s over dependence on external trade, especially its reliance on a narrow basket of primary commodities and a narrow range of external markets, such as the EU in particular, which has resulted in about 40% collapse in Africa’s trade.

Quoting African Development Bank sources, they point out that “this translated into a loss of export earnings of USD 277 billion in 2010.

They point out that analysis of Ghana’s export trend before and within the period of the IEPA reveals that total agricultural export to the EU has not significantly increased compared to what prevailed before the agreement.

His Excellency John Dramani Mahama

APRIL 2014

“The observed marginal increase was influenced mainly by the export of cocoa and cocoa preparations which constitute about 99% of the food stuff category. Vegetable products witnessed only a slight increase and animal products did not record any change over the period,” they explain.

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TRADE & INDUSTRY

The Economic Partnership Agreement (EPA)

TRADE & INDUSTRY

The analysts are of the view that the IEPA has not contributed to any significant growth in the non-traditional export sector, which was anticipated to enjoy some growth as a result of the access to the EU market.

Again, they observe that Ghana’s manufacturing sector contracted in both 2007 and 2009 and grew by less than a percentage point in 2010 and make it clear that the sector would shrink further under EPA since over 95 percent of Ghana’s export to the EU market are primarily raw materials.

“Removing the tariffs on the export of these raw materials, as required under the EPA would make it cheaper for European manufacturers to import them, add value to them and export them back to Ghana also duty-free,” they emphasize.

According to them while this would benefit the Ghanaian consumer in the short term, the entire economy would rather suffer in the long term as this would expose the already vulnerable manufacturing sector to unfair competition and possible collapse with negative implications for Ghanaian jobs “ The region as and poverty reduction.

a whole stands to lose US$1.8 billion annually in import tax revenue in return for EU promises of 6.5 billion Euros for the whole region over a period of five years ”

The Economic Justice Network (EJC) describing the EPA meant for signing and notification come 14 October, 2014, as an “empty shell” explains, among others, that the agreement entitles Europe to whatever favourable trade and economic terms ECOWAS enters into with other countries whose economic structures have more than 10% share of manufacturing.

“This effectively makes Europe a member of ECOWAS and therefore gravely undermines any meaningful south-south cooperation and integrated developmental regionalism in Africa”, it cautions.

The EJN states sadly that West Africa has also conceded to forgo its tariff revenue in return for a promised aid by the EU.

Ghana’s annual tax revenue of over USD 300 million per year, estimated by the Economic Commission for Africa (ECA) would be foregone.

Ghana government puts the loss of tax revenue at about USD 160 million annually.

“The region as a whole stands to lose USD 1.8 billion annually in import tax revenue in return for EU promises of 6.5 billion Euros for the whole region over a period of five years”, it notes.

The Network expresses regret that the authorities in West Africa have been complicit and contributed directly and indirectly to the current situation, blaming Ghana that the EPA she initiated in 2007 had served as constant pressure on the rest of the region.

It condemns the content of the agreement which it says would wipe out jobs in the manufacturing sector, deprive national revenues and makes nonsense of sovereignty and called on the Ghana Government to desist from signing and ratifying the agreement.

In spite of the high pitched opposing voices of the civil society organizations, the signs are clear on the wall that the Government of Ghana through the ECOWAS is poised to sign the EPA in October 2014.

The EPA is expected to create 30 million jobs for the EU while it lasts.

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SMALL BUSINESS

The concepts of Entrepreneurship and Self-employment:

Any distinction?

Ebo Bhavnani

Often seen as the same, the terms entrepreneur and self-employed can easily be confused. Some argue that both terms are the same and can be used interchangeably. However, it can also be argued that there is a distinct difference in the definitions of these terms. For instance, it is argued that a person who is self-employed may share similarities with someone who owns a business or an entrepreneur. Beyond that however, the two terms begin to stray down different paths. In summary, a self-employed individual is technically not an entrepreneur.

In his article, “What is an entrepreneur? A brilliant definition,�

Dan Martin clearly makes a distinction between an entrepreneur and a self-employed person by stating that an entrepreneur sees an opportunity which others do not fully recognize, to meet an unsatisfied demand or to radically improve the performance of an existing business. According to him, entrepreneurs have unquenchable self-belief that an opportunity can be made real through hard work, commitment and the adaptability to learn the lessons of the market.

The self-employed person on the other hand generates his or her own income directly from customers, clients or other organizations as opposed to being an employee of a business or person. In other words, self-employment involves working for oneself while entrepreneurship pertains to pioneering a truly innovative idea or devising a new business model while taking greater financial risks.

that may not exist currently. According to economist Joseph Alois Schumpeter, entrepreneurs are not necessarily motivated by profit but regard their effort as a standard for measuring achievement or success. In general, it is felt that entrepreneurs display a high level of creativity, innovation, management skills and business know-how and are often able to improve the competitiveness and success of a business.

Entrepreneurs tend to identify a market opportunity and exploit it by organizing their resources effectively to accomplish an outcome that changes the dynamics within a given sector or industry.

Other theories relate entrepreneurship to the process of identifying and starting a business venture, sourcing and organizing the required resources and taking both the risks and rewards associated with the venture. Self -employment on the other hand is associated with people who work for themselves instead of working for other people or a company.

Individuals who are self-employed earn a living directly from their own business or services instead of working to earn money for a company.

In contrast self-employed people typically engage in selling their labor to perform a specific set of tasks that are to some extent routine, but might differ in quality depending on who does them.

More often than not, the term entrepreneur applies to someone who creates value by offering a product or service and carving out a niche in the market

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It can be noted from these theories that the distinction between an entrepreneur and a self-employed person revolves around the existence of an innovative business concept or idea and the capacity to develop that concept. As Michael Gerber, a writer on entrepreneurship puts it, “the entrepreneur is not really interested in doing the work; he is interested in creating an innovative way the company operates. In that regard, the entrepreneur is an inventor who loves to invent and not necessarily sell or distribute what is invented.”

income. However, a self-employed person is the owner of the business and earns a living by working for himself/herself and not as an employee for someone else. The entrepreneur however goes a step further by organizing and operating a business or businesses which involve pioneering a truly innovative product or service while taking greater financial risks.

In other words, entrepreneurship is about innovation, creating wealth and taking risk. Entrepreneurs think outside the box for the best ways to succeed and for them it is the passion of the start-up and leading something to success that drives them every day.

In conclusion, there is a distinction between a self-employed In other words, entrepreneurs break new grounds, deviate person and an entrepreneur though often they are used from the conventional path, interchangeably. As Professor explore new territories and Howard Stevenson of Harvard “...the distinction between create something new. They Business School puts it, innovate, not just to be different “entrepreneurship is the pursuit an entrepreneur and a selfand contrary, but achieve new of opportunity beyond resources employed person revolves outcomes, build something controlled.” Or to put it another of value and solve unsolved way, entrepreneurship offers a around the existence of an problems. singular relentless focus and sense of urgency in pioneering a truly innovative business concept This is in stark contrast with innovative idea in the face of or idea and the capacity to a self-employed person, who, resource constraints. This largely is according to Jennine Jacobs non-existent with self-employment develop that concept.” (founder of Independent Fashion which though managed by the Bloggers) is equated to a technical owner, often lacks the attitude for specialist who simply performs as a subcontractor offering pioneering change, innovation, wealth creation and risk taking. similar activities as they did when they were employees. Jennine The fundamental difference therefore is that a self-employed Jacobs, in her article “Why being an entrepreneur is better person works for him or herself instead of an employer for than having a day job” argues that one might be self-employed salary or wage while the entrepreneur exercises initiative by but that’s really just a description of one’s operating mode organizing a venture to take benefit of an opportunity to create and has nothing to do with wealth generation. She makes a wealth. clear distinction between an entrepreneur and a self-employed person by defining entrepreneurship as “the rapid conversion of skills, products and capital into substantially more capital under conditions of risk.”

In her opinion, being an entrepreneur isn’t for everyone but rather for people who love trying new things, changing with the times and thinking of new ways to make money. For her, entrepreneurship isn’t about “freedom,” “lifestyle” or “being your own boss” but about creating wealth quickly. She reiterates that operating your own grocery store isn’t entrepreneurship.

Rather, an entrepreneur’s task is to build a business around a new concept.

However, it is also possible to be an entrepreneur while being employed, as long as the role allows you to rapidly build substantial wealth. For instance, Evan Williams, co¬founder of Twitter wasn’t just employed by Twitter but also had a boss within the company. In that regard, quitting one’s job isn’t by itself going to magically transform one into an entrepreneur, while staying employed doesn’t prevent one from being a very successful entrepreneur.

Thus essentially, the terms self-employed and entrepreneur generally refer to the act of taking one’s financial situation into one’s own hands, rather than relying on an employer for

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Ebo Bhavnani is the Relationship Manager, Public Sector Group, at Guaranty Trust Bank (Ghana) Ltd. He is a Chartered Marketer and holds a Bachelor’s degree in Political Science, an M. Phil in International Relations from the University of Cambridge and a second Master’s degree in International Marketing Management from the University of Leeds.

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SMALL BUSINESS

The self-employed individuals earn income directly from their own business, trade or profession rather than earn a specified salary or wage from an employer.

BANKING & FINANCE

Mobile money:

The future of financial transactions Georgina Adjei

Mobile Financial Services or Mobile Money as it is more commonly referred to, has been identified as the future of the mobile industry in Africa. Many believe that it will cause seismic shifts in economies and across borders. It is therefore not a surprise that countries like Kenya – where the mobile money service has been utilized at a very high rate over the past few years, according to a recent African Development Bank (AfDB) research study – has singled out MPESA as a significant contributory factor to the levels of inflation in Kenya.

MPESA, launched by Safaricom, a Kenyan mobile telephony operator, is considered by many to be the mother of the mobile money revolution in Africa and has seen tremendous user growth since its 2007 launch. Inflation was a major problem in the Kenyan economy in 2011, having hit a high of 19.7 percent towards the end of the year.

On the other hand, mobile money service is a relatively new phenomenon in Ghana. It was first introduced by the telecom company MTN a few years ago but is now being offered by two other telecom companies Tigo and Airtel. Of the more than twenty eight million mobile phone subscribers in Ghana, an estimated 80 percent are deemed to be “unbanked”. This means they conduct their transactions outside the banking sector with no access to financial services. The potential market for this new service is significant since it enables safe and secure money transfers without the use of a bank account, the opening of which amounts to a barrier for many.

The mobile money service gives anyone with a mobile phone the opportunity to transfer money, make cash payments, buy airtime, withdraw money, save money, pay bills and conduct

other financial transactions over the phone. The ease of it means that it could open previously inaccessible financial services to those operating outside of formal sectors such as small scale farmers, traders, craftsmen and women and others involved in small and medium sized businesses.

Given the high percentage of “unbanked” Ghanaians, mobile money services present significant potential advantages for the Ghanaian economy. They can reduce the transaction costs of financial services for the poor, especially those in rural areas where financial services seldom exist. Mobile money saves the cost of travel and time spent visiting the nearest town to access financial services. It provides people with a way to transfer money safely, keep and in some cases, increase their savings.

Perhaps the most interesting effect the mobile money service can have on individuals and households relates to the ease of movement of funds and saving capacity. In the case of Kenya for example, the security associated with keeping money on the MPESA system encouraged people to retain funds for fairly extended periods of time. On the other hand, mobile money also affords an easy and cost effective means of moving money. cont’d on pg 26

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BANKING & FINANCE

At a roundtable forum on Ghana’s burgeoning cashless economy hosted by MTN Ghana and Accra-based radio station, Joy FM, Ebenezer Asante, sales and distribution executive at MTN Ghana, noted that some of the benefits Ghanaian consumers get from a cashless economy included reduced costs in bank note printing and reduced risk from having to carry and transport cash. “The net effect of the benefits is business and economic growth through ecommerce promotion, enhanced individual, business and national productivity, with positive impact on job creation and its attendant multisectorial multiplier effects,” Mr Asante said. Even though Ghana is said to have an estimated 93 percent mobile penetration, approximately 90 percent of business transactions remain cash-based.

Mr Asante told the forum that access to mobile phones combined with the ability to deliver financial services via telephone makes it possible for millions of unbanked consumers in Ghana to participate in financial systems. Additionally, he said, it represents a new market for bankers who once saw the market as unprofitable. “MTN Mobile Money currently has over two million subscribers on its platform and tens of thousands of them now have ewallets where their monies are lodged and saved,” he said. “This creates a money savings habit amongst subscribers and helps in economic growth through better and efficient financial inclusion.”

Commenting on money transfer via mobile phones, Carl Niikoi Ashie, an mcommerce (mobile commerce) specialist at Airtel who works on Airtel Money, said: “The customers can ‘cash in’ by loading money onto their Airtel money wallet, then sending the money to someone else on their phone in a simple process. The person receiving the money can ‘cash out’ by going to any of our outlets and exchanging the evalue for physical cash. We’re seeing tremendous growth in the service across the country, with more cash ins done in the major cities while cash outs are seen predominantly in the smaller towns.”

Mr Ashie sees a lot of evidence that his product is reaching Ghana’s unbanked. “Users do not need to have a bank account to use the service. Currently, there are a lot of monetary transactions that take place outside the confines of the banks and it will take a product like Airtel Money to fill the void while providing a secure, convenient and trustworthy channel

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of transaction,” he argued. “Some customers have also requested products that will allow them to use their Airtel Money wallets for savings and hence enjoy interest on their savings, just as pertains in the traditional bank setting.”

The three telecom operators doing mobile commerce in Ghana have expressed the need for government and the regulators to get actively involved to push the public awareness campaign for the wider acceptance and use of mobile money. They believe that 99.7 percent mobile penetration in Ghana makes mobile money a key driver for the cashless or cash-lite society that government is seeking. They say mobile money requires a massive multiapproach public education on a scale that is too expensive for any individual telco to bear so it behoves the regulators, Bank of Ghana (BOG), the National Communication Authority (NCA), and government to drive it ‘aggressively’. The telcos want government and regulator support in the form of massive and regular endorsements, encouragement of state agencies to use Mobile Money for small payments, supporting funds for the public awareness campaign and media support for same.

Head of Mobile Finance at Tigo Ghana, Selorm Adadevoh agrees with the need for government endorsement but does not think that government must necessarily fund and lead the public education campaign. Government endorsement of mobile money as a safe, secure, reliable and convenient means of financial transaction, he thinks, should be enough. “To date, people think it is just the telcos doing their own thing – they are not aware that mobile money is backed and regulated by the state. I think it is about time the government institutions involved with Mobile Money came out to endorse it and tell other government institutions to use it so that it can grow and accelerate Ghana’s march towards a cashless economy,” he said.

The three telcos doing Mobile Money have over 18 million mobile phone subscribers between them, representing a whopping 73 percent of mobile users in the country. Together with Vodafone, which has an additional 5 million plus subscribers and is about to start Mobile Money soon, they provide a huge platform to propel Ghana to the expected cashless society.

After AITEC Africa’s sixth Banking & Mobile Banking West Africa 2013 forum in Lagos, Nigeria, organisers released a statement singling out Ghana’s efforts in the mobile money space. “Because most central banks are also tied into the old banking paradigm, they don’t fully understand the dynamics of mobile banking, worry about the risks involved and therefore resist it. No doubt they are also encouraged to do so by the banks who don’t want mobile operators encroaching into their space,” the statement said. In Ghana however, it continued, “the central bank has taken the risk of allowing mobile operators to provide money transfer services – and it has benefited millions and reduced money transfer costs substantially.”

It would seem then, that the Bank of Ghana has reached the same conclusion that the forum came to, that “mobile banking is the future, not a fad.”

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BANKING & FINANCE

Is this the age of the woman CEO?

Anthony Sedzro

According to data from Ghana’s 2010 Population Census, women make up more than 50% of the population. In spite of their numerical strength, women are not well represented in top management positions in corporate Ghana.

The Banking and finance industry is no exception. Ghana is not alone, however. In the United Kingdom for instance, girls outperform boys from primary level to university level. Yet in 2012, only two of the FTSE 100 companies had women Chief Executive Officers.

From left: Abiola Bawuah, Nilla Selormey, Subu Giwa-Awu and Patience Akyianu

s at year-end 2012, none of the over twenty-five universal banks in Ghana had a woman CEO or Managing Director. All the banks were run by men. Then in the last six months, the picture changed. Four women have since risen to become the MDs of their respective banks, an unprecedented state of affairs in the local industry.

heads EB-Accion (the micro-finance arm of Ecobank Ghana) and Mrs Sarah Zetterli runs Procredit Bank. Mrs Felicity Acquah finished her tenure as CEO of Exim Guaranty bank last year. In the insurance sub-sector, the biggest insurance company in Ghana, State Insurance Company (SIC) made history last year by appointing Mrs Doris Awo Nkani as its first female MD.

Mrs Patience Akyianu, an accountant and a career banker took over the topmost position at Barclays Bank Ghana in October 2013. Nilla Selormey was appointed in December 2013 as the MD of Merchant Bank after its takeover by Fortiz. Abiola Barwuah took over the helm at United Bank for Africa (UBA) in January this year. And in March, the International Commercial Bank (ICB) announced that it had appointed Subu Giwa-Awu, a Nigerian, as its new MD.

Mrs Helen Lokko, a chartered accountant, blazed a trail when she became the first woman to become MD of Ghana’s biggest bank, the Ghana Commercial Bank (GCB) from the mid 1990s up till the year 2000. Later in January 2003, Mrs Matilda Obeng-Ansong, a career GCB woman also took over the helm.

Women have long excelled in the financial services sector.

In the non-banking financial sector (or micro-finance) there are at least two such female CEOs. Mrs Frances Adu-Mante

Years earlier when the mortgage firm, Home Finance Company was set up, it was Mrs Stephanie Baeta-Ansah, a lawyer, who was asked by the World Bank to lead the company. cont’d on pg 28

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BANKING & FINANCE

According to Mrs Baeta-Ansah, that was a time the World Bank “couldn’t find men”. In 2003 HFC applied to become a universal bank and received a universal banking license in November that year. Stephanie Baeta-Ansah became the first MD of the new HFC bank.

In 2004 Barclays Bank Ghana also appointed Margaret Mwanakatwe, a Zambian to head the oldest bank in the country.

REASONS FOR THE RISE Four female CEOs out of about 28 universal banks represents 14 percent of the total but it is still encouraging. A number of factors account for this.

has been at First Bank of Nigeria, the country’s largest, for more than twenty years. Each of them has a postgraduate degree. Their careers clearly indicate ambitious plans to pursue their goals.

Appointments to CEO positions of listed banks are done by the Boards of Directors. These boards will not appoint a CEO if they are not sure that the latter will bring returns on shareholders’ funds. In other sectors like the Judiciary, entrepreneurship, academia and in government, many women have excelled. Indeed the immediate past Speaker of Parliament was a woman. The immediate past ViceChancellor of the University of Cape Coast, now a Minister of State is a woman. The current Chief Justice of Ghana is also a woman.

The changing role of women Many others are distinguishing is a major factor. In times past, themselves in various fields, “...you need to be many women were home makers. lending credence to the fact that However, the changing structure of women are equally competent. compassionate to your the economy and social evolution There would therefore have been staff and I think women means that many women now no excuse for these boards to have consistently pursue full time careers either withhold appointments from these to supplement the household accomplished women on account of demonstrated that.” income or in furtherance of their their gender. own career ambitions. It is no longer uncommon for women to even delay marriage and childbirth in order to build their career or educational goals.

THE FUTURE This means that it is now possible for a lot more women to With an ever-expanding economy and more women work their way up the corporate ladder. In March 2012, delaying choosing to pursue full time careers like men do, the board chairman of UBA Bank, Kwame Pianim, revealed are we likely to see more women at the top of more banks? in a speech that women made up 53 percent of the entire workforce of UBA Ghana.

UBA’s Abiola Bawuah thinks so. “Yes. Women do not only lead with just their heads but with their hearts as well.

Banking consultant Nana Otuo Acheampong, seems to You need to be compassionate with your staff and I think agree that the trend is changing. “Our banking industry has women have consistently demonstrated that. I believe been having women for a long time. Until recently some of looking at the sterling performance of women leaders, it is them did not want to be career women because of family going to encourage other people to want to use women in commitments but now we are getting into a situation where their organisations. People are beginning to accept women more women are becoming career women,” he explained in more easily and women need to believe in themselves,” she an interview with Accra-based radio station, Citi FM. revealed to Citi Business News.

A closer look at the background of these newly appointed bank heads reveal similar patterns.

Nilla Selormey has over twenty years in the field, gathered through stints at Fidelity, Zenith and Ecobank. Patience Akyianu has worked at Standard Chartered South Africa and Barclays Ghana over the course of two decades. For over ten years, Abiola Bawuah has been building an impressive profile through successful tenures at Strategic African Securities, Calbank, Stanchart and Zenith bank. Giwa-Awu

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Nana Otuo Acheampong concurs. “If you take out the MD position, there are quite a number of general management positions... and there is quite a sizable number of women occupying these general positions. I think gradually you will see some of them rising to come to the level of MDs”.

Anthony Sedzro holds a B.Sc (Admin) degree from the University of Ghana and is a Business Writer. More of his articles can be found on his blog www.tonywelcomes. blogspot.com

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PHOTO GALLERY

The launch of Jerry N. Halm’s book, ‘Customer Romance’ at the African Regent Hotel, Accra 1) Cross section of dignitaries at the high table. 2) Nii Lantey Vanderpuije, Deputy Minister of Trade & Industry unveiling the book 4) Jerry N. Halm, author of the book “Customer Romance” 5) Mr Vanderpuije and other dignitaries unveiling the book 6) Musical performance 7) The book 8) Cross section of guests in attendance 9) Jerry Halm (left) and Mr Vanderpuije exchanging pleasantries.

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PHOTO GALLERY

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Official Launch of International Arts and Handicrafts Trade Show (SIAO 2014) held at the Trade Fair Centre, Accra 2

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1) Mr. Gideon Quarcoo, Chief Executive Officer of Ghana Export Promotion Authority, making a presentation at the official launch of SIAO 2014. 2) A cross section of guests at the event 3) Her Excellency Jeannette Ndhlovu, South Africa Ambassador to Ghana (l) and other dignitaries at the event 4) Dignitaries at the high table 5) Nii Lantey Vanderpuije, Deputy Minister of Trade & Industry addressing the audience 6) Mr Gideon Quarcoo addressing the media 7) l-r Mr Gideon Quarcoo, Mr Vanderpuije and El Hadji Abdoulaye Zongo, Director General of Salon International de L’artisanat de Ouagadougou (SIAO).

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INFRASTRUCTURE

Ghana Infrastructure Fund

A lifeline to the construction industry S. Kwame Appiah

Ghana’s infrastructure deficit is currently estimated to be in excess of GHc 10 billion, requiring investment of between GHc 1.2 and GHc 1.5 billion annually to keep up.

The deficit is in every sector of the economy, spanning transport, housing, education, health, agriculture and even oil and gas. Naturally, this problem has exercised the Ghanaian government. To finance the infrastructure effort, government has largely had to rely on loans and grants. Indeed, government’s spending plans dedicate inflows from loans and grants to capital expenditure, for which, read infrastructure.

But there are challenges to this approach arising out of Ghana’s changing economic circumstances.

For one thing, grants are harder to come by for a number of reasons. Having achieved lower middle income status, the country is now expected to do more to look after itself. The country’s fiscal performance over the last couple of years has also given donors pause in giving it more money. Owing to this, it has had to rely more heavily on loans. Again, its new status as a (lower) middle income country also means that lending terms are sterner and repayment periods shorter. All of these have led to increased pressure on government’s financial position and its commitment to provide adequate infrastructure to facilitate growth and employment.

Government has been looking at a few options. There has been an increased commitment to seeking public private partnership arrangements, including Build, Operate and

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Transfer agreements. A source at the Ministry of Finance however reveals that it has been difficult to agree on terms with some of the companies that have shown interest, primarily on the duration of operation before transfer. Another option that government has explored is dedicating funds from oil revenue to infrastructure development. With oil revenue projections so far exceeding actual delivery, it is unlikely that this source will generate anything near the USD 1 billion plus annually that the nation requires.

The latest in government’s efforts is the Ghana Infrastructure Fund (GIF), announced in the 2014 Budget Statement. The GIF will be the primary prong in the country’s infrastructure effort and will seek and oversee partnerships with the private sector in tackling the infrastructure deficit. A quasi-fiscal body, it will be chaired by the Minister of Finance and have the mandate to pursue independent ratings both locally and internationally. A six member advisory committee headed by

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The fund’s primary source of funding will be budgetary appropriation from sources such as the 2.5% increase in Value Added Tax and the Annual Budget Funding Amount for Amortization (ABFA) and infrastructure development from the oil revenue. It will also rely on escrowed and onlent funds from prior investments; private or public domestic and foreign funds from multilateral institutions and development banks; the capital markets (including the local bourse); pensions and mutual funds (including social security and insurance funds); and other funds. Already, government has allocated 40% of the 2014 ABFA from petroleum receipts to the fund, even though it is yet to be fully operational.

to them. Such projects will draw on the GHc 745 million that the fund is expected to raise and disburse annually.

For example, only 41 percent of Ghana’s 66,200 km road network is considered in good condition. Out of this, some 42,192 km are feeder roads. There is congestion in urban roads and poor connectivity in rural areas. There is also a pressing need for improvements in pavements and road furniture, including drains and signage.

The country’s rail system is also in need of urgent intervention.

Built originally to transport raw materials to the ports, it has not seen any significant expansion or retooling. The current network is indeed, only partly operational.

Old tracks, inadequate and outmoded rolling stocks and other essential facilities severely limit the development of the mining sector in the Western region, and clearly will not be able to support the development of the emerging oil and gas industry. The Government is keen to rehabilitate and modernize the network in the Western region to fully tap its enormous economic potential.

“Power, water and sanitation are also areas in which investors will find opportunities to partner with the fund in its efforts.”

Projects will be chosen by the Minister on the advice of the board, including those that will be undertaken in partnership with the private sector through joint ventures, public private partnerships and special purpose vehicles. It is expected that the fund will issue special bonds to back specific commercial projects. For the government, the establishment of the GIF will lead to a review of its exposure to risks from borrowing. As a body once removed from government, the fund’s operations and liabilities will not be counted against the government and this will have the effect of cleaning up the state’s fiscal profile and ultimately improving government’s ratings.

Government is considering building a Tema–Akosombo rail system as part of the proposed Eastern multimodal corridor and in the long run extend a line from Kumasi towards the North with some lateral extensions to provide cheaper access to areas of natural resources and other areas of high economic potential to facilitate their exploitation, processing and export of raw material where applicable.

There are further opportunities in developing Ghana’s maritime infrastructure. While the seaports of Tema and Takoradi are generally considered well equipped to handle local production and international traders, recent increases in activity have resulted in queues and pushed the need for expansion, as is currently happening with the Takoradi port. There are also opportunities with the inland ports and the available and potential lake/river transport. Power, water and sanitation are also areas in which investors will find opportunities to partner with the fund in its efforts.

However, the real benefits will be for the private sector.

The private sector will be a key cog in the implementation of the Ghana Infrastructure Fund’s plans. It will, first of all, provide a lucrative avenue for big ticket investments for local and international capital. With its focus on undertaking commercially viable infrastructure projects that can pay for themselves and return benefits, the GIF will enable investors to reap on the sort of huge projects that are not normally available

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With a greater pool of available funds, the construction industry could be entering a period of growth that would match that of the real estate industry. Sustained growth, particularly at the higher end of the market, has contributed to something of a glut with occupancy rates struggling to match the supply. With the infrastructure fund coming into effect, we could see some of the investment available to the real estate sector finding its way to funding public infrastructure which would be a good thing for the two allied sectors.

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INFRASTRUCTURE

Ato Ahwoi has since been inaugurated, taxed with setting out the framework for the operations of the GIF. Even before the committee completes its work, there is some information about how the fund, originally mooted by the Ghana Securities & Exchange Commission, will work.

IN FOCUS

THE FUTURE OF GHANAIAN FINANCE

5 faces behind the credit revolution In the past decade, Ghana’s financial services industry has grown to match the country’s economic expansion, buoyed by a soft-touch regulation and a liberal economy. While banks have been at the forefront of the expansion, non-bank financial institutions have undoubtedly also had great impact, particularly on small businesses. From pioneers such as Unique Trust (now UT Bank) and ProCredit to various smaller operations with more geographically focused operations, these institutions have come to fill the gap in finance resulting from ‘capital starvation’ at the lower to middle levels of Ghana’s economic ladder.

Driving the vibrant subsector are some enterprising Ghanaians whose innovation and daring are a testament to their youth and their generation’s willingness to try new ways and new things. Rewarded with success for their courage, these young Ghanaians show not just what can be achieved by sheer grit and determination, but also by understanding the demands of a changing economy. None of them is even close to the end of their careers, which means that they may well be helping shape the financial infrastructure of this country way into the next decade.

MICHAEL ALLAN ASARE MAN CAPITAL LTD. Michael Allan Asare, Chief Executive Officer of Man Capital Ltd is a credit analyst with six years’ experience in auditing, financial analysis, banking and project management. He previously worked as credit manager at Ideal Finance Limited and also with the Melcom Group as Group Assistant Internal Audit Manager. Prior to this, Allan had worked with AngloGold Ashanti as an internal audit officer. Allan also worked with Standard Chartered Bank, and was among the strong pillars who promoted “bancassurance,” for which he received several awards. He also worked at Patterson Simons & Co Ltd (West Africa) as the accountant of Tema Division. He is known to be diligent and driven, acquiring a wealth of experience in his field of work and achieving major successes by sheer dint of hard work. Colleagues say he is an original thinker with native intelligence, great curiosity and a common sense approach to solving workplace problems. He possesses excellent powers of observation and the ability to communicate and suggest change in effective but non-threatening ways. He is both confident and self-critical and also has a sense of humor which gives him good interpersonal relationship skills. He holds a level two certificate in ACCA and a degree in Bachelor of Commerce as well as a Higher National Diploma in Accountancy and Diploma in Business Studies. He is currently a student at the Ghana Stock Exchange.

MICHAEL NYINAKU BEIGE GROUP Michael Nyinaku is the founder and Chief Executive Officer of Beige Group, a company that has come to represent growth and ambition merged together.

Michael founded Beige Group after a successful career as a professional accountant with OIC InternationalGhana, a US based Charity where he served as Director Finance with responsibility for providing financial planning, management, capacity building and technical advice on multiple community development programs that were implemented by the organization in several locations in Ghana and across West Africa. Prior to this he trained as a finance and audit specialist at Deloitte & Touche. Through his drive and visionary leadership, Mike has propelled Beige Capital into becoming one of the fastest growing Savings and Loans companies in Ghana. The Beige Group currently has seven other successful businesses under it in different industry sectors and has an employee base of over 2,000 people with a combined asset base running into millions of dollars. One of its most celebrated forays is into the hospitality industry, the crown of which effort is the Beige Village, regarded as one of the leading golf resorts, spa and conference destination in West Africa. Between 2011 and 2012, it won 5 awards in different categories at the West Africa Tourism Hospitality Awards. An award-winning entrepreneur and widely acknowledged regarded as one of Ghana’s emerging business leaders, Mike is featured prominently in many speaking engagements aimed at promoting thought leadership, youth and business development. In 2012, Mr Nyinaku was named the “Male Youth Personality of the Year and presented the “Gold Award for Financial Excellence” at the Annual National Youth Awards. He won “Best Young Entrepreneur of the year” at the Annual Ghana Entrepreneurship Awards and also picked up the “Young Professional Role Model in Finance Excellence & Tourism” in the 2011 and 2012 Annual YPYC Awards.

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IN FOCUS

WILLIAM ATO ESSIEN FIRST CAPITAL PLUS William Ato Essien founded First Capital Plus in 2009 as a micro-finance company. With the assets of the company increasing, the company became a Savings and Loans company and currently has a market share of 16 percent of advances of savings and loans companies and 19 percent of the sector’s total assets, according to the Bank of Ghana. Ato Essien serves on the Boards of Wade-Laurel Printing Press Limited (which he founded), Wanart Marketing Consult and FCP Trust. He is an astute entrepreneur with a wealth of experience in micro-

financing and business financing structuring. He was named Entrepreneur of the Year (Banking & Finance Category) for the year 2011 by the Ghana Entrepreneurs Foundation for exhibiting an outstanding entrepreneurial spirit and for his achievements in sustaining economic growth, generating employment and innovation in Ghana. Again, in 2012, he emerged as one of the finalists in the “Emerging Entrepreneur” category at the Ernst & Young “Entrepreneur of the Year West Africa” Awards for exhibiting outstanding performance in the areas of entrepreneurial spirit, financial performance, strategic direction, global impact, personal integrity and influence. He is the founder of the William Ato Essien Foundation (WAEF) which was established in June 2011 to provide financial support for educational and health purposes and also to impact the society in general. Mr. Essien is a celebrated motivational speaker and believes that business leaders and leaders in general should harness the power of God in the marketplace to deepen their knowledge and also maximize the effectiveness of their activities. He holds a BSc. (Marketing option) degree from the Central University College and a Certificate in Micro-Finance.

PHILIP OTI MENSAH UNION SAVINGS AND LOANS

GODFRIED OSEI-BOAKYE ABII NATIONAL Godfried is the Managing Director Abii National, a fastgrowing Savings and Loans company founded in 2011.

Godfried has more than thirteen years working experience with over ten years being in the banking industry. He began his banking career in Switzerland, having worked previously in Iceland as a Civil Engineer. Back in Ghana, he worked briefly as an Assistant Registrar at the Central University College and then joined SG-Ghana, then SG-SSB, as a Senior Credit Risk Analyst, later becoming the Bank’s representative to the SG Group on Credit Value and Risk. In 2006 he joined Amalgamated Bank, now Bank of Africa, as the Head of Credit Control Department. There he held a number of senior positions including Head of Credit Control, Group Head of Recoveries and the Head of Risk Management. His expertise in banking spans lending, credit management, credit risk, market risk, operational risk, general risk management and recoveries. As a leader, his core strengths are people management and strategy implementation. He holds a B.Sc. degree in Civil Engineering from the Kwame Nkrumah University of Science and Technology and an M.Sc. degree in Banking and Finance from the University of Lausanne, Switzerland. He is a member of the Global Association of Risk Professionals.

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Philip Mensah has over a decade’s experience in Microenterprise and Small and Medium (SME) scale banking. Prior to joining Union, Philip was the Deputy Managing Director of ProCredit where he achieved consistent growth, profitability and industry leadership. Starting out as a branch manager, Philip achieved spectacular growth that caught the eye of management and led to a meteoric rise culminating in him becoming the first African to join the board of the credit giant. Outside of the company, his abilities had not gone unnoticed either. When the Jospong Group sought to reinvigorate their previously moribund savings and loans outfit, they looked to Mr Mensah, whose ambition and innovation have reflected in the company’s outlook since he took over. Aside from rejuvenating the brand, Mr Mensah has introduced innovations such as Omnibanking to boost access and collection and increasing efficiency through technology. In 2013, the company recorded a 400 percent increase in profits on the previous year. Philip Mensah’s broad areas of expertise are strategy formulation, business planning and development, risk management, institution building and employee development. He holds a BSc. degree in Banking and Finance from the University of Ghana Business School (2002) and has also obtained an Executive Masters’ degree in Project Management from the same school. Mr. Mensah also holds a ProCredit Banker Certificate (MBA equivalent) in International Bank Management from ProCredit Academy (Germany). He is a people-focused and a result-oriented leader.

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INSIGHTS

TIME IS MONEY Dr Michael Agyekum Addo

That time is money means that time is a valuable resource in this world. Therefore, it is better to do things as quickly as possible. This therefore refers to the fact that every minute that goes by costs you money. It is usually used in terms of business where every minute of time wasted is money wasted. In school, this philosophy can be understood to mean that every moment that is not spent in some aspect of learning is time wasted; information missed and answers to questions lost.

ur success or failure in life depends on the right use of time. A student who makes good use of his time will have no difficulty in passing an exam. People have become famous and rich by making good use of time.

To be able to make money, you should be able to manage your time well and that is what is referred to as time management.

Time management is the act of planning and exercising conscious control over the amount of time spent on specific activities, especially toward effectiveness, efficiency and productivity.

My advice to you will be to use your time wisely.

Time is a precious and Time never stops It never shows pity to the poor and never salutes the rich.

It has its own weight and value It cannot be retrieved and It cannot be saved It can only be used as an opportunity and Becomes money if utilized efficiently…

Respect and value of time is very important. For example people who come in late to work every day are thrown out of jobs. If one keeps important clients waiting it will result in loss of business. So we must respect time - not to ourselves but also to others. Keeping work pending and keeping people in

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suspense are some example of habits which are not conducive for a prosperous life.

Procrastination, they say, is a thief of time Such people spend hours watching TV or playing computer games or talking on the phone. Such activities do not benefit us in the least. Success and material prosperity come only to those who understand the value and importance of time.

That is why TIME IS MONEY! In my book which is my legacy to the Ghanaian youth, “7 Principles of Success and Wealth Creation” (pages 16-20), I have enumerated the reasons why Ghanaians complain of poverty but cannot be helped. And it is because of our poor attitude to time. When it rains, nothing works in Ghana.

People promise but are never sure to go by it. They give all kinds of excuses and reasons why something was or could not be done. Normally, behind such excuses is non-performance, behind which is poverty.

Dr Agyekum is an entrepreneur, lecturer, writer and Chairman of Kama Group of Companies.

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ICT

e-Commerce in Ghana

The Next Frontier?

Selorm Branttie

Consumer based e-commerce in Ghana is on the cusp of a great boom. There has, over the past 3 years, been an increased reliance on mobile internet connectivity as a source of information for both personal and business use. In fact, recently, communication tools for peer to peer text based device interaction such as Whatsapp and Facebook messenger have now taken the place of text messaging in a big way.

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capabilities, with systems by banks to integrate payments, as well as the Ghanaian payments regulator, Ghana Interbank Payment and Settlement System (GIPSS) being ready to avail its platform for use.

What will need to happen is the creation of online shopfronts to make use of the infrastructure ecosystem to create the necessary ecosystem. Pioneers are now needed to carve their niche in this space and pave the way for others to follow.

These same devices used for communications can also double as a shop window for the electronic shopper. The mobile Already, there have been a few pacesetters following the example phones, tablets and computers used for daily business and of Nigerian and other African counterparts. The success of personal activity can now be used for another important websites like tonaton.com, which was the most visited Ghanaian part of our lives – making purchase decisions. It is important website last year after Ghanaweb.com and Myjoyonline.com, as therefore that before we can have this phenomenon engaged well as the entry of others like Olxclassifieds.com, zoobashop. in the mainstream, the right background com, adepafie.com, tisu.com, atadie. should be set. A shopper needs a wallet com and others mean that the online “ One of the biggest and a store to shop in, and this principle shopfront is ready to take Ghana by is the same for online shopping or storm. failures of online commerce. business to customer The second factor that will make online transactions has Firstly there must be the right underlying shopping a success is the existence of an technology to make this efficient product delivery channel. One been a lack of faith in viable. By technology, we are of the biggest failures of online business delivery systems and talking about an ecosystem to customer transactions has been a of devices, software, lack of faith in delivery systems and infrastructure.” institutions, knowledge and infrastructure. Poor addressing systems of infrastructure. Innovators in neighbourhoods and residences in urban Ghana have attempted to create an infrastructure areas like Accra and its outliers mean that it is very difficult to that will allow for some of these bits of the deliver products to customers. ecosystem to work together.

This has however been surmounted by some of the e-commerce Companies like SMSGH, DreamOval, providers that exist so far. By identifying landmarks such as Paymenex and others are aggressively creating shops, public places and schools, they have been able to create software platforms that align with financial what they call pick up points to allow customers to pick institutions to allow customers to make products up, and in a bid to ensure trust, quite a few have been payments for goods and services. These giving incentives such as pay on pickup. payment platforms then offer solutions that allow them to be used as digital wallets – one These innovations define what could be a locally acceptable of the foremost requirements for mainstream model of e-commerce, which could then evolve to allow e-commerce activity. device initiated payments where cash would have been used.

There is room for future workarounds that will boost cashless The confidence of a digital wallet allows for transactions in Ghana. This future will only be guaranteed if flexibility of decision making and a wide array there is no direct interference by regulatory forces that would of products and services that consumers could kill the golden goose before it is hatched. buy or to which they could subscribe. It opens up a whole new volume and portfolio of commercial Some of the next biggest Ghanaian enterprises are ready to rise. activity that could really engage businesses and Innovations through cashless payments will be the vector for create massive new opportunities for business that transformation. ICT based services will provide the right streams. grounds for the value chain to open up new markets. How Ghana will take advantage of this is what we all wait to see.

Apart from the fact that e-commerce will make more businesses accessible to customers via the internet, barriers to entry into many business fields will be Selorm Branttie is the Country broken since virtual offices and shops can also be Strategist at mPedigree, a seen and regarded with the same scrutiny and global leader in the fight against acceptability as their brick and mortar counterparts. counterfeiting leveraging the power of mobile and web technologies. He The best revolution to Ghanaian businesses and is also the Communications Director the ease of business activity will be for Businessat the Imani Centre for Policy and to-Customer e-commerce to become mainstream.

The stage has been set with device and software Education, a local think tank.

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ICT

ne of the major considerations for buying a smartphone among a lot of Ghanaian customers is whether it supports Whatsapp or any other such communication tool. This is good news for all stakeholders involved. The fact that interactive device based communication could receive such wide acceptance is the best precursor for the next level of interaction, from personal to business needs.

ENERGY

Ghana’s gas to gear up power & petrochemical industries Ayuureyisiya Kapini Atafori

In June this year, efforts to engineer an economic boom hinged on the supply of natural gas from the country’s oil fields will experience a boost when, as expected, the USD 1 billion Gas Infrastructure Project led by the Ghana National Gas Company becomes fully operational. recent report, ‘Environmental and Social Impact Assessment for the Onshore Processing Plant Component of the Gas Infrastructure Project,’ summarizes the importance of the development of the gas industry. “The utilisation of the natural gas will avoid environmental concerns associated with gas flaring and rather support strategic activities within the petrochemical industry … The project may also enhance the country’s strategic quest to be the preferred exporter of power in the sub-region.”

The mechanical completion of the construction of Ghana Gas’ 150 million metric standard cubic feet per day (MMSCFpd) capacity natural gas processing plant at Atuabo in the Ellembele District, Western Region, is expected by the end of March.

According to Energy Minister Emmanuel Armah Kofi Buah, the plant will start production in June. A 111-kilometre gas pipeline has been constructed from Atuabo to Aboadze, near Takoradi, Ghana’s second port city.

Incorporated in July 2011, Ghana Gas is to build, own and operate the infrastructure required for the gathering, processing, transporting and marketing of natural gas liquids, following the recommendations of a Gas Development Task Force commissioned by the late President John Atta Mills.

Chief Executive Officer of Ghana Gas, Dr George Sipa Yankey is optimistic about the company’s prospects. Quite apart from supplying power and fuel for domestic and commercial needs, the project will supply sorely needed jobs.

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The project – and the company behind it – has not been without c o n t r o v e r s y.

Energy guru, Dr Charles Werko Brobby states that the project is four years behind its completion date. Indeed, the completion date has been shifted forward many a time. Dr Yankey may, however, finally be in a position to answer his critics with something more than excuses.

Ghana has huge proven natural gas deposits. The offshore Jubilee field is estimated to have 1.2 trillion cubic feet of gas but it currently produces about 120 MMSCFpd of associated gas. The field has a projected production span of twenty years.

Some of the Jubilee gas is re-injected into wells because of the government’s zero flaring policy. However, the Jubilee operators have sometimes had to unilaterally flare gas when re-injection would have led to a potentially explosive buildup.

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How can the government and private sector players utilize the gas to increase Ghana’s electricity generation capacity? The country’s present power stock is about 2,845 megawatts (MW).

Government aims to increase this to 5,000 MW by 2020 as part of a vision to make Ghana the power hub of West Africa.

Dr Yankey says Ghana Gas will initially supply about 150 MMSCF of gas to the VRA’s Aboadze Thermal Plant to generate power to supplement the existing national supply. “We are very focused and determined to complete the project by March 31 and test it in April and send gas in May/June to Aboadze,” he told Radio Gold, an Accra-based radio station, last March. “In the event that Aboadze is not ready to receive gas, we will seek independent power producers and other customers to buy the gas,” he said. He added that the gas supply will be uninterrupted since there is enough gas to meet the needs of the country.

The West Africa Gas Pipeline has an agreement to supply Ghana with 120 MMSCF of gas. But WAGP has failed to deliver, offering just 30 MMSCF which did not even flow in March, causing the shutdown of the Tema-based Asogli and other plants and causing the Electricity Company of Ghana to embark on a programme of power rationing to consumers.

services will create employment and provide skills. “Ghana Gas will be the reference point for local content,” he adds.

But Mr Jantuah goes further. “I say onshore [gas] should be left for Ghanaians alone. Even if it is going to take us twenty years to produce it, it should be left to us because it is not the international oil companies that are coming to build capacity in the Ghanaian company. It is we ourselves who will build our capacity.”

Dr Joe Asamoah, an energy expert, informs GB&F that “the way the gas is going to be processed and piped is the right way.

How they are developing it is the right way because the main thing is to provide gas for electricity.” Peter Amewu, Deputy Director of Africa Centre for Energy Policy, also lauded the project to GB&F in an interview. “The development of the gas is a good idea,” he said.

In spite of the giant strides the management of Ghana Gas has made, there are some concerns about its institutional and financial arrangements. Dr Asamoah believes “we need to revamp the old oil and gas policy” while Mr Amewu is concerned about “inconsistencies between BOST [Bulk Oil Storage and Transportation] and Ghana Gas over who is responsible for transportation and maintenance of the gas.

The two have no experience in these.” He further takes on the government for formulating a gas pricing policy “without advocacy, which could provoke public agitation,” adding that it rejected a World Bank recommendation to subcontract the pricing to system experts.

According to the Ministry Energy and Petroleum’s Natural Gas Pricing Policy, gas demand for power generation was expected to start at 150 MMSCFpd in 2013 and increase to about 300 MMSCFpd in 2020 and about 600 MMSCFpd in 2030. Dr Yankey points out that the gas will feed the VRA Aboadze combined light crude oil and gas plant to generate electricity.

“We need the gas to produce power cheaply,’ he says. He adds that the VRA spends $500 million yearly to generate electricity with crude. Deputy Energy Minister John Jinapor, however, told Peace FM, a radio station, last month that the government imports crude worth over USD 3 million every month to fuel VRA’s thermal plants.

What are some of the allied industries that will benefit from development of the gas? The natural gas will be processed into Liquified Petroleum Gas and sold to bulk distributors for onward retail in the country and beyond for industrial and domestic use. Ethylene and methanol will also be produced.

“There is great potential in areas such as petrochemicals, aerosol and fertilizer. However, if we are looking at these types of industries, what are we doing now to position Ghanaian companies to enable them take charge when it starts? We want to make sure that once we get the electricity going; once we get LPG going; once we get petrochemicals going; the companies will be ready to take over. If we leave it for the foreign companies to come in, there will be massive capital flight. However, if we leave it for Ghanaians, the money will stay in Ghana. It will be put in our banks. Our banks can now invest in some of these projects,” Kwame Jantuah, an energy consultant and lawyer, argued in an interview with GB&F. Dr Yankey says the project’s facilities like an LPG plant and loading gantry as well as the provision of goods and support

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The Civil Society Platform on Oil and Gas contends that the approach of the execution of the infrastructure project has not reflected the urgency that ought to have been given to it. It cites the uncertainty that surrounded the financing of the project from the USD 3 billion Chinese Development Bank loan.

“Financing the project with Eurobond, for instance, would have ensured speedy access to funds and would have expedited the execution of the project,” says Dr Steve Manteaw, CSPOG chairperson.

“Everything depends on management. How we plan it [gas] and manage it. Go to [South] Korea today; they have a twentyyear energy development plan. Shouldn’t we be doing that?

So what is it that we want to derive from this resource in the next twenty years? What are the types of industries that we can start?” Jantuah asks.

These are some of the questions that policy makers will have to find answers to, even as they focus on the primary benefits of saving in and accrual of foreign exchange, increased power capacity, infrastructural development in the areas around the project and jobs.

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ENERGY

Ghana Gas is expected to receive 120 MMSCFpd of gas from the Jubilee field. The offshore Saltpond field is awash with 34.3 billion cubic feet (BCF) of gas condensate and 21.9 BCF of natural gas. The Tweneboa, Enyenra and Ntomme (TEN) fields have 367 BCF of associated and non-associated gas. The Sankofa Gye Nyame fields have non-associated gas discoveries in excess of 1,110 BCF.

MINING

Volatile gold prices set to undermine government revenue push Martin-Luther C. King

Fragile gold prices on the world market could worsen Ghana’s already parlous economic situation, increasing pressure on Africa’s second largest producer’s already dwindling foreign reserves. Last year, the country similarly lost a whopping USD 1.3 billion in potential revenue to the phenomenon. old has had an encouraging run at the beginning of this year. Following a crushing 28 per cent decline last year that put an end to a 12-year bull market, the precious metal spiked 10 per cent in the first two months of this year. Spot gold was up 0.2 per cent at USD 1,342.60 an ounce, while U.S. gold futures for this April’s delivery were up USD 4.70 an ounce to USD 1,342.90.

But analysts warn the bubble may not last, and that a pullback could be imminent. Gold is Ghana’s main source of foreign exchange income, accounting for almost 40 percent of the country’s total exports.

After a rather interesting period of soaring gold prices spanning 2011 and 2012, the price of the powerful metal took a nosedive in 2013, forcing the government to abandon proposed windfall APRIL 2014

taxes. From USD 1,224.53 per ounce in 2010, the prices rose to USD 1,571 in 2011 and subsequently to USD 1,669 per ounce in 2012. However, in 2013, the price of the precious mineral began its free fall from its historical highest to its lowest in recent years at USD 1,192 per ounce in June.

In the wake of the unstable prices of gold and its ensuing impact on Ghana’s economy, players in the gold mining industry continue to struggle to keep up their operations.

Newmont Ghana, local subsidiary of American mining firm Newmont Gold, plans to lay off between 500 and 600 of its existing staff by June. The workforce reduction is to streamline Newmont’s cost structure, improve business efficiency and address the near-term production decline at the company’s Ahafo Mine, Adiki O. Ayitevie, Newmont’s director of external affairs and communications has said. Last year, Newmont had also retrenched some 250 workers.

Similarly, Goldfields Ghana Limited (GGL) Tarkwa mine has suspended some of its community development projects due to cash flow difficulties triggered by the slump in gold price on the world market. Affected projects include a hostel facility for the University of Mines and Technology (UMaT) and a maternity unit for Huniso Clinic. Should the current volatility persist, indications are that the job losses in the industry, which employs some tens of thousands of people, would increase. cont’d on pg 44 GHANA BUSINESS & FINANCE

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MINING

Revenue inflows from the sector into government coffers will also fall, as happened in 2013 and that could hamper government’s efforts to trim the deficit. Ghana’s gold production took a dip from 2013 when it fell to 1.083 million ounces, down by some 30,000 ounces from the last quarter of 2012, according to data from the Minerals Commission. This year, the commodity faces a tougher time if predictions of investment analysts are anything to go by.

Analysts say the struggles of the precious metal rests not only with the predominant selling interest among investors currently, with limited positive catalysts going forward. As such, gold is unlikely to regain its former appeal. A substantially more upbeat global economy and bullish stock markets mean that safe but relatively boring investments like gold will suffer. This was the case in 2013 and only a very substantial change in the macro picture next year is likely to support gold.

Also, even as firms around the world seek to merge and acquire in order to spread costs over more ounces of gold, little is seen in Ghana by way of consolidation. A high-profile merger between Asanko (formerly Keegan) and PMI Resources fell through in February of 2013, after PMI shareholders voted down the proposal, and the seemingly perfect partnership hit a wall. PMI said the deal had overvalued Keegan. The $700 million merger would have given the company (which was to be named Asanko) a $340 million cash base, and allowed the two adjacent projects, Obotan and Esaase, to quickly enter production and expand exploration.

Nonetheless, commercial mining in Ghana stands to grow steadily in coming years regardless of the current stagnant market, experts say, citing major mines along the country’s four southern gold belts which are set to enter production this year. For instance, Toronto Stock Exchange-Venture listed PMI Resources expects to start Despite Ghana’s emergence as a production at its Obotan project, which “Ghana’s largest eight commercial oil and gas producer, and boasts 2.43Moz of proven and probable mines, which contribute the firming up in both prices and reserves, this year, eventually producing production of cocoa, mining easily 220,000 ounces per year. Perseus the majority of Ghana’s remains the country’s biggest foreign Mining, listed on both the Australian production, declined 2.6 exchange earner, generating USD Securities Exchange and TSX, reached 5,643.3 million in 2012, roughly the percent in 2012 from the commercial production at its Edikan combined contributions of cocoa and mine early in 2012, and plans to ramp up previous year.” of oil and gas. to 400,000 ounces per year from 2014.

Like most other mines in Ghana, the 4.0Moz Edikan project is The gold industry, categorised into large-scale and small-scale an open-pit, low-grade deposit, with an average 1.4g/t (grams miners, is estimated to directly employ 114,205 people made per ton) at a cut-off grade of 0.8g/t. Signature Metals, which up of professionals like engineers, scientists, accountants and is 76 per cent-owned by LionGold Corp., is now developing administrators; artisans like carpenters, electricians, plumbers, its 1.47Moz Konongo gold deposit in the Ashanti gold belt. machine operators and drivers; and some unskilled labour. An The gold at Konongo, with its historical production of 1.6Moz, extended trend of falling output and depressed prices could now lies within 16 known targets. threaten these jobs in the industry, as well as thousands of dependants. Ghana’s largest eight mines, which contribute the majority of Ghana’s production, declined 2.6 percent in 2012 from the previous year. Costs also increased markedly. The real cost per ounce at the eight largest mines increased 14 per cent from 2011, up to an average of USD 900 per ounce, well above the global average of USD 727.

Naturally, falling production has raised concerns over the viability of commercial mining in Ghana. Many of the country’s main projects are revived mines from decades, or even centuries, past. With gold grades dropping and costs rising sharply, repeated holdups at the local level have forced investors to question whether Ghana’s struggles are due to uncontrollable forces from outside or mismanagement from inside. Union activities have, for instance, complicated mining operations. A weeklong strike at Gold Fields Ghana’s Tarkwa and Damang mines, where the company reportedly lost 14,000 ounces of production, was largely the result of an underperforming profit-share agreement between Gold Fields and its miners.

The Ghana Mineworkers Union, which represents the 3,000 protesters, came under strong criticism for the decision to strike.

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Doubtless, Ghana, being Africa’s second largest gold producer, and with the advantage of proven resources, track record of production and requisite skills and support services, has some advantages. But with the country’s gold mining companies seeing their once enviable profits whittled down by taxation and with more prospects of further tightening of the fiscal regime in which they operate, less may be their motivation to produce more, even as the country nurses hopes for an early return to better pricing of gold in the near term.

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CONFERENCES & EVENTS

2nd Africa Hospitality Show 2014 The “2nd Africa Hospitality show 2014” will connect hotels, airlines, real estate developers, travel and tours, car rentals, food distributors, equipment manufacturers, foodservice suppliers and dealers with qualified buyers, industry executives, chefs and restaurateurs. This event will deliver a profitable opportunity for exhibitors to promote and present their new products and services to an audience of industry professionals.

Date: 7-9 August, 2014 Venue: Accra International Conference Centre Contact: Email tina@litinatoursgh.com, amasefaa@yahoo.com or call 0244260789

Global Energy Security Conference In London

AITEC Banking & Mobile Money West Africa

The Global Energy Security Conference will bring together the world’s leading experts in the field of energy security: governments, corporate, international organisations, NGOs, media and civil society.

Date: 12-13 May, 2014 Venue: Hilton, London Canary Wharf, UK Contact: events@gdforum.org or call +44( 0) 208 853 3293

AITEC Banking & Mobile Money West Africa exhibition & Conference will provide a showcase for technology manufacturers and vendors to demonstrate their latest products and systems to enhance West Africa’s rapidly growing financial services sector.

Date: 09-10 Jul, 2014 Venue: Accra International Conference Centre Contact: Visit 10times.com/ westafrican-mining-power to register

Ghana Oil and Gas Summit The Ghana Oil and Gas Summit brings together international and regional experts, key decision makers, contractors and service providers under one roof.

The 5th Ghana Summit will give you a chance to hear directly from GNPC and the Ministry of Energy & Petroleum on the vast array of new opportunities available to international investment community in Ghana’s Oil and Gas sector.

Date: 8-10 April 2014 Venue: Accra International Conference Centre Contact: Jason Adjalo on +44 20 7978 0096 or Rob Beckman on +44 20 7978 0025

9th International Symposium on Sustainable Leadership (2014 ISL Conference)

West African International Mining & Power Exhibition

Academics, managers and practitioners seeking alternatives to business-as-usual come together to share current research findings and gather fresh insights into sustainable leadership practices at this conference. Sustainable Leadership incorporates those behaviors, practices and systems that create enduring value for all stakeholders of organizations including investors, future generations, customers, suppliers and the local community.

Date: June 3-6, 2014 Venue: Radisson Blu Hotel & Conference Centre, Salzburg, Austria Contact: Visit instituteforsustainableleadership.com

The West African International Mining and Power Exhibition seeks to capitalize on the rapidly growing and fast developing mining sector in Africa, inviting participation from major mining equipment suppliers from different parts of the continent. With Ghana as the host nation, this event serves several countries in Africa, many of whom depend on mining as a significant means of economic development.

Date: 28-30 May, 2014 Venue: Accra International Conference Centre Contact: Visit 10times.com/westafrican-mining-power to register

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GLOBAL WORLD OUTLOOK

Emerging markets to shape renewable energy landscape in 2014 - Ernst & Young Emerging markets will play a critical role in shaping the future of renewable energy in 2014, according to a quarterly report issued by Ernst & Young (EY) titled Renewable Energy Country Attractiveness Index (RECAI). In the most recent of this quarterly issued in late February, it predicts that in spite of an 11 percent dip in global investment in 2013, “an abundance of opportunities in new markets, new technologies and new sources of capital all signal brighter times ahead.”

The pace has already been set

by China, and that country for instance, closed

imperative and an absence of infrastructure legacy.” Ethiopia, Kenya, Indonesia, Malaysia and Uruguay have been singled out as the markets to watch in 2014 in terms of investments into renewable energy. The year 2013, particularly, might not have been a good year for renewable energy but 2014 offers brighter

the gap on the US at the top of the index, installing a record breaking 12 GW of solar capacity in 2013 and ramping up its consolidation effort to accelerate market recovery, according to the report. The trend seems impressive across board. Germany remains in third place on the index, but lost ground following the announcement of subsidy cuts and watered down renewables targets by the new coalition government. Rapid solar market growth and a burgeoning offshore sector helped Japan to replace the UK in fourth place, while the UK continues to be hampered by political infighting and mixed policy measures.

prospects. As renewable energy gathers steam and countries begin to accept it as a viable alternate form of energy, there has been a concomitant rise in investments into this sector of energy generation.

The report states that prolonged energy strategy consultation and anti-renewables legislation have resulted in ranking falls for France and Australia respectively, while ambitious targets and a series of large-scale project announcements have seen India jump to seventh place. Competitive bidding trendsetters Brazil and South Africa have also risen in the index thanks to a plethora of new projects awarded in 2013 auctions.

With emerging markets already attracting more than half of investments going into renewable energy in 2013, it is projected that in 2014, investors will increasingly focus on these markets characterized by “economic and energy demand growth, significant natural resource, an energy security

Commenting on the report, Gil Forer, the Global Cleantech Leader of EY says that “The 2013 fall in global investment reflects another challenging year for the renewable energy sector, with policy uncertainty in particular reducing investor appetite across many markets. However, it also reflects a maturing sector, with falling technology costs filtering through to lower investment requirements: increasing the dollar power per megawatt. We must now therefore focus on what needs to be done to maximize investment and deployment in light of the fact that renewable energy is becoming increasingly cost competitive.” Forer thinks “Innovation in non-generation infrastructure and technology will not only drive efficiencies and boost deployment, but also present a significant investment opportunity across both developed and emerging markets. The digitalization of energy in particular will create a revolution that will have significant social, economic and environmental impact.”

The fundamental growth tools for 2014 according to the report are “resilience, efficiency and effectiveness, technology beyond generation, new markets and innovative financing.”

Governments and businesses are thus urged to consider the value put on energy sector resilience, in light of the industry’s historic inability to absorb economic, political and environmental shocks. cont’d on pg 48

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GLOBAL OUTLOOK

Governments should aim to depoliticize the energy debate to support stable and long-term policy measures, undertake a transparent and objective assessment of the value of energy to determine the most resilient energy mix, and embrace centralized energy planning to counter the uncertainty of the market while still fostering private sector participation. Businesses also have a role to play in addressing their own energy risks, such as commodity price exposure, business continuity and regulatory compliance. This should prompt an increased focus on energy mix optimization that transcends the politics of the boardroom

and identifies opportunities for reduced energy consumption and direct generation or procurement of renewable energy.

Ben Warren, Global Cleantech Transactions Leader of EY also comments that, “in short, ‘efficiency’ and ‘effectiveness’ need to be this year’s buzzwords. The market should be setting its sights on: value chain integration, consolidation on a global scale, repowering, transaction and capital efficiencies and technology improvements. Renewable energy is now a truly global market, and stakeholders must develop a global strategy and a global supply chain, be flexible to market changes, and be willing to go in search of new markets.”

He adds that, “as a capital intensive sector, accessing diverse pools of capital is critical for the future of the industry.

Renewable energy financing is no longer just the remit of banks and utilities. There are deep pools of capital to be tapped but creative solutions and new conduits must be identified to open up the finance markets once again and bridge the gap between investors and projects. The markets that will rise up the RECAI in 2014 are those that embed renewables as a core part of their energy strategy; to stimulate economic growth through addressing the fundamentals of energy security and low cost energy generation.”

RECOMMENDED READING

The Alchemist’s Handbook Dr Agyekum Addo’s guide to making something out of nothing S. Kwame Appiah reviews The Seven Principles of Wealth Creation, Experiences of an Accomplished Entrepreneur, a book by Dr Michael Agyekum Addo. This is an incisive review capturing the very essence of the thoughts of the author of the book.

At the heart of any endeavour lies a desire for success. No one begins a project with failure as the aim. In life – and business particularly – that end is more often than not, material. To meet the demands of life and achieve comfort, one must attain the material success that in turn procures creature comforts and enables more noble undertakings such as charity.

The central proposition of Dr Michael Agyekum Addo’s book, The Seven Principles of Wealth Creation; Experiences of an Accomplished Entrepreneur, is that such success is available to anyone with who desires it. In making this assertion, he takes a firm side in the debate over opportunity in Ghana. To Dr Agyekum Addo, there is no bigger stumbling block to success in Ghana than the unwillingness of the individual, clad as he is wont to be, in excuses and prevarications.

If this seems a tad smug, you must understand that the writer has some justification. In his own much storied life, Dr Addo has brushed off the sort of adversity that in even much more hospitable climes, could easily end up in a life on the street or on the couch with a talk show queen, craving sympathy and charity. Well before his tenth birthday, he’d had to take over his bedridden mother’s vending business to look after his family and himself. The upshot of this was habitual lateness that meant that his welcome at school was always expressed from the business end of the teacher’s cane.

Secondary school had to be on credit, paid for after he left school and became a pupil teacher. Mind you, this career as a pupil teacher also coincided with his pre-university, sixth form studies. Not surprisingly, it had to take two attempts to make it to university, where for what he puts down as antipathy from a lecturer unimpressed with his inauspicious path to a university of “prestige,” it took an extra year to complete the normally four year course.

The challenges would persist into his early business life. The effect of early success was eviction from his premises by a jealous landlord. Fortunately for thousands of Ghanaians who today rely on him for employment and the millions who use his drugs, he persisted. Today, his is one of the leading pharmaceutical brands in the subregion.

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The point to all that is that when Dr Addo says that there are no excuses for failure, his life is testament to the veracity of the his claim. This must be why in his book, the greatest attention is spent on the first two principles – honesty and reliability; and hard work.

Herein can also be gleaned the secret to the success of the man himself. Take honesty and reliability. For someone who began his business basically on credit, there could not have been a greater imperative than to keep his creditors sweet. As he explains, his first responsibility was to these benefactors. Had he been less conscientious in his duties to them, credit lines would have dried up and he may have found himself unable to expand.

To be able to remain reliable, which virtue he takes time to distinguish from honesty, one has to work hard. One may honestly want to pay back one’s debts, but sloth may make it impossible to do so, taking away from one’s reliability. To enjoy the credibility that accrues from honesty and reliability, hard work is required.

From one’s hard work, one is required not to spend all the benefits. That is the third principle. Here, Dr Agyekum Addo challenges Ghanaian traditional norms. To be able to abide by this principle, we are required to spend no more than is necessary. This means resisting pressure from family, friend and

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social groupings to give away some of your income. At least, during the times when there isn’t much of it to give away.

Of the principles, this might be among the most difficult for readers. Ghanaian society requires near constant outlays in the direction of family and friends. Every weekend brings with it outdoorings, engagements, weddings and funerals. All of these require donations and gifts. Quite a number require new clothes. Even when one is not directly attending, one can find oneself having to support a family member who has been invited. To all of these, Dr Agyekum Addo advises firm resistance.

There is of course, good reason. It is important to invest, as the fourth principle sets out. We are shown not just the importance of investment, but the various ways and how to go about it. In trademark clarity, Dr Addo sets out the steps that need to be taken to get the best out of one’s investments.

Attitude comes back to play in the final set of principles. Dr Addo enjoins us not to forget our history. From our history, we find the motivation to persevere. We are given the example of a wealthy man whose habit was to keep and occasionally observe the tattered clothes from his days of poverty to remind him of what he is constantly trying to escape.

Finally, Dr Addo urges fear of God and patience. As an elder of the Church of Pentecost, it is not surprising that religion would be a key part of his approach. This however opens the debate about the role of religion in business. Is wealth borne out of hard work or is it bestowed by a benevolent deity? While the book does not directly address this, it makes a good argument

for incorporating some religious principles into one’s business and professional life. Honesty, for example, should not come as news for readers of the book. This is also a necessary counterpoint to the pursuit of material wealth; a reminder of something higher. As the author points out, “riches do not give happiness; peace does.” Because wealth creation is only instant in mega lottery winnings, the final principle is patience.

Whatever one might feel about the book and the principles outlined in it, the writer has a most compelling piece of evidence – himself. It is hard to argue with the process when the result is so persuasive. The personal examples that litter the book are for exactly this effect. These are, he says, the principles that he himself has lived by; they are the guiding posts to his own success and a legacy that he now seeks to share with the next generation of Ghanaians.

At a hundred and three pages, The Seven Principles of Success and Wealth Creation is a handy guide to anyone wishing to make a success of business and professional life. The language is clear and direct; the examples demonstrate the arguments succinctly and the writer opens himself up so fully to readers that it feels less like a book than an intimate conversation in a living room.

Though liberally strewn with references, it is an easy read that could be a companion on a trip, a bedtime read or lunchtime supplement. Whichever way you read this – and you should – the important thing would be not to miss the invaluable lessons in the book. It may have a deliberately unacademic outlook but this may turn out to the most important book in your career.

You may want to take notes.

MANAGEMENT

What the yoghurt seller taught me Jerry Halm

The sun was at its scorching best that Thursday afternoon as I entered the trotro station. The usual pushing, shoving and struggle for space between both humans and vehicles that characterise the main Kwame Nkrumah Circle trotro station made the situation more unbearable. I finally managed to board the stuffy mini-bus and rightfully felt a sense of relief to have finally escaped “far from the maddening crowd.� As I settled in among the few passengers already in the vehicle I realised the wait was going to be long but I had no other choice than to wait, and pray to God that the vehicle got filled up early enough.

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Interestingly, I saw a particular seller - an ice-cream seller - who was adopting quite an ‘unconventional’ means of selling and was achieving some considerable success. Whilst his colleagues were moving from one vehicle to another trying all means possible to get people to purchase or patronise their wares, this seller picked just one vehicle at a time to practise his sales strategy. Fortunately for the keen observer with an interest in sales that I am, he picked our vehicle which was more than half-full by then.

The sales strategy of this ice-cream seller was simple. He picks a vehicle that was almost full, walks over to it and just stands there with his box on his head without saying a single word. No fanciful selling antics, no shouting his lungs out, just simply standing in a position where anyone who entered the vehicle would see him. When passengers entered the vehicle, all hot, tired and obviously thirsty from trekking under the scorching sun, they would turn to look at the “yoghurt” seller and as if by reflex go for one. At first it came across to me as just coincidental but after four straight scores, I decided to watch out for what would happen the next time someone came along.

Sure enough, a middle-aged woman came along to board the vehicle. Her demeanour was evidently one of someone who had experienced a hard afternoon. After settling in, she glanced around as if for something to buy. Though she looked in the direction of my subject of interest, the yoghurt seller that is, it seemed she was not in the mood for an ice-cream.

A few minutes passed without this woman buying whatever she had in mind. Then as if by some magic she looked at the icecream seller and out of the blue ordered one for herself. Once again, the master salesman had sold without ‘selling’. This gentleman, as was evident, did not possess an MBA (Marketing option) but here he was putting into practise all principles associated with the 4Ps of Marketing. His application of the rules of good product placement was simply awesome. His use of the silent promotional tactics would have been the envy of marketing guru, Philip Kotler.

To all those packed into the trotro that hot afternoon, there was nothing unusual about the whole incident, but not to me.

I found myself being educated by a seemingly ‘uneducated’ fellow right at the trotro station. The sales lessons I learnt from him were quite astounding.

LESSON # 1

The placing of a product (or service) is right only to the extent to which it offers convenience to the consumer.

He realised that the consumers (i.e. we, the honourable patrons of the trotro) would find it more appropriate not to have to shout across the station to call a yoghurt seller. The products were literally right under our nose. To enhance the chances of you increasing your sales, find the most appropriate place to market your wares.

LESSON # 2

In sales, sometimes it pays to adopt a totally different and radical approach to beat off the competition.

As a sales person, you do not always have to “go with the flow.”

Do not do what everybody is doing. Whilst his colleagues were scrambling all over the lorry park, he had placed himself strategically and was reaping the rewards of having gone against the crowd.

LESSON # 3

Patience can sometimes be the best policy in a highly competitive market.

It does not always pay to react to every little change in the business environment. The yoghurt seller knew better not to be moving from one vehicle to another whenever it seems as if he was not going to make any sales at one particular vehicle.

He was patient enough to wait for the sale and truly the sale came. This technique is also used effectively by predators in the animal kingdom. Animals such as spiders and chameleons, and plants such as the Venus’s flytraps do not usually go chasing their preys. Even they know that “good things come to those who wait.”

LESSON # 4

Sometimes the best way to sell is not to attempt to sell at all.

He just stood there as if he had nothing to do. It seemed as if he was not selling whilst that was exactly what he was doing and surprisingly he was closing more sales than most of his competitors. Eventually, our vehicle became full and we got ready to leave the station. As the trotro left the yard, the last lesson of the encounter dawned on me.

LESSON # 5

Life is a school. Everyone you meet is a teacher.

Every encounter is a lesson. Every day could be a time for a test. Therefore, never disregard the teachers you come across everyday nor the daily lessons you are taught in the University of Life.

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 exsellersghana@yahoo.com

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Having resigned myself to doing nothing but wait, I found myself observing the hawkers as they scurried to and fro trying to sell their wares. With all manner of sales strategies acquired at the ‘School of Hard Knocks,’ they tried to outwit both direct and indirect competitors. Sales strategies in the lorry park range from the traditional to the sophisticated (by hawking standards). While some were engaged in shouting at the top of their voices to attract the attention of prospects, others resolved that the best way to grab your attention was to push their wares as close to your nasal cavity as practicable.

MANAGEMENT

The Ghanaian customer deserves better

- and he must demand it to get it

Yvonne MacCarthy

Isn’t it interesting to listen to young entrepreneurs and business owners talk about their inspiration and what made them chose to provide us with a certain product or service? They all had aspirations to provide a service for a particular group of people in exchange for money. This group can be made up of people from all spheres of life - they can be family, friends or strangers who have a genuine need for the product or services proposed. We usually call this group of people CUSTOMERS. No business can survive without customers because the customer is and will always be the lifeline of any business. They are the reason why the entrepreneur had that dream; they are the reason why employees wake up and go to work. They bring in the cash which sustains a business and creates profit and they should be treated as such.

In my line of business, I am exposed to many Ghanaian businesses in various shapes, forms and sizes. My contact with them has left me grappling with a number of questions. What

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exactly is our understanding of Customer Service as Ghanaians?

Is it just the exchange of goods and services for money? What are our expectations of service providers? Many people say that customer service is non-existent in Ghana. Others say it exists but needs a lot of polishing. How true are those comments?

My research has shown that service providers are more interested in doing the cosmetic type of customer service which allows them to put up massive buildings with customer service departments that just don’t work. With the Ghanaian service

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entities of their businesses. It is the a part of the business setup that is absolutely necessary in order for them to provide their day to day services such as enquiries, placing orders, complaints etc., However, it is the way their day to day transactions are handled that tells the customer if the service provider is truly offering good customer service.

These building blocks have their own way of creating unforgettable experiences for customers, only if service providers understand how and when to use them. Unfortunately they don’t but these are the very things they ignore. They do not realize that without these building blocks, they would always fail at providing excellent customer service. How does one prepare a meal, not just any meal but a sumptuous one without knowing the special ingredients required?

But what about the Ghanaian customer himself? What is our understanding of customer service? Do we know what to expect from our service providers? Are we getting what we deserve as customers? Do we know our rights as customers? These are questions that need honest and straightforward answers if we are to improve the general understanding and expectation of customer service in Ghana. Ghanaian customers are oblivious of their rights. In the eyes of the Ghanaian customer, the service provider is doing them a big favor by first of all establishing a business that “A company that is would cater to their need and wants. serious about customer The service provider is allowed to away with so much, because the service will always have its get customer first of all cannot tell when mission statement, vision the service being offered is less than 100 percent.

When asked to define customer service, most Ghanaian service providers – and their agents – will be able to provide beautiful and largely correct answers.

However, serious observation of their day to day activities will show that in practice, their use of these theories and tag lines or slogans leaves much be desired. In other words, there is a disparity between centered on the customer.” Even when they can tell that they their perfect theoretical understanding are receiving bad service, it is almost and their practical understanding of customer service. impossible to take any action because complaints are never taken seriously and complaint procedures tend to further Now let’s look at the customer service philosophy of various aggravate customers. In some cases complaints are made on service providers ( yes there is such a thing as a company’s several occasions to a service provider without any resolution. customer service philosophy and each business should have Sadly, the Ghanaian customer is unable to take it any further one). because we do not have a customer service regulator. In countries with customer service monitoring institutions or A company that is serious about customer service will always regulators, customers have the option of taking their grievances have its mission statement, vision and tag lines or slogans to a third party to resolve the issues. The presence of a regulator centered on the customer. This means that even at the setup level also keeps the service providers on their toes because they know of any business it is important to know who your prospective that the regulator is watching. customers are, what they will want and need and how you as a service provider would ensure through your processes and As customers, we should always expect good customer service services that you exceed your customers’ expectations. every time and demand it when we are denied. We should take time to learn and understand our rights as customers and be The opposite happens to be the case in Ghana. courageous enough to complain until we get good customer service. Where we can’t get it even after complaints, let’s be Most businesses do not understand and appreciate the daring enough to take our business elsewhere because we do science of customer service. There is no initial investment hold the power. We can overcome the culture of poor customer in the areas of customer research or staff training and that is as a nation only if we start making a conscious effort to change one of the most expensive errors that businesses make. Most our attitudes on both sides - the service provider and the Ghanaian service providers, especially those in the banking and customer. telecommunication industry see customer service as necessary

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?”

APRIL 2014

GHANA BUSINESS & FINANCE

55

MANAGEMENT

provider, customer service departments are just CUSTOMER SERVICE DEPARTMENTS. If service providers really aim to exceed the expectations of their customers they would invest in strategies that would strengthen the building blocks of good customer service such as the look and feel of their premises, knowledge levels of staff, staff attitude and cross selling abilities.

EXECUTIVE SELECTION Country Director - Ghana

Lead Development Geologist

Marie Stopes International is looking for a Country Director who will be responsible for developing and delivering a country strategy, including utilising private sector and government approaches to be at the cutting edge service delivery in Ghana. He/she will be an inspirational leader, developing a passionate and committed team of professionals who deliver life-saving services. This experienced team will enable you to focus on the big picture through innovative thinking.

A major oil & gas operating company with assets & developments in Europe & Africa is looking for a Lead Development Geologist to play an active hands-on role in all aspects of the work of the Ghana Development Geology team. Team activities include regular updates / correlations for ongoing wells; geological support in well interpretation / drilling / perforation; geological studies, evaluation and QC.

Location: Accra Minimum Qualification: Candidate must be educated to degree level with relevant postgraduate qualification e.g.

MBA, MSc, MA (desirable) Contact: Visit careers.mariestopes.org.uk to apply

Managing Director A media and advertising organization is looking to hire a strong business leader with an impressive track record to scale up its operations in Ghana. The MD will provide strategic guidance and leadership to the organization, will have full P & L responsibility, and will be responsible for ensuring that the overall business objectives of the organization are achieved Location: Accra Minimum Qualification: Candidate should have a minimum of an MBA or other similar qualification and should have extensive experience in the media/advertising industry. He/ she should also have a minimum of 10 year’s experience at a similar capacity with extensive experience and networks in corporate Ghana.

Contact: Visit www.axishcl.com to apply

56

Location: Takoradi with occasional travels to Accra.

Minimum Qualification: Candidate must have a Masters or PhD Degree in geology with extensive experience in the Oil and Gas industry, working as a Reservoir / Development Geologist with an Operating Company.

Contact: Visit rerecruit.zoho.com/ats/Portalcruit.zoho.com to apply

Engagement Consultant M-Commerce, EP OBS RSSA (Ghana) Ericsson is now looking to strengthen its team in Sub-Saharan Africa with an experienced Engagement Consultant to drive and further grow its M-Commerce business.

Location: Accra Minimum Qualification: Candidate must have a University degree in Business or Engineering/ICT with strong personal track record of sales and delivery within the M-Commerce area. He/she must also have deep experience in selling Systems Integration with understanding of impact on scope, commercial and contractual matters.

Contact: Visit jobs.ericsson.com/job to apply

GHANA BUSINESS & FINANCE

APRIL 2014

Trading Results

STATS & INDICES

Daily Interbank Forex Rates as at Wednesday 19th March, 2014

Share Code

Year High (GHS)

Total Shares Traded

Last Transaction Price (GHS)

Currency

Pairs Code

Buying

Selling

U.S Dollar

USDGHS

2.5696

2.5721

Pound Sterling

GBPGHS

4.2668

4.2720

Swiss Franc

CHFGHS

2.9410

2.9421

Australian Dollar

AUDGHS

2.3318

2.3359

Canadian Dollar

CADGHS

2.3256

2.3267

AADS

0.52

0

0.52

ACI

0.06

0

0.06

AGA

37.00

0 37.00

ALW

0.06

0

0.06

AYRTN 0.18

0.18

0

0.18

Danish Kroner

DKKGHS

0.4789

0.4792

BOPP

3.30

500

3.07

Japanese Yen

JPYGHS

0.0253

0.0254

CAL

1.04

11,300

1.01

CLYD

0.04

0

0.04

New Zealand Dollar

NZDGHS

2.1995

2.2044

CMLT

0.16

0

0.16

Norwegian Kroner

NOKGHS

0.4309

0.4311

CPC

0.02

0

0.02

Swedish Kroner

SEKGHS

0.4038

0.4040

EBG

7.98

6,000

7.70

S/African Rand

ZARGHS

0.2392

0.2394

EGL

2.50

5,300

2.40

ETI

0.24

2,200 0.22

Euro

EURGHS 3.5736 3.5767

FML

7.43

100

7.43

Chinese Reminbi

CNYGHS

GCB

5.05

12,900

4.10

BCEAO

GHSXOF 183.40 183.56

GGBL

6.20

0

5.92

Dalasi

GHSGMD 14.81

GLD

26.13

0 23.00

GOIL

0.89

0

0.78

Ouguiya

GHSMRO 113.66 113.77

GSR

2.75

0

2.75

Naira

GHSNGN 63.85

GWEB

0.04

0

0.04

Leone

GHSSLL 1668.41 1670.04

HFC

1.12

800

1.13

WAUA

WAUGHS 0.2255 0.2255

MLC

0.39

0

0.37

PBC

0.17

0

0.16

PKL

0.06

0

0.06

PZC

0.79

100

0.64

SCB

20.56

SCB PREF

0.52

SIC

0.52

0.4154

14.82

63.91

19,210 20.08 0

0.52

3,300

0.55

SOGEGH 1.17 1,700 1.00 SPL

0.04

0

0.04

SWL

0.03

0

0.03

TBL

0.35

0

0.25

TLW

34.98

0 30.25

TOTAL

5.49

2,500

5.49

TRANSOL 0.03

0 0.03

UNIL

18.31

0

18.09

UTB

0.49

800

0.45

APRIL 2014

0.4150

Treasury Bill Rates as at Monday 10th March, 2014 to Friday 14th March, 2014 Period

Discount Rates Discount Rates

91 - Day

21.6534%

22.8927%

182 - Day

19.0976%

21.1136%

1 - Yr Note

-%

20.0000%

2 - Yr Fixed Rate Note

-%

20.0000%

GHANA BUSINESS & FINANCE

57

COMMODITIES

Wholesale Prices (GH¢) Average

Unit Weight Accra Bawku Kumasi Tamale Techiman Takoradi Dambai this week last week Cassava (Fresh Tubers) Bag 91kg 68.00 N/A 40.00 80.00 30.00 70.00 50.00 56.33 55.50 Cassava (Gari) Bag 68kg 110.00 115.00 170.00 116.00 82.00 135.00 116.00 120.57 120.57 Cowpea (White) Bag 109kg 290.00 195.00 170.00 200.00 160.00 280.00 196.00 213.00 211.57 Groundnut (shelled) Bag 82kg 310.00 275.00 250.00 236.00 250.00 320.00 276.00 273.86 273.86 Maize (white, grain) Bag 100kg 90.00 55.00 96.00 56.00 58.00 100.00 76.00 75.86 75.86 Millet (grain) Bag 93kg 160.00 115.00 115.00 78.00 95.00 200.00 116.00 125.57 125.57 Rice (imported-Uncle Sam) Bag 50kg 190.00 N/A 200.00 N/A 190.00 210.00 N/A 197.50 196.25 Rice (local-white) Bag 100kg 190.00 195.00 220.00 156.00 170.00 130.00 196.00 179.57 178.14 Soya Beans Bag 109kg 160.00 95.00 120.00 96.00 130.00 200.00 116.00 131.00 129.57 Tomato (cooking) Crate 52kg 130.00 75.00 95.00 100.00 90.00 280.00 108.00 125.43 125.43 Wheat (Grain) Bag 50kg 150.00 115.00 130.00 125.00 130.00 160.00 N/A 135.00 135.33 Yam (pona-medium) 100 tubers 250kg 320.00 240.00 200.00 160.00 270.00 380.00 220.00 255.71 265.71 Week ending 14th Feb. 2014.

Retail Prices (GH¢/Kg)

Average

Accra Bawku Kumasi Tamale Techiman Takoradi Dambai this week last week Cassava (Fresh Tubers) 0.90 1.20 0.71 0.90 0.50 1.00 0.30 0.79 0.77 Cassava (Gari) 1.81 1.76 3.00 1.76 1.30 3.00 1.76 2.06 2.06 Cowpea (White) 2.80 1.85 1.92 2.20 1.60 3.20 1.83 2.20 2.20 Groundnut (shelled) 3.91 3.41 3.85 2.92 3.30 4.00 3.41 3.54 3.54 Maize (white, grain)

1.00 0.60 1.15 0.60 0.70 1.20 0.80 0.86 0.86 Millet ( grain)

1.80 1.29 1.54 0.86 1.30 2.00 1.29 1.44 1.44 Rice (imported-Uncle Sam)

4.00 N/A 4.60 N/A 4.80 5.00 N/A 4.60 4.55 Rice (local-white) 2.00 2.00 2.85 1.68 1.80 2.40 2.00 2.10 2.10 Soya Beans 1.60 0.91 1.60 0.91 1.50 2.40 1.10 1.43 1.45 Tomato (cooking) 2.78 1.50 2.22 2.00 2.50 7.00 3.00 3.00 2.90 Wheat (Grain) 3.50 2.50 3.20 2.52 3.20 3.60 N/A 3.09 3.12 Yam (pona-medium) 1.40 1.60 1.20 1.20 1.34 2.50 1.40 1.52 1.61

NB: Retail Prices are provided in standard measures (Kgs or Litres) as local measures tend to change for each market. * Accra market is Agbogbloshie * Kumasi is the Central market.

Visit www.esoko.com or call 1900/0302211583 to get prices by SMS

Tomato (cooking)

The wholesale price of the 52Kg crate of fresh tomatoes increased by 20 percent in Techiman over the week. The commodity which sold the previous week for GHc 75.00 closed the week at GHc 90.00. The commodity experienced a marginal rise of 6 percent on the Kumasi market to close the week at GHc 95.00 against last week’s GHc 90.00.

On the contrary the price of the commodity dipped by 7 percent in Takoradi and sold at GHc 280.00 from last week’s GHc 300.00. In the same trend, the commodity recorded a rise on the retail market. The price per kilo went up by 25 percent and 11 percent on the Techiman and Kumasi markets respectively. The commodity went up from GHc 2.00 to GHc 2.50 in Techiman and GHc 2.00 to GHc 2.20 in the Kumasi market.

Yam (Pona Medium)

The wholesale price of yam pona plunged in Kumasi over the week from GHc 260.00 to GHc 200.00 which represents a 23 percent drop in the price of the commodity. The sudden drop has been attributed to excess supply over demand for the commodity in the market. On the retail market, the commodity experienced the same fall in Kumasi and Takoradi of which Kumasi recorded an 18 percent fall and Takoradi also saw a 17 percent fall in the retail price per kilo of the commodity from last week’s GHc 1.46 to GHc 1.20 and GHc 3.00 to GHc 2.50 respectively.The price of the commodity remained unchanged in the other markets with the exception of Accra where the commodity recorded a 9 percent rise from GHc 1.28 to GHc 1.40.

58

GHANA BUSINESS & FINANCE

Market Profile

Tamale is the administrative capital of the Northern region. It has a projected population of 600,000 according to the 2010 census. The town is located 600 km north of Accra. Due to its central location, The Tamale metro serves as a hub for all administrative and commercial activities in Northern region. It is one of the regional markets on the Esoko platform and also one of the most important markets for the commodity index. The market attracts lots of people from the three (3) Northern Regions, the Southern sector as well as people from neighboring Burkina Faso and Togo.

Visitors to Tamale are generally made up of traders and businessmen. This trend has resulted in the establishment of two (2) markets in Tamale, one being solely for retailing and the other being a wholesaling market. The retail market attracts residents in Tamale, while the wholesale market attracts traders and businessmen from other regions and neighboring countries. On the average about 50,000 traders and businessmen visit the market. Some of the commodities that are traded on the market include soya beans, sorghum, millet, tomato, cowpea, maize, yam etc.

APRIL 2014