GB&F April 2015 teaser by Ghana Business & Finance

APRIL 2015 / ISSUE 047 GH¢10.00

6th Ghana Oil & Gas Summit:

IMF Bail-out:

Spotlight on power sector

What will come out of it?

Duffuor: The unbeatable star achiever 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

CONTENTS ISSUE 047 / APRIL 2015

be concerned with the study of astronomy? Though Ghana has immediate priorities, astronomy has long-term benefits that require it to be made a priority.

24 Conference

Dr Kwabena Duffuor, Former Finance Minister 6

Briefs

Snippets of events that occurred in business and financial circles in Ghana, Africa and the rest of the world.

10 Economy

The recent IMF bail-out reaffirms the significant role that the Fund plays in Ghana’s economic life. Historical knowledge and experience could be useful for the outcomes.

14 Finance

The world financial market awaits Africans to strike hard as more and more people are trying to take advantage of the market.

16 Agriculture

The Crops and Cocoa sub-sector, which constitutes mostly farming activities that ends in production of food and cash crops, has been declining for the past five years.

20 Word for word

The 6th Ghana Oil and Gas Summit is the prestigious event that players in the oil, gas and power sectors must not miss for anything.

22 Technology & Science

Astronomy is one of the oldest sciences but it is a growing science in Ghana. Why should Ghana

The Ghana International Business Network (GIBN) was organised by Entrepreneurs Foundation of Ghana (EFG) as part of its fifth anniversary celebration. As a follow-up, on April 24, EFG will hold the Ghana Entrepreneurs Awards at the State House, Accra.

28 Cover

Dr Kwabena Duffuor is a household name in Ghana, and is equally known worldwide for his professional and entrepreneurial exploits. For his spectacular achievements, he has been honoured with several awards.

32 Energy

The 2015 budget targeted an inflation rate of 12 per cent, but the expected fall in oil revenues could put this target, and economic recovery as a whole, at risk.

34 Tourism

Cultural tourism is the point where culture, which defines in large part a people’s way of life, meets tourism. But is the government promoting Ghana’s rich culture adequately?

44 Automobile

The Nissan X-TRAIL is in Ghana as a six-model range. It is the family vehicle that has an active trace control, fitted to all models.

46 Perspectives

Some employers go to great lengths to ensure they hire the right person. But they could end up employing persons who are more expensive than their annual salaries.

48 Outlook

Poverty is not just an emerging market problem. “Social business” is a concept originally developed in the context of poor countries, but it is now applied to the rich countries.

52 Events

Know where, when and how to attend conferences of your choice.

53 Stats & Indices

Figures speak louder than words for the economy.

54 Commodities

Find the prices of agricultural produce in selected local markets, as researched and compiled by Esoko.

40 Development

World leaders are discussing a new global development strategy that will succeed the Millennium Development Goals (MDGs). Melinda Gates and Graca Machel examine the way forward.

42 Business & Management

In business, character is synonymous with a brand. A brand may be perceived as inconsistent, efficient, disloyal or

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.

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quality. That is the character of a business.

Outlook: Page 48

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General Manager Josiah Spio-Garbrah jspiogarbrah@ghanabizfinance.com adverts@ghanabizfinance.com +233 264 510 396 Editor Ayuureyisiya Kapini Atafori editor@ghanabizfinance.com Senior Staff Writer Kweku Darko Ankrah kdankrah@ghanabizfinance.com Columnist Jerry Halm Dr Nana Ama Browne Klutse Contributors Martin Luther C. King Oppong Baah Anthony Sedzro Kennedy Addai Kuffour Design & Production Manager Benjamin Tetteh Circulation & Subscription Jeffrey Dapaah subscription@ghanabizfinance.com 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 info@ghanabizfinance.com Brand Advisor Dmax Studios in Malta, EU. (www.dmax.tv) Credits

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The ways of hard-fact statistics in Ghana are mind-boggling. At times, the availability, reliability, accessibility, timeliness and accuracy of statistics take shamanistic turns where voodoo economics seems to be the order of the day. For the past three years, there have been controversial debates over certain figures released by statutory public institutions, some economists and civil society organisations (CSOs). GB&F is unconcerned with the farcical politics that some power-seekers are playing with the sad situation of statistics in Ghana. Our concern has more to do with the government, Ghana Statistical Service (GSS), Parliament, the Collective Political Opposition, the Private Sector, Academia, CSOs and other stakeholders quickly coming together to rectify the paucity and lateness of statistics in the country. We are concerned with what can be done quickly to improve the dearth of up-to-date and accurate statistics. If we cannot have up-to-date data on all sectors of the economy, can’t we be compensated with accurate late information? The work of the editorial team of GB&F, like that of many organisations, involves using statistics on all the sectors. Laying our hands on basic figures on key sectors like agriculture, mining, tourism, real estates, banking, informal sub-sector, insurance and trade has always been a hurdle we overcome with statistics which are two, three, four or even five years late. Searching for up-to-date statistics in Ghana leads to a brick wall. Seeking unimpeachable and current statistics is almost like looking for the urine of a fowl. Some organisations have now taken up the role of providing regular economic data in order to fill the yawning gap caused by the delay by governmental institutions in providing the public with statistics. Government’s slow pace in releasing data has been blamed for inaccurate information that the corporate community and investors use. GB&F cannot over-emphasise the relationship of accurate, reliable and timely statistics with good governance, whose cardinal planks are transparency and accountability. Though value-utility is most important, cost-benefit analysis of good governance does not usually factor in utilitarian satisfaction. But many African governments, sponsored by their Western allies, chase transparency and accountability at the expense of optimisation of value via the application of solid data. As it may be, in 2011, the World Bank instituted the Ghana Statistics Development Programme (GSDP), with the key implementing agency being the GSS. The GSDP will be reviewed on April 25, 2016 and it will be closed on August 31, 2016. The objective of the programme is to strengthen the national statistical system in the production and dissemination of timely and robust statistics relevant for evidence-based policy making and for other uses. Effectiveness in the implementation of the GSDP has occasioned the integration of the central government with the Local Government Service. Some members of staff of the Service have undertaken short-term workshops, seminars and academic programmes to sharpen their skills. Under the second component of the GSDP, there had been trainings and workshops on networking environment software, economics and micro-economic analysis, modelling and forecasting, International Standard Industrial Classification (ISIC), Civil Registration and Vital Statistics (CRVS) assessment and in Android Mobile Application. In addition, an economic census, referred to as the Integrated Business Establishment Survey, to establish a business register is being carried out. The register is expected to be finalised at the end of the first quarter of 2015. Under the third component of the GSDP, several preparatory activities are under way. A system for producing high frequency data on poverty by using the survey-tosurvey imputation method will be adopted. Training on the system for selected GSS staff by the World Bank is to be undertaken in the first quarter of 2015. The Ministry of Education is training staff to undertake a nationwide annual School Census. The Ministry of Health is conducting a Maternal Deaths Survey to provide in-depth knowledge of the causes of maternal deaths. The Birth and Death Registry has initiated a process to capture an initial backlog of over 200,000 entries from 2000 to 2012 to enable the Registry migrate them into the national electronic database. Under the fourth component, the project management unit is co-ordinating nine beneficiary Ministries, Department and Agencies (MDAs). The draft annual work-plan for the concerned MDAs and the GSS has been prepared. A National Statistics Bill too has been crafted. When the GSDP is successfully implemented, and the Statistics Bill and the Right to Freedom Bill become law, GB&F believes Ghana’s statistics will be on the way to become more accurate, up-to-date, reliable and accessible.

Ayuureyisiya Kapini Atafori Editor (+233 024 2385374)

APRIL 2015

Letters to the Editor send your letters to the editor at

editor@ghanabizfinance.com

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EDITOR’S SUITE

Bringing Ghana’s statistics up to date accurately

Tigo has reiterated its commitment to discharging its tax obligations as a good corporate citizen. Tigo has, therefore, denounced the false, malicious and irresponsible allegation in the media that the leading telecommunications giant has under-declared its revenue, thus preventing Subah Info Solutions to connect and monitor revenue on behalf of the country`s telecoms regulator, the National Communications Authority (NCA). Tigo, Ghana’s oldest telco, explained that in February 2013 the NCA commissioned a revenue assurance audit into its operations from January 1, 2008 to October June 30, 2011. “The conclusions of the revenue audit were that Tigo had paid the NCA a total of GH¢7,778,812.01 in regulatory fees for the three-year period under audit representing 1% of its net revenue. The Auditors also concluded that Tigo applied the regulatory fee computations correctly, namely

HFC Bank`s operations still rock-solid

HFC Bank managed to post an impressive growth and strong balance sheet despite recent boardroom wrangling. The bank assured customers that the impasse did not have any negative impact on its operations. Speaking to the media after the launch of HFC Bank’s VISA card, Charles Ofori-Acquah, Executive Director, said the claim that the bank’s deposits have been affected was not accurate because “our financial shows a different picture.” Ofori- Acquah said “Our first quarter figure will come out and it will show that really this bank is still strong…I can assure you that this bank is growing, this bank has not dipped in any area of our operations… we are signing up new customers all the time, business is good, within the Ghanaian environment I think that this bank is doing very well.” The introduction of the VISA card is part of the bank’s plan to offer a variety of products to meet the growing needs of the banking populace. HFC will, in the coming weeks, embark on a series of activities to celebrate 25 years of operations.

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netting off the proper costs directly related to interconnect fees from our gross operating revenue and applying the obligatory one percent (1%) NCA levy to the resultant amount,” noted a statement issued by Gifty Bingley, Tigo`s Head of Corporate Communications & Corporate Social Responsibilities (CSR), in Accra. The mobile telephony company explained that the maintenance / software/services fees and multimonth contracts were correct. Revenue analysis and recording of revenue by type, source, method of payment and product line were also correct. “Tigo’s only liability resulted from the auditor’s re-calculations and the treatment of adjustments passed in our financials and reconciliations. However this was of no material significance and has since been settled in full to the NCA, (GH¢ 208,495 (approx. $90,000) in regulatory fees and $50,000 on International Incoming Traffic. This represents less than 5% of total fees paid to the NCA. At no point has Tigo evaded taxes or under declared revenues. We therefore take very strong exception to such generalized allegations being made in the media,” the statement underscored.

Tigo expressed regret that an erroneous impression is being created that the telco is putting impediments in the way of Subah Info Solutions to connect and access revenue data. “This is absolutely false, Subah Info Solutions has since March 2014 had their server in Tigo’s Data Centre with access to all revenue information including sales and recharge report, interconnect and roaming data and other financial reconciliations. We operate in full transparency and compliance with the industry regulator and the Government of Ghana ... We have over the years honoured all our tax and regulatory fee obligations.In 2014 alone, Tigo paid 107, 425,039 in taxes. This included the Communication Service Tax (CST), VAT, Withholding Tax, Import Duties and the one percent regulatory fees to the NCA. We were disappointed that the authors of these allegations did not check with Tigo before going public.” Dismissing the uncalled-for allegations, Tigo, a subsidiary of Millicom which is listed on the Swedish Stock Exchange, protested: “We take such allegations on under-declaration of revenue very seriously as it has adverse implications for our integrity, market value and corporate reputation.”

Government issues GH¢440 million bond Government has accepted GH¢201.8 million ($53.24 million) worth of bids and paid a yield of 21 per cent in an oversubscribed five-year bond sale, the Bank of Ghana (BoG) said. The GH¢440 million bond, open to offshore investors, was the second in a series of medium-term auctions planned for the first half of this year to roll over maturing debts and boost government finances. BoG said a total of GH¢610.37 million worth of bids were tendered. The government plans to issue up to US$1.5 billion of Eurobonds this year.

Ecobank launches SME club

Ecobank has unveiled its SME Club to help grow small business and address some of the challenges that militate against Small and Medium-scale Enterprise (SME) development in Ghana. The club will serve as a loyalty package that rewards SME clients for doing business with the Pan-African bank. The idea of the SME Club is to help build the capacity, develop and expand markets, introduce technology, negotiate price discount from SME service providers and expose club members’ businesses and products to the world, especially across Africa.

Speaking at the launch of the SME Club, Samuel Ashitey-Adjei, Managing Director of Ecobank, said the launch was another step by the bank to help develop the crucial sector. Ashitey-Adjei suggested currency hedging to reduce the impact of the declining Cedi on big businesses after the launch of its SME Club. “Options such as currency hedging, along with similar risk management strategies can, help lessen the burden most businesses are currently carrying. The effectiveness of hedging will depend on big businesses’ ability to get hedging counterparts,” he told the media. The Cedi from January to late March depreciated against the dollar by a little over 12 per cent. The cedidollar exchange rate currently stands at GH¢3, 77 pesewas.

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GHANA BRIEFS

Tigo has not under-declared revenue

ECONOMY

What good will come out of the IMF bail-out? History may be a guide for the present BY KENNEDY ADDAI KUFFOUR

A long-standing relationship has existed between Ghana and International Monetary Fund (IMF) dating back to 1966. From that time, successive governments have signed separate loan arrangements with the IMF. Indeed, the relationship has suffered bitter divorces and ambivalent reconciliations over the years. For instance, when in 2006 the country was exploring other financing options, it pulled out from the IMF loans arrangement. But it came back in 2009 to borrow a whopping US$602 million from the international financial institution. Thus, reaffirming the important role that the Fund plays in the economic life of Ghana.

here are two schools of thought with regard to the role of the IMF in the country’s economy, and the impact of its prescribed policies on its socio-economic development. The first school considers the policies of the IMF as a necessary evil rather than a preferred strategy. The second school criticises IMF-supported programmes as ineffective and unjustifiably restrictive of government spending and unreasonably interruptive of much-needed expansions to critical sectors such as education and health. From a pluralistic stand point, the IMF policy prescriptions have received mixed reactions. On the positive side, Ghana’s relationship with the IMF has resulted in stabilisation and economic growth which, however, occurred on the altar of employment losses as evinced in the implementation of Structural Adjustment Programmes (SAPs). On the negative part, the pursuance of the IMF policy prescriptions led to socio-economic hardships and political instability, which among other factors, triggered the overthrow of the government in 1972. One of the scars created by the 2008 global financial crisis is the unquenchable thirst for economic

stimulus packages by countries. This has cajoled many developing countries to resort to the IMF for bail-outs from their economic difficulties. These developing countries lack the privilege of a strong regional economic co-operation and monetary unions such as the European Union (EU) to rely on for liquidity. It is against this backdrop that Ghana’s turn to the IMF for salvation in spite of the palpable impact of the Fund’s conditionalities on the economy. To better assess the implications of the recent IMF bail-out and the conditions accompanying it, a study of the historical data to ascertain what went right or wrong with the economy with or without the IMF’s loans.

Economic prosperity

At the dawn of independence in 1957, Ghana swam in economic prosperity with a relatively high growth rate, substantial foreign exchange reserve and a strong civil service to guide economic growth. To promote socio-economic development, the government instituted a policy of free education, healthcare and initiated mass industrialisation. However, external shocks arising from deterioration the price of cocoa, the country’s main export, the economic situation declined. In 1965, Ghana

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was faced with the challenge of dealing with an economic downturn. Needing an external bail-out, the Nkrumah administration approached the IMF. The Fund proposed a reduction in government spending to levels that could be covered by public revenues in order to fight inflation. The Convention People’s Party (CPP) government rejected these conditions. Adopting these policies would have trammelled the expansionist development programmes which included diversification of the Ghanaian economy through import substitution industrialisation. Moreover, if the government had accepted the IMF loan and conditionalities, it would have affected the momentum of its economic development strategy. The IMF policies would have forced Nkrumah to cut back on capital spending. Since the government was overthrown in 1966

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SCIENCE & TECHNOLOGY

The study and use of astronomy in Ghana BY NANA AMA BROWNE KLUTSE (Ph.D)

How old is the Universe? What is the fate of the Universe? How unique is the Universe? Could another Universe ever have supported life? To be able to answer these questions, one has to study astronomy. Astronomy is a natural science which involves the study of celestial objects such as stars, galaxies, planets, suns, moons, asteroids, comets and nebulae. The physics, chemistry and evolution of such objects, and phenomena that originate outside the atmosphere of Earth, including supernovae explosions, gamma ray bursts and cosmic microwave background radiation, are also studied in the field of astronomy. A related but distinct subject, physical cosmology, is concerned with studying the Universe as a whole.

stronomy is one of the oldest sciences but it is now a growing science in Ghana. In the early civilisations in recorded history such as those of the Babylonians, Greeks, Indians, Egyptians, Nubians, Iranians, Chinese and Maya, methodical observations of the night sky were performed. With the invention of the telescope, however, astronomy was developed into a modern science. Historically, astronomy included disciplines as diverse as astrometry, celestial navigation, observational astronomy and the making of calendars. Why should Ghana be concerned with the study of astronomy? Although Ghana is faced with the immediate challenges of hunger, poverty, energy and impacts of climate change, astronomy has long-term benefits that are equally as important to our society as these challenges. Several

studies have found that investing in science education, research and technology provides great returns - not only economically, but culturally and indirectly for the population in general - and has helped many countries to face and overcome crises. A practical example is how the developed countries have embraced science and technology to achieve socio-economic, political and military advancement. The scientific and technological development of a country is closely linked to its human development index. This index is a measure of life expectancy, education, income and other indicators.

A great deal

Astronomy has contributed a great deal to the advances in imaging and communications. For example, a film called Kodak Technical Pan is used extensively by medical and industrial spectroscopists, industrial

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photographers and artists, and was originally created so that solar astronomers could record the changes in the surface structure of the sun. The film has been improved and used not only in telescopes, but also in personal cameras, webcams and mobile phones. Radio astronomy has provided a wealth of useful tools, devices and dataprocessing methods in communication. Many successful communications companies were originally founded by radio astronomers. The computer language FORTH was originally created to be used by the Kitt Peak 36foot telescope, and it went on to provide the basis for the emergence of a highly profitable company (Forth Inc.). It is now being used by FedEx worldwide for its tracking services. There are a host of examples of the importance of astronomy in society. The Ghana Space Science and Technology Institute (GSSTI) was launched officially on May 2, 2012

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TOURISM

Ghana’s under-promoted culture not being well sold (I) BY KWEKU DARKO ANKRAH

“Art in all its forms is expressive of the social conditions and social values of a people. The artist and therefore his creation as well were products of his time, In a series of artistic creations is mirrored the history of a people. The Akan people had no written record of their history and yet history is preserved in songs, dances, folk tales, dramas, music, and sculpture. Whenever there has been a significant change in the social attitude of a people, it has been reflected, directly or indirectly, in the mirror of art.” (Osagyefo Dr Kwame Nkrumah at the launch of Osagyefo Players, 1965)

GHANA BUSINESS & FINANCE

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COVER

GHANA BUSINESS & FINANCE

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COVER

Duffuor:

The unbeatable star achiever BY AYUUREYISIYA KAPINI ATAFORI

His numerous achievements in governance, banking, business, finance, academia and philanthropy have not only been publicly recognised in Ghana. His stellar success story has also been hailed globally with awards and encomiums. He is a banker par excellence, a business tycoon of no mean measure and a generous giver with a big heart towards humanitarian causes. With a chain of academic degrees following his name and a train of companies in diverse sectors of Ghana’s economy being under his thumb, Dr Kwabena Duffuor is a great personality who no Ghanaian can arguably beat. The advice, expertise, experience and wisdom of this unbeatable star achiever are being sought for locally and internationally.

or his immeasurable and inimitable achievements, Dr Duffuor has been rewarded locally and globally with several awards and accolades. Last year, he won two awards. He was celebrated with the ‘Man of the Year 2014’ award by VIASAT 1, a Ghanabased television network. He was also awarded the Lifetime Achievement Award in Banking and Finance at the 13th Banking Awards ceremony organised by Corporate Initiative. “The fact that both Dr. Kwabena Duffuor … work in banking and finance is tribute to their tremendous success in a year which was riled with many economic challenges,” Laetitia Royaards, the Chief Executive Officer of VIASAT 1 Ghana, said. In February 2002, the Rural Bankers’ Association of Ghana honoured Dr Duffuor for his immense contribution to the development of rural banking in the country. He was

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also honoured by Ghana Commercial Bank (GCB) in May 2002 in recognition of his 26 years of loyal and dedicated service to the GCB. This recognition was followed by the Ashanti Regional Chapter of the Rural Banker’s Association appreciating and honouring him in September 2002 as the Founder and first President of the Association. He contributed significantly to the development of rural banks in the Ashanti Region. In 1998, Dr Duffuor was voted the ‘Personality of the Year’ by Independent, a local newspaper. That same year, he was voted ‘Marketing Man of the Year’ by the Chartered Institute of Marketing, Ghana. In November 1997, for his loyal and meritorious service to the banking industry in the Ghana the Institute of Bankers - Ghana conferred an Honorary Fellowship on him at the Institute’s annual dinner held in Accra. At the international level, the Banker, a publication by Financial

Times Limited, adjudged Dr Duffuor as Africa’s Finance Minister of the year 2011. As the Governor of Ghana’s central bank, he was named as one of the four best central bank governors in the world at an International Monetary Fund (IMF)/World Bank meeting in 1999 (Euromoney Publication) in Washington in September 1999. In July 2010, Dr Duffuor was awarded the International Distinguished Merit Award by the West African Insurance Institute in recognition for his outstanding contribution to the development of insurance in Africa and specifically for his unreserved support for the promotion of insurance education in the sub-region, particularly the West African Insurance Institute. Now, Dr Duffuor is the Founder and President of HODA Holdings Limited, a corporate conglomerate with over 15 businesses in insurance, banking, real estates, agriculture and the media.

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DEVELOPMENT

How to make the Sustainable Development Goals Work … It is simple: Prioritize women and families BY MELINDA GATES & GRACA MACHEL

The two of us met for the first time more than a decade ago, in 2003, in the small rural village of Momemo, an hour’s drive and a world away from the urban bustle of Maputo, Mozambique’s capital and largest city. We were there to gain a deeper understanding of the impact of malaria on the lives of villagers in areas particularly hard hit by the disease. But as we sat outdoors talking with a small group of villagers, the conversation covered a range of issues about the health and well-being of women and children in the village. How early did women marry here? How many children did they have? How many children had they lost to illness? Could they work and care for children severely sick with malaria? Although the two of us came to that conversation with very different life experiences, we were drawn together by a common mission: enabling a healthier and more productive life for women and children in the poorest countries. Now we’re coming together again — this time to carry the voices of women like those we met in Momemo to a different conversation, one that will affect women everywhere for a generation to come. As you read this, world leaders are engaged in discussions about a new global development plan that will succeed the Millennium Development Goals (MDGs) when they expire at

the end of 2015. Of all the important actions the United Nations has taken over the years, the MDGs have been among the most important and successful. The MDGs have provided a framework that has laid out in clear and succinct terms the kind of world we want, with priorities, hard targets, and deadlines to improve the lives of the world’s poorest people. Guided by this framework, a broad coalition of developing countries, donor governments, development partner institutions, the private sector, and civil society have made good progress on tackling big challenges: extreme poverty, child and maternal mortality, infectious diseases, and gender equity in education. But significant challenges remain. In 2013, 17,000 children under age 5 died every day, many from preventable causes. Nearly 300,000 women died during pregnancy and childbirth. And 162 million young children suffer from chronic undernutrition.

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The MDGs showed that enormous progress is possible. With the next global development framework — the Sustainable Development Goals (SDGs), which will guide human development investments through 2030 — we have a once-in-a-generation opportunity to go the last few miles and accelerate progress where it has fallen short. As a recent report by U.N. Secretary-General Ban Ki-moon noted, “Millions of people, especially women and children, have been left behind in the wake of unfinished work of the Millennium Development Goals.” For the SDGs to succeed and ensure that no one is left behind, we believe world leaders must keep the focus on ambitious but achievable targets centered on the health and well-being of women and children. At a minimum, we believe we must finish the work of the MDGs by setting and meeting concrete targets for child, newborn, and maternal health by 2030.

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OUTLOOK

Reaching the rich world’s poorest consumers BY MUHAMMAD YUNUS, FREDERIC DALSACE, DAVID MENASCE & BENEDICTE FAIVRE-TAVIGNOT

Poverty is not just an emerging-market problem. In the United States (US) more than 45 million people, or 15 per cent of the population, are officially poor, according to the Census Bureau. What’s more, this percentage has increased every year but one (2006) since the 21st century began. At 16 per cent, Japan is doing no better. And in the European Union (EU), almost 120 million people—one in every four—are classified as at risk of poverty or social exclusion. In the past, businesses in the developed world have largely ignored the needs of these groups. To be sure, they know that not all their customers are rich, and many companies have invested significantly in creating lowcost products and services specifically tailored to people on a tight budget. Most automakers have offered lowbudget cars for decades: The Model T Ford, the VW Beetle, the Mini Cooper, and the Citroën 2CV were in their time designed for what their manufacturers saw as the budget market. Low-cost “hard discounters” such as Aldi and

Lidl in Europe and Market Basket in the US have emerged relatively recently in the retail industry. But the low-cost, lowprice products and services that have traditionally served poorer consumers in Europe are usually still out of reach for the 25 per cent who are at risk of poverty. Consumers in this group often can’t buy essential products and services without significant aid from the state— whose ability to provide such aid is diminishing even as the need for it grows. Limited public transportation, for example, means that many poor

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people in rural districts must rely on aging, extremely cheap vehicles. Someone whose car often breaks down may be out of work as a result. In recent years, a number of large corporations have started approaching problems of this kind in a new way. In 2009, Martin Hirsch, the former French high commissioner in charge of poverty alleviation, and Emmanuel Faber, then the food giant Danone’s deputy general manager (now its CEO), came together to form the Action Tank—a not-for-profit association directed by Jacques Berger,

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