GB&F APRIL 2016 by Ghana Business & Finance

APRIL 2016 / ISSUE 059 GH¢10.00

Too many taxes in Ghana?

LIVE IT. LOVE IT. The New Tigo THE FIRST BUSINESS READ IN GHANA

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

CONTENTS ISSUE 059 / APRIL 2016 at the January 12 press briefing was on microfinance. The answers President John Mahama gave were unimpressive to me as a finance specialist,” argues columnist Yaw Ohemeng Kyei.

itself to creating an environment conducive to the promotion of economic growth.

20 Marketing

Front Cover: Roshi Motman CEO, Tigo Ghana

6 Briefs

Snippets of business and financial news which took place in Ghana, Africa and the rest of the world in March. Low commodities prices, a fall in food production and a drop in foreign direct investments are retarding the growth of the Ghanaian economy.

A good friend that can guide you through your professional life is worth much more than you can ever imagine… When it comes to business matters, I am not too comfortable calling these wonderful individuals, ‘friends.’ I prefer to call them SPECIALADVISORS,” writes J.M. Halm in his column.

16 Finance

A well structured tax system offers itself as one of the most effective means of mobilising the country’s internal resources, and lends

Ghana’s real estate industry’s performance reflected the trajectory. It was not then uhuru for Ghana’s housing industry but business was good. But both ends of the market saw growth. “I was given the opportunity as a guest speaker to share my experience as a young woman in a field traditionally marked for men – science and mathematics,” columnist Dr Nana Ama Browne Klutse writes.

32 Cover

Tigo recently re-launched its brand with a new tagline ‘Live it. Love it.’ and an exciting new product called Tigo Tribe which aims at pushing its digital lifestyle agenda.

36 Agriculture

14 Corporate Progress

The production of cocoa, Ghana’s main cash crop and foreign exchange earner, may drop drastically due to certain factors which, when well fixed, will reverse the declining trend.

40 Ghana at 59 Special

In this exclusive interview with veteran trade unionist, politician and diplomat Charles Heymann, he states that some progress has been made by Ghana after independence. He, however, regrets that the country is a long way from achieving economic independence.

46 SMEs & Microfinance

“It was therefore no surprise to me when one of the first questions that hit the President

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 2016

Contemporary innovation and technology have generated unparalleled competition in higher education worldwide. So the US has realised the worthiness to market its quality tertiary institutions in Africa.

50 Business & Management

26 Science & Technology

12 Banking

Numerous factors, including the Cedi depreciation, energy challenges and foreign exchange rate volatility, among others, contributed largely to the reduced profitability of most banks in Ghana in 2015.an

48 Education

24 Building & Construction

10 Economy

Ghana as a brand ought to be managed by examining the country’s brand equity and positioning the elements of this equity to the country’s advantage.

“Churches invariably collect taxes from their congregation through tithes and offerings as a means to keep the church running. In that same vein, they should be willing, as a people of God, to pay taxes to the government which builds the entire infrastructure,” columnist Yaw Asamoah contends.

52 Perspective

One way customer experience can help companies boost revenue and cut costs is through word of mouth. With the advent of the digital revolution, word of mouse is far better than word of mouth.

54 Diplomacy

‘Humanistanbul’ is how Turkish Foreign Minister Mevlut Cavusoglu coined the theme and venue of the United Nations World Humanitarian Summit which will occur on May 23-24 in this article.

56 Events

Visit conferences organised around the world that may interest you and your business.

57 Stats & Indices

Figures speak louder than words for Ghana’s economy.

58 Commodities

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

linkedin.com/GhanaBusiness&Finance facebook.com/GBandF @ghana_business

GHANA BUSINESS & FINANCE

Editor Ayuureyisiya Kapini Atafori editor@ghanabizfinance.com Senior Staff Writer Kweku Darko Ankrah kdankrah@ghanabizfinance.com Columnists Jerry Halm Yaw Asamoah Dr Nana Ama Browne Klutse Yaw Ohemeng Kyei Contributors Martin Luther C. King Oppong Baah Anthony Sedzro Kennedy Addai Kuffour Adnan Adams Mohammed Design & Production Manager Benjamin Tetteh btetteh@ghanabizfinance.com Circulation & Subscription Ernest Awo 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 enquiries@ghanabizfinance.com Brand Advisor Dmax Studios in Malta, EU. (www.dmax.tv) Credits GNA Daily Graphic radioxyzonline.com Mergermarket Group ghanabusinessnews.com

myjoyonline Bloomberg citifmonline Corporate Council on Africa

Ghana Business & Finance magazine is published by

GB&F welcomes the new Governor of the Bank of Ghana (BoG) to his portfolio as the lead guardian of the lender of last resort in Ghana. We also congratulate Dr Abdul-Nashiru Issahaku on his appointment to such a high office by President John Dramani Mahama on April 4. GB&F, however, reminds him that he has no honeymoon to consummate his new position. Dr Issahaku has been appointed at a difficult period – an election year in which the economy is wobbling, as IMF-enforced austerity bites the average Ghanaian; temptations to over-run 2016 budget’s fiscal strictures are strong; and commodities prices are rather low. Added to these economic challenges is the deteriorating, though recently stable, Cedi exchange rate against globally-recognised convertible currencies like the US Dollar, Pound Sterling and Euro. On the average, the general judgement is that Dr Henry Kofi Wampah, Dr Issahaku’s predecessor, performed a little beyond the lacklustre with his habitual increment or maintaining of the Policy Rate, the key determinant of the base rates of universal and commercial banks operating in Ghana. In February 2014, Dr Wampah goofed when he instituted and effectuated measures to stem the foreign exchange constraints that confronted him. His restrictive forex directives backfired, and he had to beat a retreat willy-nilly. Primarily, as a matter of principle, GB&F takes issue with the appointment of Dr Issahaku, the first person from the North of Ghana to become a BoG Governor, on grounds of his known association or affiliation with the governing National Democratic Congress (NDC). Dr Issahaku had contested NDC parliamentary primaries two times, and lost. GB&F had expected that given Ghana’s overly partisan and polarised environment, an independentminded technocrat with no open party political alliance would have been appointed to lead the central bank. The appointment of Dr Issahaku provides ammunition for opposition parties to mix partisan politics with monetary policy formulation and implementation. It is regrettable that some opposing party executives and members have already started to drag the new Governor into partisan politics, pointing at his NDC antecedents. Be as it may, the new Governor has his work well cut out for him. Many local and foreign economists, bankers and financial experts have expressed their expectations of the new Governor. Some expectants and their expectations include: Samuel Bright-Kaitoo, CEO of Galaxy Capital: ‘‘We are expecting him to put in policies that will bring down interest rates because money markets instrument thrives on the BoG base rate and the Treasury bill rate.” Ken Thompson, CEO of Dalex Finance and Leasing Company Limited: “I hope that he is able to explain things to us in a candid manner and is able to restrain the government from overspending … What we need is someone who is confident, who has vision, who can inspire confidence in the economy.” Samuel Ampah, a local currency analyst: “What the central bank is doing at the moment … is stabilising the currency in terms of ensuring that the inflows are coming in … Also, the repatriation of the export revenues is yielding some positive results and I guess he will ensure that such policies are strengthened more. There is a target and we should reduce the level of depreciation of the local currency.” All GB&F requires from Governor Dr Issahaku is the affective application of econofiscal and monetary policies to reduce Ghana’s notoriously high interest rates, now swinging between 30 per cent and 35 per cent. The untouchably exorbitant lending rates in the country are a broken mirror image-like reflection of the malaise currently eating up the economy. What can Mr Governor do about this? Some not-done-before actions and unpopular policy directives would help the situation. He must do something to hack down the current Policy Rate of 26 per cent. What he can do to stabilise the Cedi in the long term is the gleam which will brighten his name in the firmament of banking and economics gurus in Ghana. He is also obliged to clean up the present messy ponzi schemes in the microfinance sub-sector. Can Dr Issahaku live up to these expectations? With his academic pedigree and professional experience, GB&F does not doubt that he is capable of standing up to the task. But all in all, we are wont to repose our hopes in the sayings: “Time will tell” and “The proof of the pudding is in eating.”

Ayuureyisiya Kapini Atafori Editor (+233 024 2385374)

APRIL 2016

Mail to the Editor

Send your articles, comments and letters to the editor at editor@ghanabizfinance.com

GHANA BUSINESS & FINANCE

EDITOR’S SUITE

General Manager Josiah Spio-Garbrah jspiogarbrah@ghanabizfinance.com +233 264 510 396

Welcome, new BoG Governor! No honeymoon for you

Ratings agency, Fitch, has stated that Ghana’s economy was exposed to serious shocks because of rising external deficits and fears of spending outside the approved budgets this year. Fitch said this after it maintained the country’s credit ratings at B, but with a negative outlook. Fitch warned that any further drop in commodity prices could seriously affect the country’s economy in the coming months. Fitch, however, stated that growth could only pick up this year if the commodity prices and crude oil production from TEN and Jubilee oil fields improve in the coming months. “Fitch Ratings has affirmed Ghana’s Long-term foreign and local currency Issuer Default Ratings (IDR) at ‘B’ with a Negative Outlook. Fitch also affirmed the issue ratings on Ghana’s senior unsecured foreign and local currency bonds at ‘B’, as well as the ‘BB-’ rating on Ghana’s US$1billion partially guaranteed,” it noted.

Crop Research invents cassava harvester Scientists at the Crop Research Institute of the Council for Scientific and Industrial Research have developed a simple energy saving-tool for harvesting cassava. The simple metallic tool unlike the traditional method of uprooting tubers of cassava requires simple energy. Farmers with large cassava farms for instance have often reported health challenges especially waist and body weakness associated with old harvesting tools such as hoes and cutlasses. But development of the harvester which operates according to the grip and its principle will help address these challenges and relief farmers from drudgery. The original design was first adopted from the International Institute of Tropical Agriculture (IITA) in Nigeria.

Traders push for cancellation of 17.5% VAT The Joint Private Sector Business Consultative Forum to seek a reversal of the 17.5 % VAT Flat Rate Scheme imposed on traders. According to the Forum, the government has instructed all registered traders to pay 17.5 per cent Value Added Tax (VAT) instead of the normal three per cent. A development, the Forum believed was unjustified, hence its call for a withdrawal of the policy. George Ofori, President of Ghana Union of Traders Associaion (GUTA), which represents the Forum, maintained that the government would be doing harm to traders should it continue with the policy. ‘‘We were not actually informed, all of a sudden, we got to know that it has been taken back to the standard rate of seventeen and half percent VAT rate. This seventeen and half percent can be a component of input and output but with the flat rate scheme, it is a simplified system that does not have the input and output system. So you pay that one and that ends it because you are not getting any input,” Ofori stated.

Ghana reviews EU timber trade framework The government and the European Union (EU) have reviewed progress towards the implementation of the Voluntary Partnership Agreement (VPA). The VPA is aimed at ensuring legal means of selling timber products exported to the EU and at the domestic market. Nii Osa Mills, Minister for Lands and Natural Resources, said the Ghana-EU VPA Joint Monitoring and Review Mechanism (JMRM) which includes representatives of stakeholders would oversee the implementation of the agreement. Mills said the JMRM reviewed the status of the development of Ghana’s timber legality assurance system and discussed outstanding issues to be addressed from the joint action plan before licensing could begin. Mills said the licensing would enable Ghana’s timber products to enter the EU market without importers having to do further due diligence to meet their obligation under the EU Timber Regulation.

APRIL 2016

Zepto introduces tablets

GHANA BRIEFS

Fitch maintains B - for Ghana

Charles Ofori, CEO of Zepto Ltd.

Zepto Limited, a wholly Ghanaianowned company, has introduced new and affordable Zepto UmiTab 10.1 two-in-one tablet, targeting students in tertiary institutions. The UmiTab 10.1 comes with an ergonomic keyboard, on-board 3G data access and full Microsoft productivity offering including Windows 10, Office 365 Mobile and free 1 TB OneDrive access for one year. The sleek and flat device comes with a long battery life and in different color schemes that make it an attractive option for those looking for an affordable device that provides the full function of a laptop, with the convenience of a tablet. Charles Ofori, CEO of Zepto Limited, said “we are excited about what we are offering Ghanaians because not only does the UmiTab 10.1 offer quality at a low price, but it provides Microsoft’s familiar, fast and secure software, while our teams across the country will ensure that customers get the technical support and customer service they deserve long after they have purchased the device.”

Capital Bank, Ria in strategic partnership Capital Bank Ghana has entered into a strategic partnership with the world’s number three money transfer operator, Ria, to boost remittances to Ghana. The partnership would facilitate the integration of Capital Bank’s Internetbased systems to ensure that money transferred through Ria is received instantly across all the bank’s branches and partner outlets. According to Rev. Fitzgerald Odonkor, Managing Director of Capital Bank, the move would expose the bank brand to Ria’s global network of partnerships and also helps in the bank’s drive to become a stronger African brand with footprints across Africa and in other strategic markets.

GHANA BUSINESS & FINANCE

ECONOMY

Low oil prices, food output dip & FDIs drop retard growth BY MASAHUDU ANKIILU KUNATEH

Though crude oil prices on the international market have started picking up in March and posted their largest monthly gain of US$38 in almost a year, nationals in some countries are still enjoying cheaper petroleum products. But the same cannot be said of Ghanaians because taxes constitute about 70 per cent of the cost of fuel in Ghana.

t the beginning of this year, prices of petroleum products in West Africa’s second largest economy have been increased by almost 30 per

cent. The increase is occasioned by the passage of the Energy Sector Levy (ESL) by Parliament in December 2015. Consequently, commercial transport owners have increased transport fares which catapulted the cost of living, affecting majority of Ghanaians who depend on commercial transports for transportation. It is not only the cost of filling the vehicle tank that is crippling, but also the knockon effects of spiraling food prices up, thereby creating havoc in household budgets. In Ghana, both statistical and anecdotal evidences point to the fact higher oil prices have serious negative impact on economic performance. Whenever there is a rise in petroleum prices, all transport-related businesses face the decision of whether to raise their charges to shift the increased costs onto consumers or not. A benchmark oil price of US$53.05 per barrel had been factored in the 2016 budget. Now that the crude oil price has hit US$38.34 as at the end of March, which is below the benchmark price for more than three months and predictions suggest a prolonged slump in prices, there is no doubt that the Ghanaian economy has dangerously been exposed. It is clear that the estimated oil revenue in 2016 cannot be realised. It was recently in the news that Minister of Finance Seth Terkper and his team are lacing their boots to go to Parliament to revise the 2016 budget. Cocoa and gold prices Cocoa prices rose in the second quarter of 2015 as a result of weatherrelated supply shortfalls in Ghana, but 10

demand remains strong. According to the Business Monitor International report of October 2015, cocoa prices are expected to peak in 2015 before lowering at the beginning of 2016 to the end of the forecast period in 2019. The market is projected to register a small surplus in the 2015/16 season on account of a rebound of production in Ghana due to greater use of inputs and expectations for better weather and weak growth in global demand in 2016. In spite of this, earnings from cocoa beans and products exports amounted to US$1,921.7 million at end-September 2015, almost equal to US$1,921.7 realised in the same period in 2014. According to the ICBC Standard Bank estimates, gold prices are generally expected to trend downwards, peaking around US$1,160 per ounce in 2016 as the Federal Open Market Committee normalises US monetary policy. Gold exports amounted to US$2,445.2

GHANA BUSINESS & FINANCE

million during the review period compared to US$3,369.3 million in the corresponding period of 2014. The average realized price decreased by 8.2 per cent to US$1,181.6 per fine ounce while the volume exported decreased by 21.0 per cent to 2.1 million ounces. Gold industry watchers say the decline is likely to continue due to China’s recession, and if that happens, Ghana would not achieve its revenue target for gold. The low agriculture production may continue, following the decision of the government to slash the budgetary allocation of the country’s agriculture sector. In its 2016 budget, the government, whose political inclination is social democracy, allocated GH¢355.14million to the Ministry of Food and Agriculture. When this amount compared to the 2015 allocation of GH¢395.19million, it shows a shortfall of GH¢40million. In percentage terms, it is 10.1 per cent decrease. It is therefore not surprising APRIL 2016

CORPORATE PROGRESS

The friends We Need:

Making Good Use of Special Advisors BY J. M. HALM

So much has been written about humankind’s need for friendship, especially in times of need. The antiquated adage “A friend in need is a friend in deed” says it all. Friends are important, and good friends are vitally important. I believe not many people will argue against this assertion. Friends are those great individuals who stick by you through thick and thin.

riends rejoice with you when you succeed and cry with you when things are not going well. Friends are those you can count on not to disappoint you. A wise man once said, “A friend is one who believes in you when you have ceased to believe in yourself.” That is the worth of true friends. Good friends always make you feel exceptional and loved. They radiate a certain kind of warmth whenever you are in their presence. They give you love without expecting anything back, other than your affection and undying friendship. Great friends are those we can share our darkest secrets with, without fear of the skeletons being brought out of the closet. We feel secured with such friends because they are there to cover us. A good friend stays true to the end. I must apologise if I am coming across as overtly emotional today. I can assure readers that my

mood has nothing to do with last week’s St. Valentine’s Day celebration. I am just attempting to lay a solid foundation for this particular write-up. It is a truism that we all need friends to thrive in this life. You can never be too ‘macho’ to need friends. “No man is an island, entire of itself,” so writes the great 17th century Christian poet, preacher and philosopher, John Donne (1572-1631). He was absolutely right. We need each other to survive. Strength of our relationships For some of us, the strength of our relationships is a major factor to how far we have come in life. The advice of some ‘senior’ friends has helped shaped us to the level we find ourselves in at this moment in time. A good friend that can guide you through your professional life is worth much more than you can ever imagine, especially if the one has already gone ahead of you in life.

GHANA BUSINESS & FINANCE

I did not fully grasp the importance of having ‘friends’ until I got to into private practice. It was then that I realised how precious ‘friends’ were. When it comes to business matters, I am not too comfortable calling these wonderful individuals, ‘friends’. I prefer to call them SPECIAL ADVISORS. Mark Shonka and Dan Kosch, in their amazing book “Beyond Selling Value: A Proven Process to Avoid the Vendor Trap” refer to these individuals as ‘coaches’. Others might prefer to call them‘inside sources’, or as on the streets of Accra, ‘links’. Why do I call them Special Advisors? The term is straight from politics. A Special Advisor (often abbreviated to “SpAds” or “Spads”) works in a supporting role to an elected government as in the British Government. The main task of Special Advisors is to assist government ministers and officials succeed in their duties. The Cabinet Office of the UK

APRIL 2016

MARKETING

Managing Brand Ghana for competitive advantage in globalised world BY EBENEZER T. HANSON

With leaders of developing countries intensely engaging in economic diplomacy and touting their respective countries as the best destinations for doing business and tourism, a measure that could be effectively employed and deployed to Ghana’s competitive advantage to woo investors and tourists is branding.

randing is the means by which a product or service is differentiated and identified from its competitors. A brand is “a name, term, sign, symbol or design, or a combination of them intended to identify the goods and services of one seller or group of sellers

and to differentiate them from those of competitors.” These differences may be functional, rational, or tangible, related to performance of the brand; and/ or symbolic, emotional, or intangible, related to what the brand represents or means in a more abstract sense. In simple terms, a brand is a product or

GHANA BUSINESS & FINANCE

service that has created awareness, reputation or prominence and has a future in the market place. With these ingredients as arsenals, one should be able to identify what Ghanaians possess — natural, cultural, social, economic and political—and use them to position

APRIL 2016

MORTGAGE MARKET IN GHANA Portfolio Market (in million Share (%) dollars) Ghana Home Loans (GHL) 84 47 HFC Bank 47 27 Fidelity Bank 24 14 Cal Bank 6 3 Ghana Commercial Bank 4 2 Barclays Bank 12 7 TOTAL 177 100 Source: GHL, 2013

APRIL 2016

it would mean that you’d need to be making monthly repayment of about GHc3,000 in order to meet that. Now, with that, your debt to income ratio should be about 40 per cent. So that this GHc3,000 should not be more than 40 per cent of your income. Therefore, it means that to qualify for this loan, the individual should be earning more than GHc3,000 per month. Now, ask yourself, who earns that kind of money in Ghana if not the Chief Executives? Will the Chief Executive come and buy a two-bedroom for $80,000? That is what the industry is confronted with… It is so bad these days that all we do now is targeted marketing, or personal selling, because the days of presentation and organising sales for workers and the public are long gone. These days we make investment pitches.” Worrisome increasing housing deficit This situation, unfortunately dovetails into, and further compounds, the nation’s long lingering and worrisome increasing housing deficit largely responsible for the springing up of slums, especially all over Accra, Ghana’s capital city. Demand for housing is fast outstripping its supply at a rate of 17.5 per cent annually. The inability of housing delivery to meet effective demand over the years is creating a great strain on the existing housing stock and infrastructure, especially in urban areas. Slum creation is a result of the upsurge in rural-urban migration. Unfortunately, inadequate access to capital, limited supply of land and an insufficient regulatory framework which does not address the needs of the urban poor are not helping matters. According to a report by UN Habitat, it is estimated that in 2001 the slum population of Ghana was 4,993,000 people; and it was growing at a rate of 1.83 per cent per annum. From the report’s projection, this number would have grown more than eight million by now. As a matter of fact, a survey estimates that 80 per cent of Ghana’s urban dwellers live in slums. This is contestable but it may understate the real situation. When Dr Kwaku AgyemanMensah, the Minister for Water

Resources, Works and Housing, was addressing a 16-member delegation from Finland who had called on him at his office in Accra recently, he acknowledged that Ghana continued to face serious problems in the housing sector due to rapid urbanisation and increasing population growth. Dr Agyemang-Mensah said there was a current housing deficit of more than 1.7 million units, and the country was estimated to require a minimum annual delivery of about 170,000 units for the next 10 years. He admitted that the interventions the government has put in place so far could not make any impact in the short term. Launching of Housing Policy Efforts such as the launching of the Housing Policy in Accra last year would have given the country a reasonable sense of hope and relief. But recalling that previous administrations had also come up with their own housing policies and promises of interventions without executing them makes hope difficult to hang on. However, it seems the take away from the current government’s Housing Policy worth hanging on would be the proposed setting up of a real estate authority and a housing fund which have been well received and perceived as a pragmatic proposition only if it would be sincerely administered. Industry bodies like the Ghana Real Estate Development Association (GREDA) has to up their lobbying act to get this proposition realised. The National Housing Fund would be used for affordable mortgages, construction finance, slum upgrading and support for small-scale local building material manufacturers. The new policy also seeks to create an enabling environment for the private sector to continue to provide leadership in the delivery of houses. With Dr Agyeman-Mensah’s further assurance that the government was putting in place some shortterm pragmatic measures to address the problem, perhaps the real estate industry and society’s collective hope for the provision of affordable housing could eventually find something solid to build on.

GHANA BUSINESS & FINANCE

BUILDING & CONSTRUCTION

of Ghana came out with a policy that aimed at plugging foreign exchange leakages and improving supply of foreign exchange into the markets and control exchange. The measure outlawed the local use of the dollar for local transactions, strict regulation of dollar accounts, amongst others. The policy naturally saw the exchange rate shoot up, and particularly affecting the real estate industry. Mortgage companies were not allowed to do Dollar loans anymore and this shot up the cost of Cedi loans, with interest rates becoming pretty high, between 28 and 32 per cent, compared to the Dollar loans that were hovering around 12 to 13 per cent. Coupled with the declining general economic performance, the target market of the different segments of the real estate industry changed. Now, when a developer is building a house costing US$50,000, it is no longer profitable because of the equally increased cost of the inputs. Hence, though the demand still exists that demand is not being satisfied because the cost of the properties are out of the reach of the initial target market, especially the mass market, as opposed to the luxury market. Ahiable comes in again: “For instance, let us take a scenario where you have a typical two-bedroom house going for $80,000. You know that in Ghana, you don’t do a hundred per cent mortgage financing; but you have to do at least a 20 per cent down payment. Now, 20 per cent down payment on a $80,000 house means that you have to make about $16,000 down payment. The loan that you will need to go for would be about $54,000. Now, this $54,000, at an interest rate of 12 per cent for 15 years would mean that you should be making a monthly repayment of about $758. Converted to the Cedi,

COVER

Tigo offers love to consumers As the pioneer mobile phone network in Ghana, Millicom Ghana Limited, operators of Tigo, has been a network of choice for consumers. Tigo recently re-launched its brand with a new tagline ‘Live it. Love it.’ and an exciting new product called Tigo Tribe which aims at pushing its digital lifestyle agenda. ANTHONY SEDZRO interviewed Roshi Motman, the CEO of Tigo Ghana, who explained the new brand and the exciting perks Tigo Tribe has in store for customers. GB&F: “Live it. Love it” What is this new Tigo tagline all about? RM: “Live it. Love it” represents a new phase for Tigo. It’s a renewed promise to our customers that we’re the brand that helps them dream, work, and achieve their aspirations. As a brand we want to empower businesses and customers, especially the youth, to improve their lives by using technology to their advantage. Our new tagline “Live it. Love it” isn’t just advertising slogan – it’s a new approach and a new direction for

us. The tagline reflects our ambition to improve internet penetration in the country, and to make the internet, and all the amazing features it comes with, a way of life for Ghanaians. GB&F: That all sounds very refreshing, but why now? RM: I’m sure you’ve heard of the expression, ‘adapt or die’, and let’s face it, in today’s rapidly changing business environment, you’ve got to keep reinventing yourself in order to stay relevant.

Despite being Ghana’s first mobile network operator, we’ve managed to remain a force to reckon with simply because we’ve been able to adapt to new trends in the market. Two years ago Tigo began a remarkable transformational journey to become the brand of choice for digital users in Ghana. To achieve this, we have done a complete overhaul of our business model, focusing on growth, long term sustainability and customer satisfaction.

Panel discussion

GHANA BUSINESS & FINANCE

APRIL 2016

if prices cover or exceed variable costs farmers will intensify farm management by investing in harvesting, weeding and the use of inputs. Price not enticing enough Many farmers say the producer price as at now is not enticing enough to encourage them to expand land or engender increase in the quantum produced. According to them, the low price of farmers’ toil explains why in APRIL 2016

the cocoa-growing areas in the Volta Region close to Togo, in the cocoa producing areas in the Western and Brong Ahafo Regions close to Cote d’Ivoire , cocoa is crossing to the other countries and Ghana is losing out. Cocoa, introduced commercially into the country in 1879 from Fernando Po by Tetteh Quarshie, an Osu blacksmith, plays a significant role in the Ghanaian economy. Despite the emergence of oil and gas, cocoa has remained the second

largest foreign exchange earner for the country, contributing approximately 35 per cent of Ghana’s Gross Domestic Product (GDP). Cocoa, a US$ 2 billion industry employs approximately 800,000 farm families spread over six of the ten regions of Ghana. In 2010/2011 the country reported its highest ever production of one million metric tonnes of cocoa, though industry insiders report that at least 10 per cent of this crop derived

from neighboring Cote d’ Ivoire. The peak production of one million metric tonnes attained in 2010/2011 was a direct result of policy initiatives (Hi-Tech and Mass Spraying) undertaken by the government from 2001 onwards. The two programmes continue but with cut backs so severe that majority of cocoa farmers are no longer benefiting as they used to prior to 2009. Experts say equally worrying is the cut back in the number of times chemicals are applied to the trees. From six sprays in a year to control swollen shoot disease, the number of applications has been reduced to only twice yearly. And from three sprays a year to control black pod and capsid, it is now only once a year. Aside the inadequate frequency of spraying the farms, the farmers are unhappy with the fact that in 2001 government took over the spraying of their farms under the ‘mass spraying’ exercise. They prefer that the government pay them the money for the mass spraying directly or indirectly through better producer prices. At the local level, the cocoa spraying programme has been hijacked by ruling political party activists who through patronage determine and dictate persons who deserve to benefit from the programme. Managers of the cocoa spraying programme at the local level also divert chemicals government import for the cocoa farmers to be sprayed on their farms free of charge into chemical shops, which the farmers go back to buy, hence increasing their production costs. Not doing a good job The farmers also complain that the people recruited by the government to spray their farms (the spraying gangs) are not doing a good job. They argue that because the gangs are paid on the basis of area covered, they aim at spraying as much acreage as possible rather than patiently spraying the canopy to target the capsids. The top-bottom system of doing things by the government in the industry has not been helpful in increasing production levels. For instance, technological breakthroughs have been made in the development of high-yielding hybrid varieties, breeding of cocoa types resistant to Swollen Shoot and Black Pod disease, control of capsids with insecticides, various cultural practices to control shade, and weed control. However, most of these recommendations scientific farming aids have not been widely adopted by farmers, who either do not GHANA BUSINESS & FINANCE

AGRICULTURE

to save the industry. Compared to their colleagues in other cocoa growing countries, Ghanaian farmers do not get the full benefit for their seeds. Since the farmer is the primary producer of cocoa wealth, there is an urgent need to link his/her price directly to the world market. There is evidence that farmers respond to price by changing the intensity with which they tend their farms. For example, when prices fall they stop with maintenance and with new planting activities. Conversely,

GHANA AT 59 SPECIAL

EXCLUSIVE INTERVIEW

‘Ghana needs economic independence now’ When fifty-nine years ago Ghana’s founder, Osageyfo Dr Kwame Nkrumah, made the historic “Ghana, your beloved country is free forever” declaration, Charles Heymann, a young nationalist, was at the Polo Grounds in Accra. Now a nonagenarian, the close Nkrumah ally tells MARTIN-LUTHER C. KING that some progress has been made by Ghana. Heymann, however, regrets that the country is a long way from achieving the economic liberation that Dr Nkrumah envisioned at the dawn of political independence. Ghana was the first country south of the Sahara to gain independence from colonial Britain on 6th March, 1957. transcend the borders of Ghana, to Nigeria to Kenya, to all over Africa.” So it was Dr Nkrumah who inspired us to change the name to the League of Ghana Patriots. The League of Ghana Patriots was very active when the historic meeting at Saltpond took place after Nkrumah decided that he had to break off from the United Gold Coast Convention (UGCC) and form the CPP (Convention People’s Party). So at Saltpond, the League was involved. GB&F: What was the aim of the League? CH: The aim was that with Nkrumah’s arrival, we were roused to his call for a trans-African liberation movement. So the League was essentially for the liberation of Ghana, first, and then the whole of Africa. So the aim fitted in with Nkrumah’s own concept.

GB&F: May we know who you are? Charles Heymann (CH): I am one of Dr Kwame Nkrumah’s cadres. I started as one of the young students that were inspired by Nkrumah’s arrival back in the Gold Coast in December 1947. Before he arrived, we were very ardent supporters of Dr J.B. Danquah. We used to organise rallies for him at

Palladium, Merry Villas and so forth. And he was our mentor in so many respects. And at that time we, as youths and young students, organised ourselves into the League of Ghana Patriots. In fact, we started as a club until Nkrumah arrived. When Nkrumah met us, he said, “Your organisation cannot be a club, it must be a league; but it must

GHANA BUSINESS & FINANCE

GB&F: What was the situation before Ghana’s independence? CH: Nkrumah was a visionary. At the same time, he was very pragmatic and practical. His vision inspired us to such heights that as youths were able to organise ourselves to support his vision. For example, Nkrumah fired us up with such sayings as “Across the parapet, I saw the vision of Ghana becoming a metropolis of science and industry” and so on. That in every respect was something that was a novelty to Ghanaians’ political aspiration then. So we caught on to that. He, at a point, organised a committee of youth organisations. Our League of Ghana Patriots became part of the committee. So we became an integral youth

APRIL 2016

NEW AND IMPROVED WEBSITE!