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AUGUST 2014 / ISSUE 039 GH¢10.00

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- Has Ghana had enough?

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

MTN’s

Serame Taukobong

#OccupyFlagStaffHouse

on being No. 1

THE FIRST BUSINESS READ IN GHANA

Follow us online at www.ghanabizfinance.com

18... Economy

GB&F

The size of Ghana’s debt and the repayments demanded of it have become another issue that its economic managers must face.

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

20... Can the state of Ghana continue

Editor S. Kwame Appiah kappiah@ghanabizfinance.com

to provide subsidies on various goods and services for its struggling citizens? Must it?

Columnists Jerry Halm Yvonne MacCarthy Julius Caesar-Tokoli

22... Banking and Finance

Contributors Martin Luther King Oppong Baah Anthony Sedzro Georgina Adjei Ayuureyisiya Kapini Atafori Art-Graphics Manager, Design Benjamin Tetteh Design & Production Daniel Sackey Yobo 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 GNA myjoyonline Daily Graphic Bloomberg radioxyzonline.com citifmonline Mergermarket Group Corporate Council on Africa ghanabusinessnews.com

Ghana Business & Finance magazine is published by

AUGUST 2014 / ISSUE 039 Front Cover: SERAME TAUKOBONG CEO, MTN Ghana

Contents 5...

6...

Editor’s Suite Briefs

24... ICT While generally acknowledged to be quite robust, quality of service is a long standing complaint against operators in Ghana’s telecom sector. What factors account for this and would punitive measure by the regulator help resolve them?

Highlights of business news from the month of July, including movements in corporate Ghana.

14... Word for Word Ghana Business and Finance speak to Sam Ato Gaisie, Chief Executive Officer of the Entrepreneur Foundation, Ghana about the next project from the organisation behind the Ghana Entrepreneur Awards.

16... By Invitation Our guest contributor and a leader of the Occupy Flagstaff Movement, Edward Tagoe, reports on the grievances that led a number of Ghanaians to demonstrate against the government on 1st July, 2014.

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.

AUGUST 2014

In the wake of the review of measures announced by the Bank of Ghana to stem the slide of the cedi, we look at the effects of the measures and the implications of the review.

ICT: Page 24

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

editor@ghanabizfinance.com

Global Outlook: Page 40

26... Special feature With Ghana planning a third Eurobond offering to raise funds for infrastructure projects, we ask if this is the right way to go. Is the government of Ghana ignoring other palatable in its euromania?

30... Cover Serame Tuakobong has inherited a company in rude health but in Ghana’s febrile telecommunication industry, the leader must run faster than those behind it, just to maintain its position. A year into his tenure, Mr Tuakobong discusses his views on the industry and how MTN can remain number one.

Perspectives: Page 48

37... Conferences and Events Upcoming events around the world that business leaders need to keep an eye on.

41... Executive Selection Openings in the C suites of corporate Ghana

42... Global Outlook Frontier markets’ research firm, DaMina Advisors, reports that the top thirty companies in Africa have bucked the trend of weak performance on the continent.

44... Beyond

China, African countries are building new partnerships with emerging giants such as India and Korea, presenting fresh challenges for traditional partners in the OECD zone.

52... Yvonne

Maccarthy shows how customer service can be deployed as a marketing strategy.

55... Toolkit

To guide the mobile business executive, we present six tablets that will ensure that that being of of office does not become being out of commission.

57... Stats and Indices

The Ghanaian economy by numbers.

58... Commodities

Market prices for commodities compiled by Esoko.

48... Perspectives Jerry Halm recounts some of his worst experiences from dealing with service providers.

50... Julius Ceasar-Tokoli thinks its Perspectives: Page 46

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time to have another look at how organisations are managed.

GHANA BUSINESS & FINANCE

Toolkit: Page 51

AUGUST 2014

EDITOR’S SUITE

The Eurobond-way is not the only way On these pages, we have, with the rest of Ghana and many outside it, agonised over the state of its finances. From the managers of the economy, we have had little more than terse assurances that it will soon be well.

W

ithout a well communicated plan for bringing the national books back into the black, we are left to surmise from the government’s actions, what its big idea is.

Above all, we believe that a sincere effort to tame national expenditure, reduce graft and trim waste, can no longer be delayed. Three Eurobonds can neither obscure nor extenuate that fact.

It would seem that government is once again turning to the money markets for relief. Twice deferred, the government now plans to issue a third Eurobond at the end of August, expecting about a billion to help fund its infrastructure projects in the medium term.

Elsewhere in the magazine, we provide the usual mix of news, analysis and opinion to guide your business activities. We speak to Sam Ato Gaisie, who hopes to encourage the patronage of locally produced goods with a new awards scheme. Initiatives such as his are important and we endorse the “Made in Ghana Awards,” which seeks the same end that we do: thriving, profitable Ghanaian businesses that provide value for consumers and jobs for Ghanaians.

We appreciate the government’s position. Disappointing proceeds from the major commodities and declining donor support mean that it has to seek inventive solutions to its cash flow problems.

But, as we argue in our special feature, a third recourse to Eurobond is not nearly inventive enough. Even before the bond issue, there are indications that debt repayments are becoming in and of themselves, a significant entry in the national budget. In resorting to debt financing, rather than PublicPrivate Partnerships, for example, to address the infrastructure deficit, we may be compounding our debt problem, further endangering the economy.

AUGUST 2014

Enjoy the issue.

S. Kwame Appiah Acting Editor

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Aviation

SAA eyes Accra’s air hub potential News that South African Airlines (SAA) looks to be homing in on Ghana as the most likely location for a secondary hub should bolster the country’s efforts to carve a niche as a regional air transport centre.

State-owned SAA has made West Africa the focus of its expansion plans, aware that the region –significantly underserved in terms of short-haul connections – offers significant potential in the form of rising passenger demand and increasing trade integration.

The push to expand the carrier’s presence in West Africa has come on the back of additional support from the South African state. In October of last year, SAA received a $598m guarantee from the government, paving the way for the airline to add to its main hub in Johannesburg, O.R. Tambo International Airport, before the end of 2016.

The scope for expansion in the market is sizable. Currently, West Africa, which has a population of more than 300m people and includes several of Africa’s largest frontier markets – such as Nigeria, Ghana, and Côte d’Ivoire – has only limited intraregional links.

A handful of airlines – including Nigeria’s Aero Contractors and Arik Air, and Togo’s Asky, along with the more recentlyfounded Air Cote d’Ivoire and Senegal Airlines – already provide connections between West Africa’s larger airports but ageing infrastructure, high landing fees, burdensome regulations, and limited maintenance facilities constrain both flight frequency and prices.

SAA had previously considered alternative options to Accra as a regional base, and previous media reports had raised the prospects of Dakar – which SAA already uses as a stopover for its direct flights to the US – as another potential West Africa base. However, Tlali stated that plans to turn Senegal into a regional hub were abandoned due to the strategy not being commercially viable.

According to South African press, SAA has also considered taking a potential equity stake in Asky as a means of entry into the regional market. However, Traoré Afsath, spokesman for the Togolese carrier – which is part owned by SAA’s Star Alliance partner Ethiopian Airlines – dismissed the takeover talk.

The attractiveness of Ghana as a secondary hub is clear. The 24m-person country has benefited from robust growth rates

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in recent years and has attracted record FDI inflows since the discovery of oil in 2007. Accra’s relatively low costs and stable security situation also play in its favour, and while the country does have four domestic carriers – Starbow, Africa World Airlines and Antrack along with Fly540 which recently suspended operations – it nonetheless lacks an Accra-based international flag carrier.

However, any push by SAA to expand its services and facilities there would require extensive work on Ghana’s aviation infrastructure, although the government has already begun the process of expanding capacity and upgrading the primary point of entry at Kotoka International Airport (KIA).

Figures show that traffic at KIA reached 1.7m in 2012, up from 1.6m the previous year, while domestic volumes rose from 200,000 to 500,000 over the same period.

Upside expectations for growth forecast as many as 10m passengers per year by 2024.

In 2012 Ghana Airports Company (GACL) announced its need to raise $738.2m through a PPP to help develop the country’s five airports, including KIA. Under GACL’s 2008 master plan, KIA’s terminal will be expanded from 25,000 to 62,300 sq metres; taxiways will be widened from the current 27 metres to 60 metres to accommodate larger planes; baggage handling equipment will be brought in and fuel infrastructure will be improved.

On June 25, GACL started work on the $21.4m expansion of the arrival hall in Kotoka’s terminal two, which will see new equipment installed and enable the airport to accommodate rising traffic. GACL is also pushing ahead with the development of Kotoka’s terminal three. While timelines have yet to be announced, the pre-qualification process for bidders is now complete.

Crucially, in May 2013 the minister of transport, Dzifa Attivor, announced that the government had acquired 6475 ha of land in the Ningo-Prampram area in the Greater Accra region, and is undergoing a final round of feasibility studies before starting construction on a new, yet-to-be-named international airport. A budget for the project has not yet been released. The GACL hopes to expand its landholdings in Ningo-Prampram to 24,280 ha before starting construction on the greenfield project – something that would take a minimum of eight years to complete, given the lack of existing utility connections to the area.

The infrastructure expansion will undoubtedly help underpin Ghana’s attractiveness as a secondary hub for SAA, although broader regional challenges – including high landing fees – mean that any carrier looking to improve connectivity in West Africa will need to take a long-term view.

AUGUST 2014

BRIEFS

Currency

Cedi seen firming ahead of Eurobond The cedi could begin a gradual recovery against the dollar in coming weeks on offshore greenback sales, boosted by expected Eurobond and cocoa inflows, traders have said.

to see some gains in local currency (against the greenback) if forex improves further," a Barclays Bank Ghana analyst said.

The local unit has remained stable in the past two weeks, after plunging about 30% in the first half of the year due to a shortage of dollars and concerns over a weak economy.

Minister of Finance, Seth Terkper cut the government's 2014 growth target and forecast a wider budget deficit and higher inflation, citing falling revenues, the slide of the cedi and declining gold prices.

Analysts forecast depreciation at a significantly lower pace in the second half of the year as cocoa inflows kick in.

Ghana is set to issue a third Eurobond of up to $1.5 billion later this month. The government will also sign a syndicated loan of $2 billion for next year's cocoa purchases, Terkper said, noting that the inflows will boost the country's reserves in support of the cedi.

"The cedi's depreciation has eased significantly as a result of this improvement in (offshore) inflows. We are likely

Economy

Ghana’s GDP falls below projected figure for 2013 G r o s s Domestic Product (GDP) data for 2013 s h o w e d an overall growth of 7.1 per cent against a target of 8.0 per cent. Seth Terkper, the Minister of Finance and Economic Planning in presenting his mid-year budget review to Parliament, said the 7.1 per cent growth showed a robust and strong performance, especially when compared to the sub-Saharan average of 4.9 per cent.

Mr Terpker said even though the 2013 GDP growth rate was slightly lower than projected, both the real and nominal GDP values were higher than projected. “The real GDP in 2013 was GHc32,507 million against a target of GHc32,109 million for the year. In nominal terms, GDP was GHc93,461 million, against a projected amount of GHc88,764 million,” he said.

The 2013 macroeconomic targets projected real overall GDP growth including oil of 8.0 per cent; real non-oil GDP growth of 6.5 per cent; end period inflation of 9.0 per cent; average inflation of 8.9 per cent; overall budget deficit equivalent to 9.0 per cent of GDP; and gross International Reserves of not less than three months of import cover for goods and services.

AUGUST 2014

On sector performance, Mr Terkper said the services sector was the largest contributor to GDP, with a growth of 8.9 per cent in 2013, compared to 11.0 per cent in 2012.

Key performing subsectors in the services sector were the Information and Technology, 24.7 per cent, Financial and Insurance Activities, 23.2 per cent, Public Administration and Defence; Social Security, 9.1 per cent and the Health and Social Work, 7.8 per cent subsectors.

“The Industry sector recorded a growth of 7.0 per cent, down from 11.0 per cent in 2012 on account of strong performances in the Mining and Quarrying (11.7 per cent), Electricity (16.1 per cent) and the Construction (8.6 per cent) sub-sectors.

Upstream petroleum activities also grew by 18.0 per cent compared to 21.6 per cent in 2012. The manufacturing subsector, however, continued with its declining growth trend by recording a growth of 0.6 per cent in 2013, with the Water and Sewerage sub-sector declining by 1.4 per cent. Mr Terkper said the Agriculture sector doubled its growth rate of 2.3 per cent in 2012 to 5.2 per cent in 2013. That, he said, was mainly on account of growth in the Crop sub-sector (5.9 per cent), Livestock sub-sector (5.3 per cent) and the Fishing sub-sector (5.8 per cent).

The Finance Minister said in terms of sector shares, the services sector increased its share of GDP from 48.4 per cent in 2012 to 49.5 per cent in 2013. The agriculture sector, on the other hand, continued to experience a declining share of GDP while the industry sector maintained its share of GDP.

GHANA BUSINESS & FINANCE

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BRIEFS

Financial services

Bank of Ghana to introduce Deposit Protection Scheme The Bank of Ghana is to introduce a Deposit Protection Scheme to promote confidence in the financial system, especially in relation to protecting the savings of depositors. The scheme will also encourage financial inclusion and access to formal financial services.

A draft Deposit Protection Bill has been finalized for onward submission to Parliament for passage into law.

Dr Henry Wampah, Governor of the Bank of Ghana, who announced this at the 14th annual working luncheon of the Ghana Association of Bankers (GAB) in Accra, said the fallout from the global financial crisis had aroused interest in the protection of consumers of financial services.

“Inherent vulnerabilities and risks, coupled with the learnt lessons of the global financial crisis calls for a re-thinking of the legal and regulatory regime of our industry,” he said, in a speech read on his behalf by Dr Abdul –Nashiru Issahaku, the Second Deputy Governor.

Dr Wampah said the Bank is also working on the revision of the Banking Act, while a draft proposal of the Bank and Specialized Deposit-Taking Institutions Bill, had been prepared and was under-going review. He said the new Bill would incorporate some of the missing links in the current Act, including consolidated supervision, reinforcement on exposures of connected nature, prompt corrective actions, Islamic Banking, and detailed Resolution Framework.

On the performance of the cedi, Dr Wampah said pressures on the local currency still persisted although there was some

moderation in the pace of depreciation on a month-on-month basis.

He said anticipated proceeds from the cocoa syndicated loan and from the Eurobond issuance estimated at almost US$3bn would provide significant support for the market in the second half of the year. Besides, the onset of gas production in the fourth quarter of the year would also reduce oil imports going forward.

However, he said, the current depreciation of the cedi, while inimical to import-driven businesses and on the flip-side supports export-oriented companies which in my opinion lends itself to profitable funding opportunities for banks to foster economic growth.

At a press conference after the GAB annual general meeting, the President of the GAB, Mr Simon Dornoo, underscored the continued commitment of members to support the growth of small and medium enterprises (SMEs).

He said contrary to impressions that members did not like to finance the SME sector, evidence from the loan books of members clearly showed that the level of support to the sector was huge.

Mr Dornoo said while the strategy of banks might vary as to how they support the sector, evidence existed to show that the SME sector was a major beneficiary of bank credit.

Mr Frank Adu Jnr, Managing Director of CAL Bank, said since more than 80 percent of companies in the country are SMEs, it clearly underscores the fact that the sector is a big beneficiary, adding that the loan books of banks showed that between 70 and 90 per cent of the credit went to SMEs.

Banking sector firms year-on-year Ghanaian banks’ total assets have grown significantly over the past year, data from the Bank of Ghana (BoG) have suggested.

in May 2014 compared to 13,4 percent in May 2013.

However, NPLs (less loss provisioning) ratio remained broadly unchanged at 5,3 percent.

According to the central bank, total assets grew by 44, 4 percent year-on-year to GH¢42.9 billion at end of May 2014, compared with GH¢32.1 billion a year ago. The bank said data collected from January to May this year indicates that the banking sector remained sound and continued to expand. The asset growth was on the back of advances, which accounted for 45,1 percent and was funded largely by deposits which went up by 32,5 percent year-on-year, the central bank disclosed.

The Capital Adequacy Ratio of banks declined to 16,7 percent in May 2014, from 18,1 percent in May 2013 on account of increased credit delivery but remained above the regulatory benchmark of 10 percent.

The Governor of the BoG, Dr Henry Kofi Wampah, noted that key monetary aggregates grew at a rapid pace driven largely by Net Domestic Assets of the banking sector.

Interest rates on the money market generally moved upwards in tandem with the BoG’s tight monetary policy stance.Economic activity remained fairly strong in the first quarter of 2014 despite adverse supply side shocks.

Broad money (M2+) grew by 30,8 percent year-on-year to end May 2014 at GH¢22,8 billion, compared with 17,1 percent growth in the same period last year, he added.

Similarly, annual growth in Reserve money was 38,2 percent in May 2014, compared with 24,5 percent growth in May 2013. Also during the period under review, NonPerforming Loans (NPLs) ratio declined to 12,8 percent

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GHANA BUSINESS & FINANCE

However, the bank’s credit conditions survey conducted in June 2014 suggested the tightening of credit stance for most loan types including consumer credit, small and medium enterprises (SMEs), large enterprises and short-term loans.

The Bank’s Real Composite Index of Economic Activity (RCIEA) rose by 9,7 percent on a year-on-year basis in the first quarter, compared with 0,5 percent growth in the same period of 2013.

The major growth drivers were Domestic VAT and Deposit Money Banks’ (DMBs) credit to the private sector.

AUGUST 2014

Ghana Statistics Development Project launched The Ghana Statistics Development Project was on Thursday launched in Accra by the Ghana Statistical Service (GSS). The Project is to ensure that relevant and quality statistics are produced on a timely and reliable basis for effective decision making.

The Project is to be implemented by 10 Ministries, Departments and Agencies (MDAs) namely the Ministries of Education, Health, Trade and Industry, Communications, Lands and Natural Resources, Employment and Labour Relations, Agriculture, Gender, Children and Social Protection, Local Government and Rural Development and the GSS. Mr Cassiel Ato-Forson, Deputy Minister of Finance, launching the Project said it aimed at strengthening the capacities of the participating MDAs in the production, dissemination and use of statistics. He said the Project has four components including institutional reform and organizational change, enhancing statistical capacity, data production and dissemination and project management, monitoring and evaluation.

Mr Ato-Forson said government “is aware that weak and ineffective national statistical systems affect the production of adequate statistical information for decision making and progress monitoring in any development agenda”. “Without statistics, our reports remain credibly weak and cannot be used for any analysis. We cannot measure any increases in our achievements and are unable to account properly for the resources made available to us”.

He said the country need more reliable official statistics for better decision and for more accurate and comprehensive statistics to achieve targets set within the Ghana Shared Growth and Development Agenda 11. The Project is supported by the British and Dutch government for the grant of 10 million dollars and the International Development Association with a credit of 30 million dollars.

Dr Osei Boeh-Ocansey, Board Chairman of GSS said the grant and credit facility is to be used to finance data production, improve quality control and assurance of the production and dissemination of national statistics and develop a national databank for official statistics.

Dr Boeh-Ocansey said with the implementation of the Project, the GSS and the implementing MDAs would have no justification for non-performance and pledge their support for the success of the project.

Mr Yusupha B. Crookes, World Bank Country Director expressed satisfaction for supporting the project stressing that it believed in a credible and reliable data for efficient and effective decision making. He said World Bank supported the project to ensure strong and efficient national statistic system, better monitoring system and effective management system for good decision and easy accessible data.

Mr Crookes urged government to make good use of the project and called for strong commitment and openness about data producers for reliable and effective data.

AUGUST 2014

Financial services

BRIEFS

Statistics

First National applies for banking licence in Ghana

Mike Vacy-Lyle First National Bank (FNB) has abandoned its efforts to acquire a bank in Ghana and will instead start its own business there after it applied for a banking licence. A start-up operation in the country will expose the FirstRand group to a high-growth market more cheaply and efficiently, as acquisitions generally require more capital.

"Initially, Ghana is going to be a greenfields," FNB Business CEO Mike Vacy-Lyle said. "We’re going to start from scratch; we are going to organically create a fully fledged retail and business banking presence."

FirstRand’s plans to acquire a 75% stake in Merchant Bank of Ghana collapsed last year. Analysts agree that a greenfields approach is the logical way to enter the market rather than allocating large chunks of capital to an acquisition. "It’s much better to grow organically than to buy something," Sanlam Investment Management Global fund manager Kokkie Kooyman said. "Buying something clearly works if you get a good partner at the right price ."

Another banking analyst, from an international bank, said FirstRand was taking a long-term view that Ghana was a "multi-decade story". This would create an opportunity to build a banking platform over time.

Some of FNB’s competitors are already established in Ghana.

These include Standard Bank’s Stanbic Bank Ghana and Barclays Bank of Ghana.

World Bank data show that the Ghanaian economy, which has a population of about 26-million, grew 5.5% last year. The bank expects growth to remain about the same levels this year. But the World Bank expects higher growth rates from 2016 when the West African country starts producing gas and exploits new oil fields.

At the end of last year there were 27 deposit-taking banks in Ghana and three credit reference bureaus, the Bank of Ghana’s 2013 annual report shows. Of the 27 deposit-taking banks, 12 are Ghanaian and 15 are foreign-owned, and in total they had 892 branches.

Data from the Global Partnership for Financial Inclusion — a platform for Group of 20 (G-20) countries, interested non-G-20 countries and other relevant stakeholders — show that 29.4% of people over the age of 15 in Ghana had an account at a formal financial institution.

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Agriculture

Ghana Broiler Revitalization Project launched Ghana Broiler Revitalization Project (GHABROP) aimed at boosting local capacity in the production, processing and marketing of broiler chicken has been in Accra. The project would also develop the poultry industry along the poultry value chain and ensure that production farms, input suppliers, hatcheries, feed mills, veterinary service producers, processors, marketers/cold stores and consumers all play their roles to ensure self-sufficiency.

The project is an initiative of the Government of Ghana through the Ministry of Food and Agriculture (MOFA), in collaboration with the Ghana National Association of Poultry Farmers (GNAPF), which would run for 10 years.

Dr Hanna Louisa Bissiw, Deputy Minister of Food and Agriculture in-Charge of Livestock, launching the project, said the project was necessary and crucial to the survival of the local broiler industry.

To date eight hubs and 58 satellite farms were selected to start the project in the Ashanti and Brong Ahafo regions. The hub farms will subsequently work with satellite farms to grow more broilers for them under production contracts.

The Deputy Minister noted that hub farmers were selected based on farmer’s acceptance and commitment to the terms and conditions of the project; farmer’s experience in broiler production; availability of space, and performance in similar projects in the past.

“The hub farmers will be financially and operationally responsible for the satellite farmers and are the channels through which resources (funding/inputs) will get to the satellite farms.

Importantly, they will jointly supervise the satellite with the Technical team from the MOFA to ensure conformity to quality standards and avoidance of side marketing of the mature broilers. “It is expected that the birds would be ready by the 45th day to be picked up by the processors for processing, and then packaged for the marketers, for distribution,” she added.

Dr Bissiw said one of the important safeguards in the project is that contractual agreements have been made between the sponsor and hatcheries, feed mills, farmers, processors and marketers who would be off-takers at agreed and negotiated prices.

“As you may be aware, Ghana is deficient in her meat and milk requirements. Unfortunately the present levels of livestock and poultry production are woefully inadequate to meet the animal protein needs of 24 million human population.

“This has resulted in Ghana becoming a net importer of frozen meat of which poultry meat constitutes the highest proportion,” she said.She said between 2010 and 2012, Ghana imported approximately 200,000 metric tonnes of chicken valued at 200 million dollars which is equivalent to 2.6 million chicken per week.

The Deputy Minister said she believed that increasing local livestock and poultry production in the country was the way forward in ensuring not only self-sufficiency in meat production but also the creation of employment opportunities for the youth in alleviation of poverty. She said it would also ensure better health for the people and conservation of foreign exchange used in importing huge quantities of frozen meat into the country. She stated that the target of the project is to produce 30,000 metric tonnes of broiler meat with an expected increase to 60,000 metric tonnes by the year 2016.

These targets, she said, would progressively reduce Ghana’s meat import burden to 40 per cent by 2016, in line with MOFA’s national livestock strategy policy to increase the supply of meat, animal and dairy products of domestic production from the current aggregate level of 30 per cent to 40 per cent of national requirement by 2016.

Dr Bissiw said arrangements are far advanced in terms of hatching eggs earmarked for the project, the eggs would be hatched by selected hatcheries and the day old broiler chicks made available to selected hub farms for brooding.

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She said MOFA had put mechanisms in place to ensure that the market was secured for the broilers that would be churned out by the project and assured the public that the products would meet the desired quality and packaging standards.

The Deputy Minister said one of such mechanisms included strict enforcement of import permit quotas for meat imports and evidence of purchase of locally produced chicken by importers before the issuance of new permits to them.

Mr Kwame Qokro, Executive Secretary of GNAPF, said the association is highly committed to the project because of the huge socio-economic benefits it held for the Ghanaian economy. He said the project would stem the current growing imports of poultry products, create employment, sustain the local poultry industry, guarantee food security and quality chicken, and increase supply of animal protein.

He, therefore, urged MOFA to establish the National Poultry Council to regulate the industry. “GNAPF has a strong belief that strict adherence to quality standards along the broiler value chain is non-negotiable and we need a Council to take up this responsibility,” he added.

Mr Qokro commended the out-gone Minster, Mr Clement Kofi Humado, for his keen involvement and the unprecedented commitment of the unrelenting Deputy Minister, Dr Bissiw and Haruna Iddrissu, Minister of Trade and Industries.

“Importantly, GNAPF cannot fail to state the strong interest and commitment of His Excellency, the President of the Republic of Ghana, John Dramani Mahama, to the poultry industry in Ghana. His creation of the GHC20 million Poultry Stimulus Fund demonstrates an unparalleled belief in the local poultry.”

GHANA BUSINESS & FINANCE

AUGUST 2014

Essah replaces Ofodile at Vodafone

Vodafone Ghana announced the appointment of Agnes Emefa Essah as its new Chief Marketing Officer, replacing Uche Ofodile who resigned from that position last month. In her new role, Agnes will be responsible for overseeing the Vodafone brand, marketing and marketing communications strategies of the company, as well as the delivery of innovative products and exciting campaigns that will enhance Vodafone's brand value and increase its market share.

Before joining Vodafone, Ms Essah was the Marketing and Innovation Director at Guinness Ghana Breweries Limited, a subsidiary of Diageo Plc, where she was responsible for business strategy, innovation and brand building. She joins Vodafone highly-rated, with awards such as Marketing Practitioner of the Year 2012 by the Chartered Institute of Marketing Ghana (CIMG) for her marketing excellence and leadership.

“Agnes brings an impressive depth of marketing experience and we are pleased to have her join us. Her invaluable skills will be beneficial to Vodafone as we continue to lead innovation in the industry and provide Ghanaians with the best telecommunications products and service,” Vodafone said in the statement announcing her appointment. The new Vodafone CMO, holds a Masters in Business Administration from the University of Ghana Business School and a Bachelor of Arts degree from the University of Ghana.

Tigo Ghana makes new appointments

Tigo Ghana announced the appointment of Jesse Agyepong as Head of Marketing and Elizabeth Arhin as Head of Human Resources respectively. Mr Agyepong assumes responsibility for developing and implementing the annual marketing strategy for Tigo Ghana leading to an enhanced brand, customer and revenue market share.

He joins Tigo Ghana with eleven years of experience working as a marketing professional, driving revenue growth for telecommunications, FMCG, electronics and event management companies.

His professional career has seen him work insome middle to senior level positions including Head of SME Business; Head of Enterprise servicesand Head of customer acquisitions.

He joined Tigo from Vodafone Ghana where he worked as the Head of consumer marketing with the responsibility of developing and managing the Customer acquisition roadmap, Data and VAS portfolios.

Prior to Vodafone, Jesse worked for other Blue Chip companies including Philips (West-Africa), Airtel Ghana, Diageo (GGBL) and Charterhouse Ghana. Ms Arhin has a wealth of experience in performance management, talent development, resourcing and employee engagement gathered from over 20 years of experience in both Ghana and the UK.

New appointments at Guinness Ghana

Before joining Tigo, she worked with G4S Security Services, an international security company, as the Human Resource Director. Prior to that, she worked in similar roles with Guinness Ghana Breweries Limited and British American Tobacco. In the UK, she worked with the London Borough of Croydon, Reynolds Porter Chamberlain, and the British Broadcasting Corporation. Elizabeth holds a double Masters degree in Manpower Studies from the University of Westminster, UK and in Ministry from the Trinity Theological Seminary, Ghana.

Mr Adadevoh has worked with the business for over 20 years and has enormous experience across the Supply and Human Resources functions. His previous other key roles include HR Director, Serengeti Breweries in Tanzania, HR Business Partner – Demand, and Talent & OE Manager. Whilst in the Supply function Eric worked across the Brewery Leadership Teams.

New head for Jaguar Land Rover SA and SSA

Guinness Ghana Breweries Limited (GGBL) appointed Eric Sewornu Adadevoh and Nick Cook, as Human Resource Director and Commercial Director respectively.

He brings a wealth of experience, knowledge of the business and a passion for people to the role. Mr Cook joined Diageo from Nestle UK where he held several positions in sales and customer marketing after starting as a sales rep on their graduate scheme.

In his most recent role as the Customer Marketing Director for Africa, Nick step-changed the function into a strong commercial planning organisation while developing and executing new proven growth drivers for the Africa business. As the Commercial Director – Spirits and Customer Marketing, Mr Cook will focus on the GGBL’s spirits agenda which is a critical enabler in delivering the F17 growth ambition.

AUGUST 2014

Richard Gouverneur is the new Managing Director for Jaguar Land Rover South Africa and subSahara Africa, taking over from Kevin Flynn.

Mr Gouverneur joins the South Africa and sub-Sahara markets from his post as Network Development Director for Jaguar Land Rover in the Middle East and North Africa (MENA). He had previously been Acting Managing Director for the region.

He has previously worked in finance roles for both Ford and Jaguar Land Rover in South Africa. He also spent time developing automotive supply businesses in SA and the Middle East prior to joining Jaguar Land Rover in 2010.

Mr Gouverneur will take the helm of Jaguar Land Rover South Africa and sub-Sahara Africa on 1 August 2014.

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BRIEFS

Movers and Shakers

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1st Ghana Oil & Gas awards of excellence & Local content forum

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1) Cross section of delegates 2) Question and answer time 3) Norway Ambassador to Ghana Her Excellency Hege Herzberg 4) Hon. Fiifi Kwetey guest of Honor 5) Mrs Adobea of Technip Engineering receving their award 6) Paint manufacturer of the year went to Cresta Paint 7) Mrs Dickson receiving award 8) Ambassador Hege on behalf the government and people of Norway receives award for their unique contribution to the oil and gas industry in Ghana 9) Reverend Daniel Asante of KNUST receiving award 10) Mr. Kwaku Ennin left of Zeal Technologies receiving award 11) Catering company of the year Mea Catering ltd. 12.) Award to the government and people of the USA for their unique contribution in the oil & gas industry 2

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WORD FOR WORD

“Consumers need excellent and quality products” - Sam Ato Gaisie Closely linked to the country’s economic difficulties are the struggles of its industries.

Ghanaian producers are, among other things, infamously incapable of competing with foreign rivals. The Ghana Entrepreneur Foundation recently launched a “Made in Ghana Awards” scheme which it thinks can help remedy the situation. We spoke to the Chief Executive Officer of the foundation, Sam Ato Gaise, about the challenges of local industries, how they can woo local consumers and how his new initiative can help improve standards.

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GB&F: Your theme, “Industrialisation, the key strategy to accelerated economic development and job creation” suggests that you’ve given the matter some from collapsing. If you thought. How do you think promoting GB&F: What advice do you have for import products that are made in Ghana goods can deliver the Ghanaian entrepreneurs themselves as industrialisation that you yearn for? they seek to grow their businesses? being manufactured in SAG: A progressive job-based economy SAG: In modern entrepreneurship, it Ghana, you will have to can only be achieved through extensive is all about innovation and modern industrialisation and readiness of the technology, We need to innovate, come pay that levy...” public to patronise locally-manufactured out with innovative products. It is also goods and services. We seem to ignore the prudent to import technology in a form numerous calls for an industrialised economy; but the truth of manufacturing representation. For example we spent more stands that it is the key strategy to accelerate development of foreign currency to import processed tomato puree, poultry Ghana’s economy and also create lots of jobs to address the and rice products, if the market leader in Ghana decides to alarming unemployment rate in the country. manufacture the product in Ghana instead of importing, we shall save the Cedi from depreciation and also create more GB&F: How do you think the awards will help the cause employment. A company in Ghana was importing Hunters of local businesses and the Ghanaian economy as a whole? gold and savana beer and now it is being produced in Ghana SAG: We cannot give up on the call for the public to patronise

by Distell Company who until the production was importing made-in-Ghana goods and services in order to save the cedi them, meaning they are now creating jobs and saving the Cedi from depreciation, a situation that can be addressed by from depreciating. We need more of such companies in Ghana, limiting imports to the country. Ghanaians should also make and the government must assist them with some tax relieves. conscious efforts to buy and use made-in-Ghana products in our homes, board meetings and official functions in order to GB&F: In terms of its organisation, how will the Made in save manufacturing industries in Ghana from collapsing, local Ghana Awards be different from the Ghana Entrepreneur companies need the appropriate legislations and environment Awards? to operate and thrive, and hope that the awards will motivate SAG: Entrepreneur Awards is a personality awards program and companies in Ghana to improve on their products and services. focuses on the promotion of entrepreneurship. The purpose of the Ghana Made awards is to expose Ghanaian indigenous GB&F: What factors should motivate consumers to products to all citizens in the country in an effort to create patronise made in Ghana products. What is in it for them? awareness and promote Ghana-made products and services.

SAG: Ghanaian consumers need excellent and quality products It is a national nonpartisan awards to create unity amongst with good packaging. The public should also be patriotic and Ghanaians. make a conscious effort to consume made-in-Ghana products, the more we do this, the more we save both indigenous and GB&F: As an event organiser and entrepreneur yourself, multinational industries in Ghana from collapse. what lessons have driven your success that you can share with others in the business?

GB&F: What have you found are some of the key challenges SAG: Its all about business integrity, business networking, that local businesses face in their quest to attract customers business innovation, coming out with unique products and in Ghana and beyond and how can they be addressed? ability to control your companies expenditure. If you contract a SAG: The key challenges are bad packaging,we need to loan from the bank to buy expensive cars instead of expanding package our product to compete internationally, Modern your business, you will spend all your time thinking of how Distributorship, Manufacturers need to entice and attract to pay the loan rather than thinking of how to expand the importers to buy and distribute made in Ghana products business and compete locally and internationally. as against the importation of the same products to save the Cedi from depreciation. Manufacturing industries should GB&F: After the Made in Ghana Awards, do you have any concentrate on the production of their products and appoint other projects lined up that the business community should distributors to also concentrate on the distribution. We need to look forward to? flood the market with made in Ghana products .

SAG: Yes. As I mentioned earlier about innovation, we are coming out with innovative products, one of them is GB&F: Ghanaian products have to compete with foreign how to industrialize our communities and create youth products for the attention - and wallets - of the consumer. entrepreneurship talents.

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WORD FOR WORD

Some suggest that government implement protectionist policy interventions to protect them. Do you think that is a sustainable solution to that challenge?

SAG: Yes there is the need to protect the local industries.

How can imported goods be cheaper than local manufactured goods? We need a special protective levy to protect some of our industries from collapsing. If you import products that are being manufactured in Ghana, you will have to pay that levy and it will be used to support the local industries in a form of SME loans. That means if you import tissue, the levy collected from tissue importers will be given to tissue producers in Ghana in a form of loan to “We need a special expand their industries and this will attract protective levy to protect importers and traders to buy and distribute made in Ghana products or establish their some of our industries own manufacturing plants.

Ghana Business and Finance: Following the success of the Ghana Entrepreneur Awards, what led you to choose Made in Ghana products as the focus of your next endeavour?

Sam Ato Gaisie: Some Ghanaian manufacturing companies have good products but lack innovation and modern distribution strategies to compete internationally. Just look at how cocoa is utilised internationally and compare the consumption in Ghana. We can only reduce poverty through sustainable industrial development and industralisation is a key strategy to modern economic development.It is only the private sector that can create jobs to ease the unemployment deficit in Ghana.

BY INVITATION

#OccupyFlagStaffHouse - Has Ghana had enough?

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fter 90 minutes of World Cup football, the Bahraini referee, Nawaf Shukralla blew his whistle, bringing to an embarrassing end, Ghana’s quest to repeat its successful campaigns in the previous tournaments in South Africa and Germany.

“The Black Stars look tired, they must have been counting money throughout the night” was one of the catchy comments passed by the observant commentator who, like many other football-loving Ghanaians did not fail to see a dip in the team’s performance. In the previous tournament, Ghana became popular for being the first African nation to have come closest to the World Cup semi-finals. In this edition of the biggest football competition in the world, the Ghana Black Stars and their country of origin had become a laughing stock in local and international media.

Hours before the team’s loss, the President of Ghana and central bank officials had ordered at least $3 million to be airlifted from Ghana to Brazil to pay the players’ appearance fees without which they threatened to boycott training and subsequently, their final match against Cristiano Ronaldo’s Portuguese squad.

Football has for many years been an activity which unites Ghanaians from across all divides. Seeing the 23-man squad make the West African nation and the whole of the continent proud was enough to get us all to forget our challenges and differences for a while. The early exit from the Brazil 2014 competition suddenly got the nation to wake up, forget about football momentarily and smell the rot of the economic challenges the nation had been plunged into.

All of sudden, more and more people began reporting and posting comments on social media about fuel shortages and

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Edward Amartey-Tagoe

how it had become a lot more difficult to find fuel in an oilproducing country, an event which bothered many drivers and car owners. Interestingly, the fuel shortage had started some days before it had become a common topic on social media but during the period of the Black Stars’ involvement in the World Cup, many Ghanaians considered it as a secondary issue.

Within a short period, Ghana’s crises became a lot more visible to its citizenry. Fuel shortage, frequent blackouts and erratic water supply in parts of the capital city were but a few of the issues people complained about. These challenges coupled with a worrying drop of the local currency against major trading currencies such as the United States Dollar, British Pound and the Euro, increasing inflation, a decrease in the prices of the country’s major commodities such as cocoa and gold made personal and professional life of the ordinary Ghanaian hard to bear.

To make matters worse, corruption has been haunting the current administration with different doses of its bitter pill.

Almost everyone knew about the popular SADA, GYEEDA, and alleged SUBAH contracts which were purported to have been fulfilled with shady deals. In the midst of all these roadblocks was the President, John Dramani Mahama who had time and again shown his team’s commitment to put an end to corruption in his government. After one and half years of his presidency, his citizens seemed to have become fed up with rhetoric and speeches with flowery wording, ensuring the government’s commitment to fight corruption. Though the President had made it clear he would not tolerate abuse of office and poor performance, his team seemed to unintentionally fall into this very trap every now and then. In 2013, the then deputy Minister of communications, Ms. Victoria Hammah, was fired by his Excellency following her alleged comments on

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a leaked tape about her wish to make at least $1 million before she retired from public office.

President Mahama had some weeks earlier to the fateful final Black stars exit from World Cup Brazil hosted representatives from various quarters including academia, civil service, political parties (excluding the biggest opposition party which boycotted the event for various reasons), groups and associations. The two day gathering of big wigs at Senchi, one of Ghana’s plush hotels outside the capital produced a 22-point consensus which was termed ‘the Senchi Consensus’ on the way forward. The party seemed to have a plan to pursue this agenda until Mr. PV Obeng, a major player in this event surprisingly died after a short illness. This unforeseen twist in the plan, up until this point, according to some official spokespersons of the President, has delayed the implementation of the suggestions advanced in Senchi.

With all these challenges hanging around the government’s neck, the citizens seemed to be the ones going through unbearable periods of trying hard to make things work.

In June this year, a few Ghanaians seemed to have gone beyond their elastic limits. No one saw it coming, but over a period of three days, there seemed to have been an avalanche of frustration poured out by Ghanaians on social media and radio networks in the country. These efforts, though initially from various dissatisfied quarters, culminated into a loud and clear voice - the citizens could no longer bear the economic hardships knocking on their doors, and they wanted the government to do a lot more to resolve the problems. For three days, the Ghana Union Traders Associations (GUTA) convinced its members nationwide, in Accra and Kumasi especially to close shop and forgo income in protest of the influx of foreigners in the trading business and the tough economic times which kept making their work more and more tiring by the day.

These traders import most of their wares and goods from other countries, thus their business depends heavily on the stability of the local currency to succeed. The three day GUTA strike affected many shoppers and consumers, especially those in Kumasi. Taxi drivers and other public transport operators parked their vehicles because there weren’t enough people in town to transport. Abossey Okai, Ghana’s biggest auto spare parts market, as a member of GUTA also closed its shops, sending shivers down the spine of the thousands of patrons who throng the market for options.

The GUTA and other protests had probably caught the government’s attention or was it just coincidence, that on 1st July, the day marked for the introduction of more taxes and an increment in fuel prices, the government announced its suspension. The introduction of the Value Added Tax (VAT) on 32 non-core banking services was suspended together with hikes in fuel prices. Despite the suspension, Tech Republic a

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Erratic supply of electricity nationwide.

Unreliable supply of potable water across the country.

Ever-depreciating value of the cedi.

Constant increases in taxes.

Inefficient revenue collection.

Very poor road networks.

Constant increments in utility tariffs.

Frequent increase in the prices of petroleum products.

Government’s inability to make statutory payments timely to schools, health facilities and other state institutions.

Government’s inability to address labour-related issues on a timely basis.

Government’s inability to exhibit decisive leadership in the fight against corruption.

Government’s inability to kick out incompetent and non-performing appointees.

The over-politicization of socioeconomic issues along partisan lines.

Government’s inability to create job opportunities for the youth and fresh graduates.

Government’s inability to effectively regulate small scale mining (galamsey) activities.

Improper administrative decisions taken by some government officials.

Lack of proper communicative skills on the part of some government officials.

The Non-Passage of the Freedom of Information Bill The Non-Implementation of the Senchi Consensus.

Government’s inability to tackle perennial flooding in the capital city and elsewhere in Ghana.

One thing was clear during the Republic Day protest - the group did not seek a regime change. Individuals put aside their political affiliations, if any, for a day and provided critical feedback outlining areas which needed urgent attention.

Popular submission from frustrated folks on social media and at the protest advised the leadership of the nation to be more open with its challenges by avoiding half-truths. Others suggested the President take a more strict stand when incompetence is displayed by members of his cabinet or government officials.

Ministers who are cited to have committed one blunder or another were usually re-assigned to other sectors or portfolios.

The Republic Day protest though attended by only about 500 people, got lots of media attention and in no time was the event people talked about the most online, on air, in homes and offices. There is no debate about its impact, at least in the media.

The writer is an entrepreneur, blogger, social media activist and a leader of the Occupy Ghana movement

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BY INVITATION

small but influential group of technology entrepreneurs and users in Ghana, in the evening of 30th June, shut down their online websites and blogs ostensibly to protest against the harsh economic times. In all more than 10 popular websites, blogs and e-commerce stores were affected by this decision. A day later, a smaller group of about five hundred, mainly middle class professionals, convened on the day Ghana celebrated 54 years of Republican rule. A petition was put together by a group which took upon itself the responsibility of informing the police about its intentions. The petition which so far has been digitally signed by more than two thousand petitioners raised several challenges as issues to which the government must pay immediate attention.

ECONOMY

The debt trap Martin-Luther C. King

Each Ghanaian, including newborn babies, now owes a debt of GHc 2,246 (USD 740.00). This is their individual share of their country’s GHc 58.4 billion in public debt. The figure represents 55.4 per cent of Ghana’s GDP, according to the World Bank.

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hana is also readying to issue its third Eurobond worth USD 1 billion for 10 years to mainly refinance maturing debts and other interest payments.

Ghana debuted a 10-year Eurobond seven years ago after enjoying macroeconomic stability and debt-forgiveness between 2002 and 2007. The issue, which raised USD 750 million from investors at a coupon of 8.5 percent, made Ghana the first nation in sub-Saharan Africa after South Africa to borrow from the international capital markets.

The government issued a second 10-year bond in July 2013 to raise USD 750 million in cash and USD 250 million in a buy-back of the 2007 issue. But analysts said the yield of 8 percent on the bond, compared to 5.63 percent and 6.63 percent on bonds sold by Zambia and Nigeria respectively in the 12 months to Ghana’s sale, reflected the worsened domestic economic situation, with large fiscal and current account deficits souring investor sentiments.

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Of the country’s total public debt, the domestic debt component was GHc 27.8 billion, or 47.5 percent of the overall total debt position.

Provisional data on government fiscal operations indicate lower than budgeted outturns for both revenues and expenditures for the period January to May 2014, according to the Bank of Ghana. Total revenue and grants for the review period was GHc 9 billion making up 8.5 percent of GDP, which is below the target of GHc 9.5 billion which is 9 percent of GDP. Total tax revenue amounted to GHc 7.1 billion, lower than the estimated GHc 7.3 billion. Non-tax revenue outturn was almost in line with projected estimates at GHc 1.8 billion, driven mainly by

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of borrowing may return the country to the highly indebted poor country (HIPC) status, which she exited in 2006.

Also, just over the first three months of this year the government borrowed about GHc 6.3 billion from both domestic and foreign lenders; and, between January and May this year alone, the government paid GHc 2.8 billion in interest on loans contracted as against an expected figure of GHc 2.2 billion heightening concerns that the country’s increasing debt stock may be difficult to clear on time in the near future.

For instance, interest costs and weaker revenue growth on the back of rising macroeconomic uncertainty has pushed the budget deficit to over 10 percent of GDP – the third consecutive year of double digit budget deficits and well above the government’s target of 8.5 percent, as noted by the leading ratings agency, Fitch.

Fitch predicts that this, combined with the steep depreciation of the cedi, will see the public debt jump to 61 percent of GDP by the end of 2014, from 58.2 percent at end-2013. Debt servicing costs have also risen steeply, to an estimated 6 per cent of GDP in 2014 from 3.3 percent of GDP in 2011, adding to the intractable nature of Ghana’s fiscal position, the credit agency “Doubtless, Ghana added in its latest statement on the presently faces significant country.

Experts, however warn that the debt burden will remain sustainable only if new borrowing is spent in areas that will help to maintain high economic growth rates. It is questionable as to whether that has been happening so far.

A former deputy governor of the Bank of Ghana, Dr Mahamudu Bawumia warned that the trend of borrowing by government could have long term ill consequences on the economy, but Dr Kofi Wampah, Governor of the Bank of Ghana (BOG), said there is no cause for alarm.

“I don’t think that the debt situation is bad.

It is the trajectory and how quickly it is growing that we need to look at. Fifty or 55 percent is not entirely out of this world…I think that that is what is of concern to both the Minister of Finance and also to the Central Bank. And that is why there is this fiscal consolidation.”

macroeconomic challenges...leading to a continuous depreciation of the Ghanaian cedi against major currencies; and, fast and significantly dwindling net international reserves.”

Still analysts note that although the government has had little problem in accessing lending, this has come at a cost. Domestic borrowing is expensive, with the 91-day Treasury bill yielding over 20 percent. This reflects high inflation and the tight monetary stance that the BOG has adopted to try to offset inflationary pressures.

External financing is also becoming more expensive. The most recent Eurobond launched in July 2013 for USD 750 million was at a yield of 8 per cent, above those of other recent African issues. The yield had risen to over 9 percent in early March on secondary exchanges, implying that any subsequent issues will be even more costly for the government. Meanwhile, some large bilateral borrowing deals, such as the USD 3 billion deal agreed with China in 2011, have run behind schedule, owing to complications with the projects they were designed to finance.

Lauded not too long ago as the world’s fastest-growing, Ghana’s economy currently faces debt sustainability challenges with the country’s government contracting fresh loans by the day to undertake development projects, but experts fear the high pace

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“External financing conditions will remain extremely tight over the coming months. Foreigners held 21 per cent of domestic debt at end of year-2013, down from 26 percent in 2012. With some recent actions suggesting foreigners’ unwillingness to rollover existing debt, this could see a further outflow of funds adding to pressure on the cedi.

Further stress might arise from Ghanaian banks repaying dollar loans taken out during 2013, and there are potential risks of further dollar outflows if the Bank of Ghana were unable to roll over swap facilities and loans,” Fitch warned.

Doubtless, Ghana presently faces significant macroeconomic challenges: high fiscal and current account deficits; falling private capital inflows (including FDI) as a percentage of GDP; declining foreign direct investment (net); dwindling economic growth (year on year); rising inflation; increased volatility in global financial markets amid a sharp decline in international commodity prices leading to a continuous depreciation of the Ghanaian cedi against major currencies; and, fast and significantly dwindling net international reserves.

So, the challenge for government is to rein in massive graft and corruption that has become the order of the day, cut down costs by trimming the size and number of ministries; and, ensure that borrowed funds are invested wisely to reduce commodity dependency. But the key test will be to invest in infrastructure to generate returns that will enable government to service the debts.

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ECONOMY

oil revenues. Grant disbursements remained low at GHc 79.4 million, against an estimated GHc 393.3 million.

ECONOMY

Subsidies and economy Oppong Baah

Despite claims of unprecedented achievements from its managers, the Ghanaian economy is currently wobbling on its legs like a toddler. In the wake of the economic malaise, subsidies are the new scapegoats. It is something that the economy should remove or decrease. Remove subsidies from the government’s expenditure and all will be well, it has been argued.

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he Centre for Policy Analysis (CEPA) explains subsidy as a “financial contribution” by a government or public body that confers a ‘benefit’ to the recipient.

This financial contribution can be by way of a direct transfer of funds by a government (e.g. grants) or by way of foregone revenue (e.g. tax credits) and is provided on terms that are more favourable than would otherwise have been received under pure market conditions.

Often times, the benefits conferred upon recipient (the consumer or the producer of the product being subsidized) is a price that is either below or above a benchmark or market price. In the case of a consumer subsidy, the price paid by the consumer is below the benchmark price; while in the case of a producer subsidy, the price received is above the benchmark. Where the product being subsidized is traded, the benchmark price is the price of the good. However, where it is mostly non-traded (such as with electricity), the appropriate benchmark price is the cost recovery price for the domestic producer.

Subsidies, ultimately, must be paid by someone. Where government fully incurs the cost of the subsidy, the subsidy will be reflected in the budget as an expenditure item and financed, for example, through higher taxes, increased debt, or higher inflation if the debt is monetized. Often times, however, the

subsidy may be financed by State-Owned Enterprises (SOEs) and reflected in operating losses or lower profits, lower tax payments to government, the accumulation of payment arrears to suppliers, or non-performing loans to creditors.

Some anti-subsidy activists contend that “the benefits to society of that money, if it had been spent otherwise, or left in the pockets of tax payers, might have been greater”. To subsidy supporters, subsidies are defended as benefiting disadvantaged groups, or groups the politicians like to make people believe are disadvantaged.

Some subsidies do exactly that – benefit the poor, but even those that do benefit disadvantaged groups often benefit richer people or companies even more.

The anti-subsidy lobby claims that energy subsidies, for example, can negatively impact on growth for a number of reasons. They can discourage investment in the energy sector, particularly in the case where the cost of the subsidy is borne by the producer. This is because subsidies can result in lower profits or outright losses making it difficult for the producer to expand, and unattractive for private sector investments to come in.

In the specific case of electricity, this results in shortages or load-shedding exercises which slow down economic activity.

Subsidies can crowd out growth-enhancing public spending by diverting resources away from priority areas like public health, education and infrastructural development.

Energy subsidies, to the abolition campaigners, make it difficult for both oil importers and exporters to deal with the volatility of international energy prices. For oil importing countries, changes in international oil prices create volatilities in the balance of payments and complicate budget management.

For oil exporting countries, energy subsidies accentuate macroeconomic volatility by increasing subsidies during periods of international price increases.

“Energy subsidies are often poorly targeted, with the bulk of the benefits accruing to the better off. This reinforces inequity.

The inefficiencies associated with subsidies can thus imply suboptimal social welfare achievements”, naysayers claim.

Joining the ‘ban subsidies’ wagon, IMANI Ghana, on July 7, 2014, said: “In Ghana, most subsidy programmes instituted by the government have the poor as intended beneficiaries.

However, poor targeting has rendered them ineffectual.

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The economists point out that the cessation of the agricultural subsidy programmes in the 80s and 90s led to a reduction in fertilizer usage from 22kg per hectare in 1978 to 8kg per hectare in 2006. The fertilizer subsidies were restored shortly afterwards to mitigate the acute crisis. They also recall that without the government sponsored mass cocoa spraying exercise, the one million tonnes of cocoa production target would have been missed.

Subsidies, be it, in the energy sector, education sector, or agricultural sector, largely benefits the non-poor at the expense of key development projects and programmes”.

The think tank explained that for petrol and diesel (excluding kerosene), the share of subsidies that in effect accrues to the poor is a paltry 2.9 percent. Kerosene is the only petroleum product that is consumed in a substantial way by the poor, that is 20.7 percent of kerosene subsidies reach the poor. Similarly, USD 80 million of the USD 110 million in government subsidies on Liquefied Petroleum Gas intended for rural communities were instead used in urban areas.

According to IMANI, poor targeting also extends to electricity consumption which is among the least targeted subsidies. About 66 percent of the population has access to electricity; however, only 8 percent of the electricity reaches poor households. This is because most rural households are not connected to the national grid. More than 60 percent of the electricity produced is consumed by industries, hence becoming the largest unintended beneficiaries of electricity subsidies.

The think tank holds the opinion that considering the country’s perennial budget constraints, electricity subsidies have enormous opportunity costs, as scarce financial resources can be reallocated to developmental projects with higher pay-offs.

“For a growing economy, investments should be paramount and any spending short of that defies logic and economic principles. Government subsidies consume significant portions of an insufficient revenue pie, inherently limiting the volume of developmental projects than can be undertaken within each budget year”, it says.

To IMANI “subsidies in themselves do not drive economic development. Rather they divert scarce resources away from the factors that drive the growth of the economy. To maintain subsidies, government’s options are limited to borrowing, increasing taxes, or diverting even more resources from key growth areas. In each of these cases it is the ordinary citizens and businesses that bear the brunt of these choices”.

As a way forward IMANI suggests well targeted social programmes which empower the poorest groups to be proactive, to create livelihoods for themselves and create incentives for them to educate their children should be pursued.

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Referring to the huge enrollment figures recorded in the country’s educational institutions, supporters of subsidies argue that this could not have been possible without government interventions through capitation grants, subsidies to senior high schools and technical institutes, Basic Education Certificate Examination fees subsidy, and the school feeding programme.

To them the way forward is to plug the loopholes inherent in the disbursement of subsidies in the various sectors of the economy but not their general scrapping. Subsidy programmes should move from being crowd-pleasers for particular socioeconomic groups to becoming real contributors to the impetus for the improvement of living standards of the grassroot poor.

Organized labour seems to be in league with the pro-subsidy group. Recently, the labour front under the leadership of the Ghana Trades Union Congress, the Industrial and Commercial Workers Union, the Ghana National Association of Teachers, the Ghana Registered Nurses Association, and the Civil and Local Government Staff Association of Ghana, described as insensitive and unsustainable the government’s decision to pass the cost of subsidizing fuel to consumers.

According to them, “it is simply unfair for Ghanaians to be compelled to pay higher fuel prices whenever the government by its policies mismanages the exchange rate”.

The workers noted that given the prevailing economic challenges in the country and the high cost of living, a subsidy regime on petroleum products was necessary to shield the majority of the population who are on fixed incomes or receive no regular incomes from further hardships. To labour unions, the economy is structured in such a way that the impact of those hikes is largely felt in ‘trotro’ fares and services, rendering baseless the assumption that fuel subsidies benefited the rich to the exclusion of the poor.

In 2010, the European Union spent Euro 57 billion on agricultural development, of which Euro 39 billion was spent on direct subsidies. Agricultural subsidies form over 40 percent of the European Union’s budget. Also, the United States currently pays around USD 20 billion per year to farmers in direct subsidies as “farm income stabilization”. Direct payment subsidies are provided without regard to the economic need of the recipients or the financial condition of the farm economy.

The subsidy programmes give farmers extra money for their crops and guarantee a price floor. Mark Malloch Brown, the former head of the United Nations Development Programme, says the West spends USD 360 billion a year on protecting its agriculture with a network of subsidies and tariffs that costs developing countries USD 50 billion in potential lost agricultural exports.

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ECONOMY

On the other hand, pro-subsidy economists say doing away with subsidies in a developing country like Ghana will be likened to throwing away the baby with the bath water. They contend that there is no restriction on the purchase of subsidized fuel outlets.

Every household, both poor and rich, has equal chance to buy subsidized fuel. “Removal of the subsidy imposes negative impacts particularly to poor and medium income households”, they say.

BANKING & FINANCE

Revision of BOG Forex Rules: Impact and Effects

Anthony Sedzro

The Bank of Ghana (BOG) on February 4, 2013 introduced a number of financial guidelines to regulate foreign currency transactions in the country to check the rapid fall of the cedi. The Ghanaian currency had by then depreciated by 17 percent against the major traded currencies.

Some of the rules included customers not being allowed to make withdrawals of more than USD 10,000 from their foreign accounts without proof of travel over the counter, Foreign Currency Account (FCA) and Foreign Exchange Account (FEA) holders only able to withdraw the cedi equivalent of what is in their accounts, foreign currency loans granted in cedis, the threshold for transfers abroad without initially submitting documentation limited to USD 25,000, a 60-day mandatory repatriation of export proceeds, and a digital recording of all transactions by Forex Bureau operators.

In the wake of these measures, many industry associations, interest groups and individuals complained that they were too harsh and anti-business. Four months on, the BOG gave in and reviewed some of the rules.

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These revisions included customers again able to make large transactions over the counter provided they prompted their banks a couple of days before the withdrawal, over the counter cash withdrawals from FCA and FEA permitted up to a limit of USD 1,000 without notification to their banks, the threshold for transfers abroad without initially submitting documentation increased from USD 25,000 to USD 50,000, the 60-day mandatory repatriation of export proceeds completely reversed, exporters of goods and services now allowed to receive payment in foreign currency from non-residents (and by implication, hotels, educational institutions, etc. also able to receive payment from non-residents in foreign currency), and foreign currency loans grantable by resident banks for international trade-related transactions.

Announcing the revisions, the Head of Financial Stability at the BOG, Dr Benjamin Amoah said data analysed over the three month period after introducing the tough measures showed some success on inflation and foreign exchange

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The stand point of the BOG was therefore that the old measures helped to slow down the pace of monthly inflation and also ensured that the amount of foreign currency coming into the country increased considerably in the months that the measures were put in place. In other terms, the macroeconomic picture overall was positive.

At a business forum to examine the impact of the measures, Ecobank Ghana Limited, the biggest bank in the country by asset size, expressed that it certainly was feeling the negative impact of the measures. “We are not the kinds of foreign exchange “Thus the tightening of rules seeing inflows that used to be there because those who have it do not want to let on withdrawing foreign go of it. At the same time, exporters currency from personal are unwilling to repatriate their dollars,” the Chief Finance Officer accounts it is believed, of Ecobank Ghana, Mr Edward discouraged many personal Botchway, said last month.

customers from saving with banks and also caused panic withdrawal of money from bank accounts.”

Welcoming these new measures in an interview with Accra-based Citi FM, the International Monetary Fund (IMF) country representative, Samir Jahjah said the Fund “welcomes the review of the forex regulations with the objective of mitigating any unintended consequences. It may help reduce transaction costs for SMEs and exporters and increase foreign exchange inflows”. That notwithstanding, the admirers of the old measures were few.

Despite its welcoming of the measures, even the IMF was skeptical of the measures’ potential effectiveness when they were first introduced in February. The IMF criticised them then, saying the root causes of the problem were the widening budget and fiscal deficits and structural problems with the economy itself.

The banking penetration rate (the rate by which people use banking services) is low and only about 33 percent of Ghanaians have bank accounts, according to the IMF. Thus the tightening of rules on withdrawing foreign currency from personal accounts it is believed, discouraged many personal customers from saving with banks and also caused panic withdrawal of money from bank accounts. In effect, the old measures created a certain loss of confidence in the banking system. When this is tied in to the introduction of the new tax on financial services by the Ghana Revenue Authority during

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the period, it makes one understand the crisis of confidence that banking has undergone in the past few months.

In an interview with the “Graphic Business” newspaper, the Executive Head of Business Development at Bank of Africa, Mr William Boateng, confirmed the volatilities in forex market supply and said although the measures were well-intentioned, they had produced unintended impacts on businesses and the banking sector.

“The challenges include pricing because with the volatility, it was difficult to stick to one price for a long time,” Mr Boateng said, adding that banks too were losing revenue in forex market trading.

The banking sector was not alone in the complaints.

“We are not saying that the directives are bad per se just that we think there are one or two issues that can be looked at again so that those measures, however good they are, will not damage the operations of the private sector,” Mr James Asare-Adjei, president of the Association of Ghana Industries (AGI), the umbrella body representing businesses in the country voiced out.

The BOG is the body mandated to set monetary policy directions for the country. The falling value of the cedi in the early part of the year called for measures to address it and BOG came in with the old forex rules. The complaints from the banking sector and industry as a whole were that the measures were harsh and will rather lead to a reduction in foreign currency inflows. Indeed at the recent Senchi Consensus, the BOG was tasked to “expedite work on the assessment of the recently announced foreign exchange measures and take speedy and appropriate action to restore confidence and relieve the unintended consequences of the measures”.

The revisions are timely but it is hoped they will be reversed totally as the main problem with the economy is the widening budget deficit and over-reliance on imports, which needs to be addressed.

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BANKING & FINANCE

inflows. He said “there was a decline in inflows in February but this was reversed in March 2014 in line with observed seasonal patterns”. Secondly, the rate of monthly inflation of the cedi reduced. Dr Amoah explained that “monthly depreciation declined steadily from a peak of 7.8 percent in January, to 2.7 percent in May 2014”.

ICT

Quality and the Ghana telecom sector Georgina Adjei

Ghana’s mobile telecommunication industry is seen as one of the most competitive telecom markets in the sub region. The telecommunications industry in Ghana has been on a very progressive journey and it has covered a great distance in a very short period of time. This robust and competitive sector of the economy is however plagued with the constant complaints of poor quality service by subscribers. This has in recent times led the National Communication Authority to penalise mobile service providers.

E

ven though the complaints are nothing new, what has aggravated public anger is the fact that penalties imposed by the National Communications Authority (NCA), do not seem to have any impact on quality of service.

While industry players maintain that challenges confronting the telecom industry, including the breaking of cables by contractors, stealing of cables, frequent power outages and high fees charged by landowners, account for the problems; that excuse does not appear to sit well with mobile phone users.

On the issue of fiber cuts, all the telecommunication companies have suffered one way or the other by

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these activities. Fiber cut generally is an accidental break in an optic fiber; usually due to new construction projects in areas they are laid.

According to the Ghana Chamber of Telecommunications (GCT), the total official count for cable cuts for 2012 alone was 1,605, a number which was more than three times the number of recorded cuts in 2011. Records kept by operators show that 75 percent of the cuts happened during road construction, while the remaining were due to thefts of the copper used for the cables. Some of the cables were said to have been destroyed in the course of illegal mining activities, while others were destroyed by bush fires.

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ICT Another factor accounting for the poor quality of service is cables cut due to construction works.

Telecommunication companies in Ghana last year (2013) experienced a depressing 30 percent increase in cable cuts. Two thousand one hundred and ten (2110) cable cuts were recorded last year compared to 1,605 in 2012 and 480 in 2011. Three-quarters of the cuts occur during road construction, followed by small-scale illegal mining, which is responsible for 10 per cent of cuts. Telecommunication companies have bemoaned the spate of cable cuts, which significantly affect the delivery of services. This led to MTN Ghana initiating legal proceedings against two construction companies – Hisense Son Electronic and Zuleah Esifu – for allegedly damaging its fibre-optic cables, IT Africa reports. Cynthia Lumor, corporate services executive at MTN Ghana, has revealed that Hisense Son Electronic was taken to court for causing damage to fibre cables on the Sakaman-Kasoa road while Zuleah Esifu was sued after its excavators caused severe damage to MTN’s fibre cabling at the construction site of a filling station.

According to Lumor, the fibre cuts compromised the quality of service (QoS) experienced by MTN customers and the company has vowed to step up its efforts to curtail the problem.

Kweku Sakyi-Addo One other factor accounting for the poor quality of service is the recent and frequent power outage being experienced in the country.

The frequent power cuts accounts for the frequent challenges such as drop calls and call set-up time across networks. The Chief Executive of the GTC, Mr. Kweku Sakyi-Addo, cited challenges with electricity as one of the factors affecting the quality of mobile telecommunication services. According to him, “Electricity, which constitutes 50 percent of operators’ operational expenditure, has been inadequate lately.

The lack of electricity and fluctuations when power is available also affect equipment and consequently quality of service. He also said, “The current

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power disruptions are also causing some equipment failure and resultant service disruptions, not to mention the increased expenditure on diesel, which means less funds are available for other critical areas of the business,” he added.

These challenges have led to a lot of consumers calling for stiffer and tougher penalties for service provider.

At least, almost every mobile phone user has gone through the frustration of urgently wanting to make a call only to be hear responses such as “the number does not exist” and “the number you are calling is outside coverage area” have become the refrain of some of the mobile operators. This has many times led to consumers losing valuable time and money and in some situations relationships such as marriages have been affected and threatened to collapse as a result of this poor quality service rendered by the mobile service providers.

“The challenges facing the telecom sector are basically infrastructure. Service quality can only be guaranteed if there is a solid infrastructure base.”

Also many businesses that run on the data services of these mobile phone providers have had to deal with delays in transactions as a result of slow and inconsistent data services provided by the mobile service providers. This often leads to loss in productivity time and revenue to these businesses. According to Mr Sakyi-Addo “Every call drop is lost revenue to the government and the operator and is costly inconvenience to the subscriber,” he acknowledged, but added that after investing nearly USD 6 billion in infrastructure, the last thing any operator wanted was to deny subscribers access to its network in a very competitive industry The telecom sector itself has not been spared from the effects of the provision of poor quality service as this had led to all the telecommunication companies being penalized and fined various sums of money for flouting this regulation. The National Communications Authority (NCA) in 2013 imposed a GHc 1. 2 million fine on five mobile telecommunication companies in Ghana.

The five - MTN, Vodafone, Airtel, Expresso and Tigo - were penalised for rendering poor services to their clients. The punishment of the five telecommunication companies covered the third quarter of last year and formed part of measures by the telecom regulator to sanction poor quality service delivery offered to clients of the telcos and also ensures that consumers have value for money. Airtel suffered the heaviest fine of GHc 350,000.

MTN and Expresso were fined GHc 300,000 each. Vodafone, which also defaulted in its service quality in three regions - Western, Greater Accra and Brong Ahafo regions - was fined GHc 150,000. Tigo received the least fine of GHc 100,000 after having defaulted in the Western and the three northern regions. All the telecom operators in the country also failed to meet the quality of service standards set by the National Communication Authority (NCA), when it last measured their performance in March this year. MTN, Vodafone, Tigo, Airtel and Expresso have all been faulted in the service quality provision test at the end of the first quarter of the year. Consequently, the national telecom regulator imposed a lump sum fine of GHc 250,000 on three of the country’s biggest network operators: MTN, Vodafone and Tigo -- while Airtel and Expresso have had their sanctions suspended pending their expansion activities The country’s biggest network operator MTN following a directive from the National Communications Authority (NCA) had put on hold the sale of new sim cards and halted new subscriber add-ons. According to the NCA, despite numerous engagements with MTN on issues of its quality of service experienced by consumers on its mobile services, the network performance on MTN continues to deteriorate. This not only led to a loss of revenue for the operator but also led to negative reputational effect on subscribers.

The telecom operator had to assure its customers that every effort was being made to urgently address the recent network challenges in service delivery.

The challenges facing the telecom sector are basically infrastructure.

Service quality can only be guaranteed if there is a solid infrastructure base.

Ideally, fibre cuts and cable thefts should not be a problem for the sector.

The operators need to sit up and put in place mechanisms to safeguard their infrastructure. Mobile service providers must make extensive investments in the expansion and upgrade of its telecommunications infrastructure and equipment.

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SPECIAL FEATURE

Ghana’s eurobond addiction:

is there a cure?

By Nana Spio-Garbrah

If you pick up any report of the Africa Rising genre, Ghana features prominently as the holy grail of investment in Africa. Free of Bokom Haram, Al Shabaab, political strife and autocracy and full of natural resource wealth, the country is becoming the darling of the developed world.

So a third Eurobond would definitely capitalize on all the positive sentiment hovering over the country. Yet, when we begin to peel back the onion, it may seem that offshore investors starved for high yields are ignoring certain pundits who are cautiously whispering “mind the gap” (the fiscal gap that it is).

Many, including Nobel laureate in economics Joseph Stiglitz, fear that we may be entering a Eurobond bubble era where fundamentals are secondary to optimism.

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AUGUST 2014

COMPARATORS This latest Eurobond comes exactly one year after Ghana’s second Eurobond which had a coupon yield of 7.875 percent at issuance. Today, the International Monetary Fund (IMF) has noted that spreads on Ghana’s Eurobonds have risen above those of regional peers. With about 9.1 years to maturity, the July 2013 issuance is trading at a spread over the London Interbank Offered Rate (Libor) of 515 basis points (bps).

As a comparator, as of last month a Gabonese 10-year bond issued on December 12, 2013 with a similar number of years to maturity (YTM) is trading at a spread of only 252bps while Nigeria’s Eurobond issued also in July 2013 is trading at a spread of 262bps. This immediately points to the premium that Ghanaian sovereign credit risk is attracting when likened to its African peers, and to the additional costs to the Ghanaian economy of borrowing through bond issues at a time of a weakening economy.

Ghana’s yield of nearly 8 percent compared with around 6.625 percent

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on a USD 400 million bond issue in May 2013 by Rwanda, a state with few resources but a better reputation for public financial management, shows that Ghana will pay top dollar for its inadequate debt management practices.

Luckily for Ghana perhaps, it should be noted that yields on African dollar notes have dropped in general by 74bps this year compared with a 67 basispoint decline overall for emerging markets, according to JPMorgan Chase & Co. indexes. This points to a perception from international investors that African dollar credit is performing better than elsewhere, which would make it a good time for Ghana to issue.

MIND THE GAP Ghana, which began oil exports in 2010 and saw economic growth of 7.1 percent in 2013, paid a premium for its Eurobond issued in July 2013 worth USD 750 million because of worries about its fiscal and current account deficit. These worries have not dissipated in the least and even higher pricing is anticipated for the July 2014 issue. Ratings agency, Standard and Poor’s has given Ghana (along with Zambia and Nigeria) a negative outlook despite the fact that all three countries are currently topping economic growth league tables.

The IMF’s 2014 Article IV Consultation report outlined some critical issues concerning the Ghanaian macro environment, especially over the short-term. According to the institution, “current vulnerabilities put Ghana’s transformation agenda at risk, as rising public debt crowds [out] priority expenditure, putting the nation’s positive medium-term outlook under constraints”. The IMF urged both Ghana and Zambia to rein in their deficits to help deal with any shocks, as developed nations scale back economic stimulus packages that had encouraged

investors to turn to Africa for higher yields in the first place.

The Government of Ghana is taking note, albeit lukewarmly. The Wall Street Journal reported a quote from Ghana’s President John Dramani Mahama as: “We’ve gotten very little sympathy…a lot are saying ‘oh no, Ghana has gone astray.’ But you don’t turn around a deficit in one year.”

“Ghana’s anticipated July 2014 issuance is needed to finance infrastructure projects, although it is not clear which those are, nor is their expected return on investments (ROI) known.”

USE OF PROCEEDS Irrational Exuberance?

In January 2011, Côte d’Ivoire became the first country to default on its sovereign debt since Jamaica in January 2010.

In June 2012, Gabon delayed the coupon payment on its $1 billion bond, pending the outcome of a legal dispute, and was on the verge of a default.

- www.projectsyndicate.org Normally, comfort is gained when the public and particularly investors know the exact projects to which the funding for a bond issue will be applied. Africa does not issue project bonds in the traditional sense but use of proceeds is important.

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SPECIAL FEATURE

The Government of Ghana (GoG) expects to raise USD 1 billion in its third Eurobond issuance, assuming inflation, interest rates and other market factors play along. European banking giants Barclays Plc, Deutsche Bank and Standard Chartered were nominated as the mandated lead arrangers and Dentons, a global law firm, has been appointed as international counsel.

JLD and MB legal consultancy are the local counsels for the deal. With all this expertise at the beck and call of government, one should be relatively assured of a positive outcome for GoG. It remains unclear as to whether potential investors are equally welladvised.

SPECIAL FEATURE Although credit risk exposure is to the sovereign, only high return investments will allow the country to repay in a situation where cocoa or gold prices plummet, especially given that most of Ghana’s oil revenue has already been mortgaged to the Chinese. Dollardenominated earnings projected for Ghana must be significant enough to prevent a drawdown on foreign reserves to honor interest payments for all its Eurobonds until their maturity.

Ghana’s anticipated July 2014 issuance is needed to finance infrastructure projects, although it is not clear which those are, nor is their expected return on investments (ROI) known. More interestingly, the bond revenues are intended also to restructure maturing debts and interest payments which Ghana is already incapable of fulfilling.

The country’s counterpart in East Africa, Kenya, faced similar woes. Kenya’s USD 600 million syndicated loan issued in 2012 to fund infrastructure investment was due to be repaid on 15 May this year. The government had intended to make the repayment using part of the proceeds of a forthcoming debut Eurobond which was stalled and as such, it was forced to negotiate for a tenor extension of 3 months to avoid having to pay out of its foreign reserves.

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Although refinancing is a well-used tool by the debt markets, at some point borrowing to pay off borrowings begs the question of which creditor will be left holding the bag.

“Although refinancing is a well-used tool by the debt markets, at some point borrowing to pay off borrowings begs the question of which creditor will be left holding the bag.”

ALTERNATIVES Eurobonds do not replace sound public debt management practices. Currently, Ghana’s debt sustainability is rated as “moderate” by the Debt Sustainability Assessment (DSA) of the IMF which puts it in a category with the likes of Central African Republic and Niger.

It is not immediately clear why Ghana does not tap out all its concessional facilities with international development agencies such as the IMF, World Bank and African Development Bank prior to going to market yet

GHANA BUSINESS & FINANCE

again. In Joseph Stiglitz’s exposé on what he termed “Africa’s Subprime Borrowers” he summarized that ten African issuers “had collectively raised USD 8.1 billion from their maiden sovereign-bond issues, with an average maturity of 11.2 years and an average coupon rate of 6.2 percent. These countries’ existing foreign debt, by contrast, carried an average interest rate of 1.6 percent with an average maturity of 28.7 years.” Ghana is currently able to obtain public sector loans from the African Development Fund at an interest rate of 1 percent for up to 40 years. Furthermore, a AAA-rated Partial Credit Guarantee (PCG) from the AfDB or International Finance Corporation could have, at a minimum reduced the coupon at which Ghana would have to issue.

In the estimation of Stiglitz, the choice of the Eurobond over highly concessional development bank debt is political: “What politician wouldn’t prefer money that gives him more freedom to do what he likes?

It will be years before any problems become manifest – and, then, some future politician will have to resolve them.” As Ghana enters the period of presidential nominations ahead of the 2016 elections, the need for more cash with limited strings becomes more real, likely to end any attempts at austerity.

One must also ask how much money does Ghana’s government need. In 2012, the China Development Bank agreed to provide USD 3 billion in loans to Ghana, which was almost 10 per cent of Ghana’s GDP at the time. That Chinese money is yet to be disbursed and the expected benefits of those funds seem to have been permanently postponed.

Granted, the government is looking at raising income by other means, for example, though changes in taxation.

Ghana’s national chamber of mines for example has been pressuring government to abandon the increase in corporate tax from 25 percent to 35

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Country Issue date Final Maturity Currency Coupon S&P Years to Asset

Maturity at Issue (%) Rating Maturity Swap today Spread

Amt Issued

MOROCCO 6/27/2007 GHANA 10/4/2007 GHANA 10/4/2007 CONGO (REP) 12/7/2007 GABON 12/12/2007 SEYCHELLES 2/11/2010 SOUTH AFRICA 3/9/2010 IVORY COAST 4/16/2010 EGYPT 4/29/2010 EGYPT 4/29/2010 MOROCCO 10/5/2010 NIGERIA 1/28/2011 SOUTH AFRICA 3/8/2011 SENEGAL 5/13/2011 NAMIBIA 11/3/2011 NAMIBIA 11/3/2011 SOUTH AFRICA 1/17/2012 SOUTH AFRICA 1/17/2012 ANGOLA 8/16/2012 ZAMBIA 9/20/2012 MOROCCO 12/11/2012 MOROCCO 12/11/2012 MOROCCO 12/11/2012 RWANDA 5/2/2013 NIGERIA 7/12/2013 GHANA 8/7/2013 MOZAMBIQUE SOE 9/11/2013 SOUTH AFRICA 9/16/2013 GABON 12/12/2013 ZAMBIA 4/14/2014

500,000,000.00 750,000,000.00 750,000,000.00 477,790,000.00 1,000,000,000.00 168,894,500.00 2,000,000,000.00 2,518,904,000.00 500,000,000.00 1,000,000,000.00 1,000,000,000.00 500,000,000.00 750,000,000.00 500,000,000.00 500,000,000.00 500,000,000.00 1,500,000,000.00 1,500,000,000.00 1,000,000,000.00 750,000,000.00 1,500,000,000.00 1,500,000,000.00 750,000,000.00 400,000,000.00 500,000,000.00 1,000,000,000.00 850,000,000.00 2,000,000,000.00 1,500,000,000.00 1,000,000,000.00

6/27/2017 10/4/2017 10/4/2017 6/30/2029 12/12/2017 1/1/2026 3/9/2020 12/31/2032 4/30/2040 4/29/2020 10/5/2020 1/28/2021 3/8/2041 5/13/2021 11/3/2021 11/3/2021 1/17/2024 1/17/2024 8/16/2019 9/20/2022 12/11/2022 12/11/2022 12/11/2042 5/2/2023 7/12/2023 8/7/2023 9/11/2020 9/16/2025 12/12/2024 4/14/2024

percent and the 10 percent windfall tax which the former feels will kill the sector.

But, there is growing evidence that the Ghanaian private sector is willing to take on many of the investments the government has carved out for itself through for example, Public Private Partnerships (PPPs). According to a recent Ernest and Young report, Foreign Direct Investment (FDI) to Ghana has grown by 48 percent in 2013 over 2012.

Between 2007 and 2013, FDI projects into Ghana increased at a compounded annual growth rate of more than 50 percent — the fastest in Africa. In 2013,

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10 10 10 22 10 16 10 23 30 10 10 10 30 10 10 10 12 0 7 10 10 10 30 10 10 10 7 12 11 10

EUR USD USD USD USD USD USD USD USD USD EUR USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD

5.375 8.5 8.5 3.5 8.2 5 5.5 5.75 6.875 5.75 4.5 6.75 6.25 8.75 5.5 5.5 4.665 5 7 5.375 4.25 4.25 5.5 6.625 6.375 7.875 6.305 5.875 6.375 8.5

BBB- B B N/A BB- N/.A BBB N/A B- B- BBB- BB- BBB B+ NA N/A BBB BBB BB- B+ BBB- BBB- BBB- B BB- B B+ BBB BB- B+

Ghana was the fourth-most attractive FDI destination in Africa, in terms of FDI projects. The country ranks sixth on fDi Intelligence’s “African Countries of the Future 2013/14” list. With such inflows, the government should be able to fund through FDI many infrastructure investments which it wishes to fund through its Eurobond.

Ghana is growing rapidly, but running a serious budget deficit. This should have investors nervous about the country’s ability to repay debts if foreign exchange runs short. Although Ghana was the pioneer along with Seychelles to start the Eurobond trend, its ability to

3.050 3.321 3.321 15.058 3.510 11.565 5.749 18.563 25.892 5.889 6.324 6.639 26.746 6.927 7.403 7.403 9.607 9.607 5.185 8.282 8.507 8.507 28.507 8.895 9.090 9.161 6.259 11.272 10.511 9.848

108 507 508 295 250 525 159 287 339 269 210 265 191 389 188 187 168 168 317 339 164 164 206 350 262 515 421 168 254 439

repay should not be ignored as offshore investors look for ways to prop up their fixed income books.

It is interesting to note that of the 33 Sub-Saharan countries that received either full or partial debt forgiveness as part of the Highly Indebted Poor Countries (HIPC) Initiative, at least 5 of these have or are intending to issue billion dollar Eurobonds, namely – Ghana, Zambia, Rwanda, Ivory Coast, and Senegal. It would seem that the memories of African governments and indeed some of their former creditor countries and institutions are quite short.

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SPECIAL FEATURE

AFRICAN ISSUERS TABLE (SOURCE: Bloomberg / African Development Bank) The table below conveys comparator Eurobond issuances in Africa over the past seven years demonstrating that Ghana’s have been priced consistently higher than other countries despite all the praise it has received as a democratic leader for the continent.

COVER STORY 30

GHANA BUSINESS & FINANCE

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COVER STORY

Leading from the front

MTN’s Serame Taukobong on being No. 1 A cartoon making the rounds on social media makes the point: two modern-looking mobile phones are standing before a dial-face landline telephone of from the 1980s.

The bubble above says one word – grandmother. Perhaps there has been no faster growth in any sphere of Ghanaian society and economy than in telecommunications.

T

he exponential growth in mobile telephone use has changed the way people live, work and play beyond all recognition in the last fifteen years. The rise of mobile telephony over fixed lines is dramatic. According to information in the public domain, as of 2012 there were 285,000 fixed telephone lines in use, which placed Ghana at number 120 in the world fixed line league, but with 25.6 million mobile cellular lines Ghana is at number 42 in mobile phone use.

Today, the use of mobile telephony which has been described as a technology miracle is not just a service; it is considered a right by consumers; and not just that. While data penetration lags behind voice by some distance, many consumers insist on access to their emails on the go. At the very least, they want to be able to send and receive messages text and multimedia - wherever they are. For a growing number, voice and data services are their preferred ways communication in country and across borders.

Luckily for Ghanaian consumers, the country’s six mobile telecom companies are almost as impatient to deliver these services as consumers are to enjoy them.

In the fiercely competitive arena that is in the Ghanaian telecom sector, no operator can afford to be left behind.

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The result is a plethora of services and offers at the disposal of consumers who, consistent complaints about quality of service aside, are quite spoilt for choice.

Among the operators in the field, it can be argued that none has done more to expand the reach and scope of mobile telephony in the country than MTN, the African giant that was established in 1994 in South Africa and led in the pioneering of GSM technology in Ghana when it acquired Scancom Ltd in 2006.

Of course, Scancom Ltd did not start trading as MTN; it was Spacefon and then became Areeba before finally being taken over by MTN. Scancom’s mobile giant has led the market and achieved milestones that its competitors can only dream of. With over thirteen million of Ghana’s twenty-eight million users, more than double its nearest competitor, MTN’s leadership is not in doubt. The question is, can it continue to hold the fort?

This is the question that must now be posed to the person whose responsibility it is to answer it. How does one motivate a company that seems to be leading in everything? To answer this question: enter Serame Taukobong, MTN Ghana’s Chief Executive Officer appointed barely a year ago. He says he finds the role “exciting”. Coming to the role from his position as Chief Marketing Officer for

the company’s South African arm, he says he was inspired by the record of his predecessors and felt the need to excel and add on to the successes they had chalked.

“Ghana is number four within the MTN Group (out of 22 countries) and represents a new challenge with its different demographics. With six operators, the voice market is quite saturated and our challenge is to find key areas that differentiate us from our competitors and enable us to maintain our leadership position.”

A year on, Mr Taukobong has found that the market really is as tough as it looks, and not just because of the competition. Coming in at a difficult time for the Ghanaian economy, he has found that the cedi’s woes have had a very real effect on operating expenses.

It is not all bad news. The company has continued to grow. At the last reckoning, it posted an increase of 177,274, leaving it with some 13,304,158 subscribers. It continues to provide leadership in the market, accounting for some 500, 000 jobs - both primary and secondary - through its value chain. The telecommunications sector as a whole keeps some 1, 500, 000 jobs directly and indirectly, aside from being one of the key revenue generators for the government.

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COVER STORY

In 2013, MTN contributed an amount of GHS 433,210,640.90 in taxes to the Ghanaian economy. The economy as a whole also benefits from the efficiencies that are gained from the use of technology provided by MTN and its competitors. And that’s before numerous Corporate Social Responsibility initiatives that MTN, in particular, pays great attention to.

Despite these, there is little love lost between consumers and the providers who deliver the services they have come to rely on. The Ghanaian consumer demands almost perfect service; complaints about bad service are as regular as the nation’s favourite Sunday lunch of omo tuo and palm nut soup. Recently, the National Communications Authority has had to come down hard on some operators, responding to pressure from consumers and consumer groups.

Mr Taukobong says MTN is very mindful of this: “MTN has consistently adopted a strategic and systematic approach to expanding and updating the network in order to provide reliable services that are relevant to the lives of our subscribers. Starting with fewer than 900 2G sites when MTN began operations in Ghana, MTN now has over 2275 2G sites and 1090 3G sites as well as over 4000 Km of fibre. These investments are to empower customers to do more with voice and data; to use today’s devices to improve efficiencies, to stay in touch and to expand business opportunities. Our investments are also to support the innovations we develop so we are ready for what customers request tomorrow. ” Total investments from 2006 till date are about 1.69 billion Ghana cedis.

Minister of Communications, Dr. Omane Boamah welcomes Serame Taukobong to Ghana MTN has the widest 2G coverage across the length and breadth of Ghana and the widest 3G coverage in 170 districts across the country. The company has also built three modern Switch and Data centers to deliver stable, reliable, efficient and robust Telecom and Data Services to customers. An amount of GHc 311 million has been committed to network improvement in 2014.

The story is not all that rosy, however.

“Fibre cuts continue to be one of the major issues that impact on our business and we continue to find ways of dealing with it. The fibre optic technology

“Serving is the new selling. Price is not a differentiator; service is critical.”

forms a very important part of the transmission network of every modern provider, like MTN. The existence and maintenance of the fibre network is a key factor in the ability of MTN to continue providing quality service to all customers - individual and corporate.

However, incessant cuts in fiber have been impacting the network negatively despite massive efforts to minimize the incidence of such cuts. In 2013, we had 840 such cuts and we have already experienced 436, as at mid-year, 2014.”

MTN has taken a hard stance of this and is liaising with relevant security agencies to bring this to a halt. Issues with permits, power outages, and fuel and energy costs also pose challenges to the sector.

Challenges notwithstanding, MTN says it is poised to continue growing, buoyed by opportunities in data and value added services. Further, the company is looking at the enterprise market, hoping that it can attract and grow small and medium sized companies with tailor-made packages.

“Most importantly,” Mr. Taukobong says, “developing a stronger customer service perspective will be key to the next stage of our operations. Serving is the new selling. Price is not a differentiator; service is critical. We are trying to become the beacon of customer service not just within our industry but within Ghana as a whole.”

This is already becoming a reality; the company recently won an award in Customer Service.

A tutor at NVTI takes Serame through cutting of flexi material during MTN’s 21 Day’s of Y’ello Care

32

GHANA BUSINESS & FINANCE

The company will also continue focusing on the building of physical infrastructure that will support its growth agenda.

AUGUST 2014

“It will be in multimedia, financial services, banking, content generation, providing software and services and professional services to corporates.”

All of which speaks to a company that is still hungry and ambitious. With such a commanding lead, MTN could almost be forgiven if it chose to merely

keep what it has. Not that it would have been much of an option. Fierce competition in the Ghanaian telecom market means that even leaders must stay in motion, just to be in play.

Even allowing for that, MTN’s drive is admirable. Evidenced by what could only be a renewal of its purpose in the country’s ICT space.

“Our mission is to lead the delivery of a bold, new Digital World to our customers. This is informed by the evolution of new information and communication channels that use digital platforms. We want to expand our presence in the digital space to ensure that our customers access a variety of content and information.

This will help us deliver on our mission, which is to make our customers’ lives a whole lot brighter through the implementation of our strategy. It will be in multimedia, financial services, banking, content generation, providing software and services and professional services to corporates. We need to lay the foundation for that transformed digital organisation so the key thing for us is what we have to do now to get us ready for tomorrow.”

Given MTN’s history, there is little justification for cynicism about the reach of its ambition. This is a company that has shown that it has the intuition to make the right bets and the stomach for the big fights. Under its new captain, the MTN ship seems to be moving at a solid and stable pace ahead of its competitors whilst looking for every opportunity to innovate to meet the changing demands of its customers.

AUGUST 2014

GHANA BUSINESS & FINANCE

33

COVER STORY

“We tend to take a bit of a long-term view relative to our competitors. The crucial thing for us is building the network to be ready for an IP-type environment.

The biggest focus last year and this year has been modernizing our data network and getting it to be IP-ready. We are going to need significant capacity to service the SMEs, which is why we continue building our metro fibre rings which is key for us to get that backhaul and get that speed.

We need to have the full ecosystems so we’ve had to self-provide in urban areas.

For us it’s really about seeing how we can be future-looking.”

ADVERTORIAL

ASN Investments belongs to a family of experienced and successful companies from which it benefits synergy-wise. The experience and drive of ASN Investments has given it the opportunity to deal in investments with optimum returns. We deal in a diverse investment instruments for both short and long term horizons, while delivering exceptional quality services to our clients. We offer quick response time and very current information on prospective investment opportunities in the country.

ASN INVESTMENTS LIMITED, a wholly owned subsidiary of ASN Holdings Limited, is a Licensed Investment Advisor set up to provide funds management and investment advisory services.

Our clients include individuals, private and public companies, Small, medium scaled and large companies, collective groups, foundations and non-governmental organizations, local administrative bodies such as municipal authorities and district assemblies, governments and governmental bodies.

Key ASN Funds Management services include the following: Provident & Pension Funds management: We offer sturdy expertise and professional approach in managing clients funds, for competitive growth to serve as an income source during retirement.

End of Service Benefits: We offer efficient maTnagement of end of service funds and make lump sum or periodic payments to clients, upon retirement or end of service.

• Enjoy our tailor-made investment products and first class customer service.

• A strong number of outlets and agencies in Ghana.

• We leverage on the expertise, spread and depth of sister companies in the ASN family, for the benefits of the client.

ASN Investments activities are underpinned by a strong research, which covers various asset classes, markets and economies. We employ both fundamental and technical analysis, based on which we plan and make strong asset allocations, which we monitor continually and re-balance, in line with investment policies and market dynamics. We complement this with our exceptional customer services to deliver superior investment services to our clients.

CORPORATE FINANCE We actively engage in a wide array of specialized financial transactions, aimed at maximizing the value, enhancing the structure and competitiveness of our clients. We work with institutions in various stages of their growth cycle, different economies and across diverse sectors such as financial, mining, real estate, agro-processing, exports and imports and general trade.

KEY CORPORATE FINANCE SERVICES • Private placements • Business Valuation • Debt and Equity Acquisitions • Mergers and Acquisition Advisory • Project Financing • Asset securitization • Corporate Restructuring and Capital structure analysis ASN Investments is your best investment partner, having been licensed as a Fund Manager and Investment Advisor by the Securities and Exchange Commission, we currently manage funds worth millions of Ghana Cedis in private client services. We identify strong yielding instruments, while considering your risk profile and invest your money so you can sleep soundly.

Private Wealth Management: We offer portfolio management services to high-net worth individuals, families, foundations, endowment funds and groups, by developing their wealth plans and employing strong investment strategies and models to meet their objectives.

Why ASN Investments Limited • A team of experienced and competent professionals, with solid track record in investment banking and investment management.

34

GHANA BUSINESS & FINANCE

AUGUST 2014

CONFERENCES & EVENTS

Conferences & Events

2014 Global Development Finance Conference

3rd Annual Islamic Banking Summit Africa (IBSA 2014)

8th Bi-Annual Microfinance Conference

02.09.2014 - 03.09.2014 Dubai, United Arab Emirates Measuring and Optimising Financial Systems in Emerging Markets

04.11.2014 - 05.11.2014 Djibouti, Djibouti Capturing the Africa Opportunity

22.10.2014 - 24.10.2014 Hawassa, Ethiopia Inclusive Finance for Expanding Opportunities to the Financially Excluded Population

Housing Finance Course for Sub-Saharan Africa (HFCSSA) SAVCA Venture Capital Foundation Training Course

05.10.2014 - 11.10.2014 Cape Town, South Africa Training

08.09.2014 - 09.09.2014 Johannesburg, South Africa Training

Sanabel 2014 Conference 29.09.2014 - 30.09.2014 Dubai, United Arab Emirates Microfinance at Crossroads: Current Developments and Future Prospects in the Arab States

AUGUST 2014

Insure Africa

IFN Forum Africa 2014 04.11.2014 Abuja, Nigeria Developments and Investment Opportunities in Islamic Finance in Key African Markets

10.09.2014 - 11.09.2014 Nairobi, Kenya Effective management strategies and systems for a new era of expansion and inclusion

GHANA BUSINESS & FINANCE

37

ADVERTORIAL

e Sea of Galilee

Fr Lazarus, Mass on th

Group of Parliamentarians and Friends in Jerusalem

MPs share experiences on pilgrimage to Rome, Israel When Christians read the Bible, they may believe the many intriguing biblical stories only by faith. The reality of those stories is far remote from their world. Sometimes, it takes a hard and thorough conceptualisation of abstract things to create a mental picture of the biblical stories some of which seem too wild to believe.

These were the same impressions carried by some Ghanaian Members of Parliament (MPs) until they visited Israel in April this year to reconcile abstract with reality.

The pilgrimage afforded the MPs lifetime personal experiences of tracing the footsteps of Jesus Christ in the many towns he walked, renewing baptism in River Jordan in which Jesus Christ was baptised, worshiping in some of the famous religious sanctuaries in the world and returning home spirituallyfulfilled.

The MPs are full of praise for One People Travels which organised the pilgrimage, in collaboration with the Catholic Secretariat, as they share their wonderful experiences from that spiritual journey.

“The whole experience was just fantastic because it brought the bible alive; some of the things you had read about were brought to life,” the MP for Subin, Mr Isaac Osei, says.

For his part, the MP for Sene East, Mr Dominic Napare, says: “Words cannot describe the things we saw and our mood; I was personally transformed in both spiritual and physical life”.

“It actually enhanced our spiritual growth because some of the things we read and which were very abstract were made manifest to us,” he adds.

38

Fr. Lazarus Anondee, the acting Executive Secretary for Strategic Investment at the Catholic Secretariat in Accra, who accompanied the MPs, says: “The pilgrimage was really a very wonderful one; we had a great experience. The arrangement by One People Travels was very excellent”.

“It made real what I had read from the scriptures and heard about the Holy Land, and what even I preach. So now, when I am reading the scriptures and I come across the names, they become very real to me,” he adds.

Places visited

The Ghanaian MPs, led by the MP for Zebilla, Mr Cletus Avoka and Mr Isaac Osei, visited many places in Israel, including the Church of Nativity where three of them renewed their marriage vows with their spouses.

Mr Osei, who was one of those three MPs, describes the ceremony as “a unique spiritual experience”. The MPs also visited the Mount of Temptation, a hill in the Judean Desert where Jesus Christ was tempted by the devil, as recounted in Matthew 4:8. A visit to the famous biblical town of Nazareth, where Jesus Christ hailed from, was also very refreshing to the MPs.

GHANA BUSINESS & FINANCE

AUGUST 2014

Hon Dominic Napare, baptismal renewal in the Jordan River

ADVERTORIAL

One of the most familiar and significant biblical stories is the baptism of Jesus Christ in River Jordan by John The Baptist, and as Christians, the MPs never imagined they would ever have an opportunity to see the river. But they experienced more than just seeing River Jordan; they were immersed in the river in renewal of their baptism and emerged very refreshed spiritually.

The Walls of Jerusalem The pilgrims also visited a church near Rome where Catholics believe Jesus Christ revealed himself to Peter as he (Peter) fled the city, but after which encounter Peter went back to Rome and was subsequently crucified. “We saw a lot of things and we also visited the Roman Empire,”. Mr Osei recollects.

Fond memories of the pilgrimage are still lingering in the mind of Mr Napare. “It was a religious mood because everywhere we went we joined the churches for fellowship. The people were very nice. I really enjoyed the trip,” he points out.

Call to visit

Having Mass on the Sea of Galilee on which Jesus Christ walked was also a very memorable experience for the MPs, and Mr Osei recalls how Fr. Lazarus had urged them (MPs) to exercise their faith by taking a walk on the sea just as Jesus Christ did. “We asked him to do it first because he is a Father who shepherds us all,” he says amid laughter.

Mr Napare says after experiencing the biblical stories physically and practically on the ground, “I now appreciate them more; now we can understand things better when we go to church and a pastor quotes portions of the bible to you”.

Visit to Knesset & security issues

As parliamentarians, a visit to the Israeli Parliament, the Knesset, was a matter of course, and that gave them the opportunity to interact with some Israeli MPs to understand their parliamentary system and other relevant issues.

They also had a good understanding of the Israel-Palestine conflict, which they consider to be something far remote from what they had imagined. “We visited Israel without any difficulty and so the present conflict is a bit surprise to us,” Mr Osei remarks.

Mr Napare shares a similar opinion, saying the renewed conflict in the Middle East is very surprising because “when we went there, nothing showed that there was any conflict; it was even difficult to differentiate between Israelis and Palestinians.

Visit to Rome

The Vatican is the spiritual headquarters of the Catholic community in the world, and so as Catholics, visiting Rome as part of the pilgrimage was spiritually fulfilling for the MPs. They were given a special presidential escort to enter the St Peter’s Basilica and even through the Pope’s gate to attend the canonisation of Pope John XXIII and Pope John Paul II. It was even a rare spiritual uplifting for Mr Avoka and Mr Osei who were invited to sit on the dais with Pope Francis and other top dignitaries of the church who attended the ceremony. “I and Mr Avoka had an opportunity to greet the pope (Francis),” Mr Osei recalls with a sense of pride. For Mr Napare, “it was a very wonderful and fantastic experience coming face-to-face with the pope”.

AUGUST 2014

Given the wonderful experiences they had on the pilgrimage, the MPs are urging all Christians to endeavour to visit Israel to also have similar experiences. “One might call it a journey of faith; I recommend it to as many Christians as possible,”.

Mr Osei states. “I wish every Christian participates in the pilgrimage because you will really appreciate things very well; it will really humble you.

“I wish that even our Catholic priests are sent there for one or two weeks as part of their training to enable them to appreciate things practically,” Mr Napare suggests. He adds: “I wish every Christian in Ghana goes there and when we come back, it will humble us in the things we do”.

According to Fr. Lazarus, who is also the Co-ordinator of the National Catholic Centre, the pilgrimage was very spirituallyrewarding. “It’s worth being experienced by every priest; if it is possible, every priest should undertake such a pilgrimage because it helps to appreciate the scripture. With my experience and the experiences of others, we’ll come back not being the same,” he submits. He urged every Catholic to endeavour to undertake a pilgrimage to Israel, adding, “We are planning more of such trips for Catholics”.

While acknowledging that such endeavour requires some considerable financial investment, Fr. Lazarus says undertaking a pilgrimage to Israel is a great treasure. He says like the scriptural story in which a man found a treasure and went to sell all he had to acquire the treasure, “if we really treasure our relationship with God above everything else, we should try and make a pilgrimage to Israel”.

“I will urge that apart from priests, every Catholic should go on the pilgrimage because it’s very spiritually-rewarding. If you go to visit those places, I know that your life will never be the same”, he adds.

Join our next departure dates.

Become a Jerusalem Pilgrim(JP) 26 September to 4 October 24 Ocotber to 1 November 12 to 20 December One People Travels No. 17 Manyo Plange Street Adabraka, Accra email: info@onepeopletravels.com Telephone: 030 298 3401 or 0244 645772

GHANA BUSINESS & FINANCE

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AUGUST 2014

implementation of the overall organization’s strategy; leading, guiding, directing, and evaluating the work of other executive leaders including presidents, vice presidents, and directors, depending on the organization’s reporting structure; formulating and implementing the strategic plan that guides the direction of the business or organization; Maintaining awareness of both the external and internal competitive landscape, opportunities for expansion, customers, markets, new industry developments and standards; and representing the organization in civic and professional associations and activities in the local community and at the national level.

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Engineering Technical Leader - Gas Turbine The position This position will involve building, training, and leading the Power Generation Services Application Engineering team in SSA. The Technical Leader will partner with region commercial and operations staff in support of customers, assist in customer discovery sessions with sales staff, and lead the AEs in developing and supporting proposals and tools related gas turbine technology/systems (e.g. gas and liquid fuel systems, inlet systems, exhaust systems, other auxiliary systems, etc.).

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The candidate Applicants must have a Bachelor of Science degree in Mechanical, Aerospace, or Electrical engineering; a minimum of 10 years of engineering experience with at least two in positions of leadership.

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GHANA BUSINESS & FINANCE

41

EXECUTIVE SELECTION

Executive Selection

OUTLOOK

DaMina: Long-term outperformance trajectories of continent’s Top 30 Companies still intact despite weak 2014 performance In their latest report, research firm, DaMina Advisors, have said that the top thirty firms in Africa have maintained their trajectory of performance, despite an overall weak performance posted by economies in the region. Below are excerpts from the report.

T

he divergence between frontier African equity markets and the S&P 500 is low at 5%. Frontier African markets (ex-South Africa) are up 1.8% in US$ as of June 30 vs the S&P 500 up 7% and global emerging markets index up by 6.3%. However, the long-term trend is clear, Frontier Africa has outperformed MSCI Developed Markets, MSCI Far East and MSCI Eastern Europe, South Africa and Shanghai markets. While the African markets have bucked the current global bullish trend, the long-term structural trajectory of the major listed companies is clearly upwards. An analysis of the top 30 frontier African listed corporates shows high levels of profitability and the opportunities for deep value investors.

With all the AfricanFRONTIER continent’sMARKETS three largest economies beset SPECIALISTS by major international socio-economic and political issues, it

is no wonder that the continent’s equity markets have bucked the recent bullish global equity upswing. 2012-13 were stellar years for frontier African markets, but 2014 has so far been lacklustre. Regarding 2014, South Africa is up 8.4% in part on account of the recovery of the Rand since the February lows.

SSA ex-SA as a region has risen 1.8% year to date. Despite the worldwide EM and FM sell-off in January and latterly events in other EM and FM markets, eg Ukraine, Iraq, Thailand and, in SSA ex SA, terrorist bombs in Kenya and Nigeria, SSA ex SA stock markets have shown resilience with Kenya up 8%.

The Nigerian market has been recovering its poise now up 1% year to date since the chaotic events regarding the ouster of the former Central Bank governor, Lamido Sanusi, unsettled the market.

JULYAfrica 24, 2014 Despite this year’s lacklustre performance, Frontier equity returns have historically exceeded South Africa, MSCI Eastern Europe, MSCI Far East and the Shanghai Composite.

DaMina�Advisors Frontier Capital Markets Report: Long-term outperformance trajectories of 17 of Top 30 companiesAfrica have ROE above 25%; Further volatility has been lower in almost all years (graph not continent’s 3030 Companies still intact weak 2014shown). performance � 7Top of Top companies have historicdespite P/E As the right hand graph shows, SSA ex SA has out below 10.0; performed both the MSCI Developed Markets and the MSCI

By Christopher Hartland-Peel, Frontier markets. � 6 of Top 30 companies haveSenior a dividend yield

Director, DaMina Frontier Africa Equity Research

above 5%; 5 of Top 30 companies haveof price/ (Former Head Africa Equity Research, Standard Bank, London) ROE’s generally exceed the cost of capital and inflation, with book value below 1.5times The divergence between frontier African equity markets and the S&P 500 isROE’s low at 5%. Frontier African higher rewarded with higher capitalmarkets markets (ex-South valuations. � Frontier African markets rose 2.2% in June Africa) are upand 1.8% in US$ as of June 30 vs the S&P 500 up 7% and global emerging markets index up by 6.3%.

However, Among Frontier Africa financial services firms, high ROE’sthe are up 1.8% year to date in US dollar terms. handsomely rewarded byFar theEast markets, as investors detect strong long-term � trend is clear, Frontier Africa has outperformed MSCI Developed Markets, MSCI and MSCI Eastern Europe, Kenya is up 8.4%, Tanzania up 19.7%, between ROE and price-to-book financial South Africa and Shanghai markets. While the African markets have correlation bucked the current global bullish trend,value the of long-term Nigeria up 1.0%; Zimbabwe down 7.7%, sectorAn equities.

However from theAfrican trend line has structural trajectory of the major listed companies is clearly upwards. analysis of thedivergence top 30 frontier listed Ghana down 21.3%. widened over the past few months, particularly with Nigerian corporates shows high levels of profitability and the opportunities for deep value investors. � Currency movements YTD were only positive banks, with several entities trading below trend. o 17 of 30 companies have ROE above 7 of Top 30 companies have historic P/E below 10.0; Top in Malawi; The Ghanaian and 25%; Zambian

o 6 of Top 30 companies have a29% dividend above 5%; 5 of Top 30 companies havebanks, price/book 1.5times companies among currencies are down andyield 12% respectively.

As with the value majorbelow non-financial o Frontier African markets rose 2.2% in June and up 1.8% year to date in US dollar terms. the top 30 companies also have correlations between high � Nigeria and Kenya’s currencies are both down o Kenya is up 8.4%, Tanzania up 19.7%, Nigeria up 1.0%; Zimbabwe down 7.7%, Ghana downprice 21.3%.

ROE’s and high valuations. Among these companies, no 2% as of June 30 o o

Currency movements YTD were only positive in Malawi; The Ghanaian and Zambiansectors currencies down 29% and 12% respectively. particular haveare predominance.

Nigeria and Kenya’s currencies are both down 2% as of June 30.

SUB-SAHARA AFRICA - STOCK MARKETS: JULY 2014 Jul-14 South Africa Nigeria Kenya BRVM Cote d'Ivoire Mauritius Zimbabwe Botswana Tanzania Zambia Ghana Namibia Malawi Uganda Rwanda Cameroon Seychelles Sub-Sahara ex SA Sub-Sahara Africa

--- Market cap ---US$ bn %

P/E P/E ---- Dividend ---Historic Forecast yield cover

Price/ book

1,011.3

87.1%

16.5

14.0

3.2%

1.89

4.50

83.0 23.5 9.7 6.1 5.4 5.0 4.5 3.9 3.3 1.6 1.5 1.1 1.0 0.3 0.1 150.1

7.1% 2.0% 0.8% 0.5% 0.5% 0.4% 0.4% 0.3% 0.3% 0.1% 0.1% 0.1% 0.1% 0.0% 0.0% 12.9%

20.8 17.1 16.7 12.2 12.3 14.1 14.2 17.9 26.4 13.2 10.4 13.9 25.2 15.6 10.3 18.7

16.0 14.0 13.0 11.5 12.0 11.0 9.0 15.0 20.0 12.0 8.0 12.5 18.0 11.0 7.0 14.7

3.4% 3.0% 6.4% 2.4% 2.0% 3.9% 3.9% 5.0% 2.7% 3.7% 3.5% 4.4% 2.3% 3.1% 6.9% 3.5%

2.37 2.63 1.14 2.78 3.55 2.46 2.14 1.58 3.03 5.59 3.47 2.14 2.00 7.80 1.41 2.43

7.05 4.25 4.14 1.75 2.98 3.86 4.82 4.90 8.61 2.80 4.16 4.15 10.19 4.49 1.29 5.78

100.0%

16.8

14.1

3.2%

1.96

4.67

$1,161.4

----------------------- US$ returns --------------------------------------------------------------------------2014 Month 2013 2012 2011 2010 2009 2008 2007 8.4%

2.1%

(4.5%)

16.8%

1.0% 8.4% 2.2% (1.0%) (7.7%) 0.6% 19.7% 2.7% (21.3%) 4.3% 16.4% 1.1% 4.6% 2.3% 17.2% 1.8%

2.3% 0.1% 3.8% 0.8% 6.7% 0.3% 11.5% 10.2% (7.5%) 0.5% 1.6% (7.6%) 3.8% 3.9% 3.0% 2.2%

43.7% 43.7% 45.6% 23.0% 32.6% 7.0% 98.4% 31.6% 44.0% (2.8%) 62.2% 37.1% 17.1% 24.6% (3.6%) 41.0%

40.8% 34.8% 21.8% (11.9%) 4.5% 3.4% 25.1% (11.9%) 6.6% 15.8% (45.5%) 1.2% 52.4% 11.4% n.a.

26.2%

P/E < 10.0 times, Dividend yield > 5%, Price/book < 1.5 times

42

GHANA BUSINESS & FINANCE EUROPE AFRICA AMERICAS ASIA 3 Abercorn Mansions 10 Abokobi Road 55 Fifth Ave, Level 11, 535 Bourke Street

(18.4%)

29.2%

61.5%

(45.1%)

19.9%

(21.6%) 17.0% (38.1%) (54.2%) 90.9% (32.6%) 28.3% 2.9% (41.4%) 5.2% (15.5%) 12.7% (23.5%) (15.1%) 96.1% (1.4%) 19.2% 46.9% (43.4%) 35.7% (3.6%) (0.5%) 52.0% n.m.

58.8% (6.1%) (8.6%) 16.7% (33.3%) 77.6% 20.2% (14.4%) (6.1%) 24.5% 22.4% 17.5% 14.9% 15.2% (42.9%) 119.6% (12.1%) 27.4% (52.7%) 20.7% 25.7% 4.9% 24.2% 23.0% (12.3%) 46.4% (0.5%) (7.1%) (18.2%) 25.7% 111.9% (34.4%) 23.3% (0.4%) (26.0%) 165.3% 113.6% n.a. n.a. n.a. n.a.

12.7% (1.6%) (9.9%) 44.8% 41.3% n.a. n.a. n.a. n.a. n.a.

(17.6%) 15.1% (20.9%) (46.9%) 69.1%

> 20% US$ return in year

1|P a g e

AUGUST 2014

SUB-SAHARA AFRICA ex SA - TOP 30 COMPANIES (Ranked by sector market capitalisation)

NIGERIA

Dangote Cement Nigerian Breweries Nestlé Nigeria Guaranty Trust Bank Zenith Bank First Bank of Nigeria Seplat Petroleum Lafarge WAPCO Guinness Nigeria ETI Stanbic IBTC Bank United Bank for Africa Forte Oil Access Bank Unilever Nigeria Flour Mills Nigeria Union Bank Nigeria Companies

17 KENYA

Safaricom East African Breweries Equity Bank KCB Bank Standard Chartered Kenya Barclays Bank Kenya Companies

6

BRVM - COTE D'IVOIRE SONATEL 1 Company TANZANIA

Tanzania Breweries Nat Microfinance Bank Companies

2 ZIMBABWE

Delta Corporation Econet Wireless Companies

2 MAURITIUS

MCB Company

1 BOTSWANA 1 30

FNB Botswana Company

30-Jun-14

Market capitalisation P/E US$ % of Trailing millions total 12 months

Price to book value

ROE last 12 months

1.69 1.27 1.17 1.79 1.72 1.95 11.41 2.85 0.77 n.a.

18.61 2.84 1.08 2.63 1.02 1.84 n.a.

2.30

7.50 11.58 22.46 2.60 1.56 1.09 3.19 3.58 6.41 0.91 2.76 1.09 17.09 0.90 21.19 2.25 0.88 7.52

37.0% 38.3% 54.8% 27.4% 18.7% 15.0% 62.6% 30.4% 17.2% 4.9% 19.7% 20.2% 35.7% 14.9% 50.1% 8.5% 2.8% 33.0%

3.8% 1.9% 3.3% 3.9% 4.7% 4.2% 3.5%

1.22 1.65 2.39 2.43 2.03 2.00 1.73

5.46 8.74 3.30 2.35 2.86 2.80 4.98

25.2% 28.0% 25.8% 22.4% 27.2% 23.5% 25.5%

13.1 13.1

7.0% 7.0%

1.09 1.09

3.97 3.97

30.4% 30.4%

1.8% 1.3% 3.0%

16.4 15.1 15.9

3.1% 2.3% 2.7%

1.97 2.94 2.37

6.00 4.23 5.27

36.6% 28.1% 33.1%

1,593 1,099 $2,692

1.7% 1.1% 2.8%

15.1 8.8 12.5

2.7% 1.9% 2.4%

2.41 5.91 3.84

3.92 1.83 3.07

26.0% 20.9% 23.9%

1,782 $1,782

1.9% 1.9%

11.9 11.9

2.8% 2.8%

2.97 2.97

1.81 1.81

15.2% 15.2%

L/C Share price

Issued shares million

240.00 172.00 1,150.00 28.95 25.05 15.60 700.00 111.00 200.00 16.89 26.00 7.70 206.30 9.55 54.00 78.00 9.97

17,041 7,563 793 29,431 31,395 32,634 543 3,002 1,475 17,029 10,000 32,335 1,080 22,888 3,783 2,335 16,936

25,113 7,987 5,598 5,232 4,829 3,126 2,335 2,046 1,811 1,766 1,597 1,529 1,369 1,342 1,255 1,118 1,037 $69,090

26.1% 8.3% 5.8% 5.4% 5.0% 3.3% 2.4% 2.1% 1.9% 1.8% 1.7% 1.6% 1.4% 1.4% 1.3% 1.2% 1.1% 71.9%

20.3 30.2 41.0 9.5 8.3 7.3 3.8 11.8 37.2 18.5 14.0 5.4 47.8 6.1 42.3 26.4 30.9 20.9

2.9% 2.6% 2.1% 5.9% 7.0% 7.1% 2.3% 3.0% 3.5% 0.0% 0.4% 6.5% 1.9% 6.3% 2.3% 2.1% 0.0% 3.4%

12.45 283.00 46.00 51.00 309.00 16.70

40,000 791 3,703 2,950 309 5,432

5,683 2,554 1,944 1,717 1,090 1,035 $14,023

5.9% 2.7% 2.0% 1.8% 1.1% 1.1% 14.6%

21.6 31.2 12.8 10.5 10.5 11.9 19.2

21,995

100

4,590 $4,590

4.8% 4.8%

9,700 3,990

295 500

1,725 1,203 $2,929

1.29 0.67

1,235 1,640

215.00

250

3.48

2,564

Top companies

OUTLOOK

FRONTIER MARKETS SPECIALISTS

--- Dividend -yield cover

1,014 $1,014

1.1% 1.1%

12.4 12.4

4.3% 4.3%

1.87 1.87

4.63 4.63

37.3% 37.3%

$96,121

100.0%

19.6

3.6%

2.22

6.65

31.2%

= P/E <10.0, Dividend yield > 5.0%, Price/Book < 1.50

FRONTIER MARKETS SPECIALISTS

2|P a g e

AFRICAN STOCK MARKETS US$ RETURNS: YTD JUNE 2014

25%

19.7%

20%

17.2%

16.4%

15% 10%

8.4%

5%

8.4% 1.0%

0%

2.2%

4.6%

4.3%

2.7%

0.6%

1.1%

2.3%

1.8%

(1.0%)

-5% -10%

(7.7%)

-15% -20% (21.3%)

-25%

FRONTIER MARKETS SPECIALISTS

Despite this year’s lacklustre performance, Frontier Africa equity returns have historically exceeded South Africa, MSCI Eastern Europe, MSCI Far East and the Shanghai Composite. Further volatility has been lower in almost all years (graph not shown). As the right hand graph shows, SSA ex SA has out-performed both the MSCI Developed and the MSCI Frontier markets.

Source: Hartland-Peel Africa Markets Equity Research Frontier African Equity Markets Outperformed Long-Term

700

MSCI, CHINA & AFRICA EMERGING MARKET INDICES US$ TERMS

600

1,200

SUB-SAHARA AFRICA EX SOUTH AFRICA: REGIONAL MARKET INDICES US$ TERMS

4|P a g e

1,000

500

800

400

600

300 400

200 200

100 0

0

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 SUB-SAHARA EX SOUTH AFRICA EASTERN EUROPE SHANGHAI

Source: Hartland-Peel Africa Equity Research

SOUTH AFRICA FAR EAST

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 WEST AFRICA EAST AFRICA & MAURITIUS SOUTH CENTRAL AFRICA

SUB SAHARA EX SOUTH AFRICA SOUTH AFRICA

credit: www.DaMinaAdvisors.com 5|P a g e

AUGUST 2014

GHANA BUSINESS & FINANCE

43

OUTLOOK

New challengers for China:

Africa’s emerging partnerships 2.0?

Jean-Philippe Stijns and Bakary Traoré

Though China has recently been a dominant force in trade and investment on the African continent, India and Korea are fast becoming serious challengers.

How can African countries make more of these evolving trends? And what role can the traditional partners in the OECD area play?

Xi Jinping, the new Chinese president, claimed on a visit to Tanzania that “whether a country is rich or poor in resources, China treats it equally”.

Could he have meant “as an equal”, alongside China?

China’s involvement on the African continent

44

has been evenly focused on both exporting and importing.

Yet, in a widely quoted Financial Times op-ed, Lamido Sanusi, Governor of the Central Bank of Nigeria, complained about the nature of the ties that bind Africa to China, when he wrote that “China takes our primary goods and sells us manufactured ones”.

On the whole, the impact of China’s trade with African countries is deemed to have been positive in so far as its takeoff around the turn of the century coincided with a marked acceleration in the growth rate of African economies. However, African policymakers still largely lack the necessary tools to be able to negotiate beneficial trade deals with any of their partners,

GHANA BUSINESS & FINANCE

AUGUST 2014

relevant products too. “We believe it’s the right time to start investing in the African market, given its population […] 70% of the African people are under 30 years old, which means they are our future customers,” said George Ferreira, chief operating officer and vice-president of Samsung Electronics Africa, in 2012. The company has just completed and launched a fullscale television plant in Egypt, its first production base in Africa.

Most investment in Africa, including that from emerging economies, still targets natural resources. What is new and Apart from trade to and from Africa, intra-continental trade noteworthy is that south-south investments–that is to say, from between countries also represents a huge, largely untapped, fellow developing countries–have constituted the largest share opportunity. Intra-African trade already comes as high as of announced new (greenfield) investment to Africa for the fourth in trade volume after Africa’s trade with the EU, US second year in a row. Despite having dropped from $43.7 billion and China. In fact, intra-African trade averaged more than $40 in 2011 to $24.9 billion in 2012, their share of total greenfield billion annually between 2005 and announcements for Africa increased from 2010 and boasts the highest share of 53% in 2011 to 61% in 2012. This, in part, “Africa should leverage manufactured products (67% versus reflects weaker investment interest from 14% for China-Africa trade). crisis-stricken OECD countries. Still, the such best practice to trend has led to a diversification in trade Food imports are more important in partners, including beyond China. strengthen its hand and trade than the sum of oil, convince companies ... to intra-African minerals and other raw materials put Take India, whose rising importance together. Clearly, population growth concerns both trade and foreign direct bring real improvements and increasing urbanisation offer investment flows. India surpassed China by transferring more of substantial opportunities, particularly in terms of greenfield investment in Africa during the 2003-2012 period, with $52 their skills, know-how and in the agro-processing sector. And as intra-Africa trade expands, along with billion worth of announced projects, contributing to strategic the middle classes, so also will the versus $45 billion for China, according potential of banking. But to exploit to fdimarkets.com, a worldwide database infrastructure.” these opportunities much remains to monitoring cross-border greenfield be done. Cross-border infrastructure, investments. India’s dominance over China including railways, roads, airports and telecommunications, not only concerns the quantity of investment, but also the needs to be upgraded for a start. And border taxes on goods range of investment. The top sectors for India include fossil should be reduced. In fact, policy should encourage generally energies, chemicals, metals and food, and also the automotive, freer trade, investment and movement of talent across all telecommunications and renewable energy sectors. Furthermore, African countries. Strengthening regional ties and co-operation Indian initiatives are not state-led, but are driven by individual would also underpin Africa’s ability to negotiate better deals in private companies looking to expand their markets. The bestglobal trade fora, including gaining better access to its main known corporate name is Tata Group, whose interests range export markets. It will require harmonisation of business laws from agro-processing and energy, including renewables, all the way to consumer goods and financial services. too, for which there is clearly a need.

Korea is another emerging challenger on the African scene. At some $25 billion in 2011, Korea’s trade with the continent has flourished since 2000. Within a few years, Korea has become one of Africa’s major trading partners, just behind China, India and Brazil. Korea’s rise as a trade partner with African countries is more export-driven than other emerging partners, with its exports to Africa increasing more than 2.5 times faster than its imports from the continent. This shows up in the quality of its trade, primarily in sales of railway equipment, for which Korea is Africa’s lead partner, far ahead of the EU or China.

Korean exports of vehicles and telecommunications equipment to African countries have also risen sharply.

Indeed, the “technological intensity” of Korean exports to Africa is higher than that of any other emerging partner.

Around 75% of Korean exports are composed of equipment and electronic products, as against 40% in the case of China.

Samsung Electronics, Korea’s well-known global brand, is bidding to gain a large share in the African market, targeting revenue of $10 billion in 2015 (up from around $3 billion in 2012). Samsung’s strategy aims at developing more locally

The Economic Community of West African States (ECOWAS) is setting a good example of how African countries can collaborate and sharpen their competitive edge. Africa should leverage such best practice to strengthen its hand and convince companies from Shanghai to San Francisco not just to come and do business, but to bring real improvements by transferring more of their skills, know-how and contributing to strategic infrastructure. As for trade and investment from OECD countries, their market share may have been eroded by emerging partners, but the volume of their trade and investment in African countries remains important and is growing again after the hit it took at the onset of the financial crisis. Indeed, the trade patterns of traditional partners are largely complementary to those of emerging partners. This is all to the benefit of African countries because these complementary partnerships broaden and diversify Africa’s trade and investment opportunities.

That means a greater range of partners competing for more opportunities in increasingly open and confident African markets, and therefore more countries across the continent being treated as equals, not just in discourse but on the ground.

Credit: OECD OBSERVER

AUGUST 2014

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OUTLOOK

not just China. And China’s outsized dominance suggests that Africa is not yet making the most of its rich range of trade and investment partners either. Nor are African policymakers equipped to be able to prevent Chinese trade–or that of any other country, for that matter–from stifling its own burgeoning intra-African market.

This is an asset backed investment, which offers investors who intend to own a home in the future an opportunity to invest by contributing toward a plan to invest in the real estate market (mortgage financing) for a return.

ASSURED HOME PLAN

This product targets investors who have an intension to own a home in the future by investing in this plan to meet their equity contribution of a mortgage facility.

Features � Multiple contributions of GH¢500.00 - GH¢2,000.00 � Silver - GH¢100,000.00 - GH¢150,000.00 � Gold - GH¢150,000.00 - GH¢200,000.00 � Platinum- GH¢200,000.00 - GH¢250,000.00 � Withdrawal allowed: penalty applied on interest only if withdrawals are made before 60 months. � Tenor is 5 – 10 years � Statement is upon request Benefits � Interest at Bank of Ghana (BOG) inflation rate plus � Guaranteed 70% mortgage financing of client on the plan beyond 60 months provided client meets 30% equity contribution on a mortgage of ASN origin. � Guaranteed 55% mortgage financing of client on the plan beyond 60 months provided client meets 45% equity contribution on a mortgage of a property started but not completed of ASN origin. � Guaranteed life insurance cover on property value to meet contingencies such as death, critical illness, and permanent disabilities. � Clients may use their investment balance as guarantee to access other facilities without disrupting their investment plan.

AUGUST 2014

ASSURED HOME INVESTOR

� This is an asset backed product targeted at investors who wish to invest in the real estate (mortgage financing) business. � It is a long term high yield investment package with an insurance element.

Features � Multiple placement of minimum of GH¢ 50.00 – GH¢500.00 note, per each placement � Attractive interest rate. � Insurance element � Penalty of 20% on interest only if withdrawals are before 24 months � Tenor 5 – 10 years � Statement upon request � No account charges.

Benefits � Interest at T bill plus 2 � Insurance package tied to investment plan or value at maturity � Clients can use their investments as a guarantee to access credit facilities without disrupting the investment.

GHANA BUSINESS & FINANCE

47

ADVERTORIAL

Assured Home Investment

PERSPECTIVES

A Collection of Disgraces J. N. Halm

Collecting, as a recognized hobby all the world over, has always intrigued me.

One definition states that the hobby of collecting includes seeking, locating, acquiring, organizing, cataloging, displaying, storing, and maintaining whatever items are of interest to the individual collector. There are the popular ones like stamp collecting, coin collecting, collecting of crafts, arts, artefacts, antiques and paintings.

O

ther collectibles include phonographs, fountain pens, toys, games, dolls, etc. There are also the more eccentric collectors of items such as collecting butterflies, skulls, tiles, military uniforms, teapots, perfume bottles, among other things. There are also lotologists (collectors of lottery tickets), sucrologists (collectors of sugar sachets), oologists (collectors of eggs) and conchologists (collectors of shells) and many others I am yet to come across. Some of these hobbies have metamorphosed into serious money-making ventures generating millions of dollars annually.

I am also a collector but unfortunately I happen to fall into the latter category of outlandish collectors. My hobby is collecting incidences of bad customer experiences and I love this hobby.

The reason being that it serves me well especially in running my sales training and customer relations seminars. I am always of the opinion that to better explain sales strategies and principles

48

I need to “come down to earth” and use every day experiences that millions of Ghanaians face. Another advantage of this hobby is that it does not require any initial capital investment.

All you do is “open your eyes” as you move around town and you will be astonished at the number of incidences you would come across. These are what I call MODs (i.e. Moments of Disgrace) and they abound in this country.

To further convince you to join in this amazing hobby of mine, I have decided to share three of my all-time favourite occurences. These are nominees into my Bad Customer Care Hall of Fame. That means they are very special to me so, as would plead all other collectors, “Please handle with care”.

# 1: THE GRUMBLING PHOTOCOPIER OPERATOR My office urgently needed to get some photocopies done one evening and I had to accompany a colleague to do the copies.

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AUGUST 2014

PERSPECTIVES

We found ourselves in a communication centre that provided some secretarial services. We met three gentlemen there who did not look very excited to have us but we did not make much of it. After giving them our bunch of papers we sat down to wait for the copies. The attendant who all the time had a frown on his face got to work though grudgingly. I had experienced too many of his kind to have been bothered. At that point in time he had not done anything to warrant me conferring a MOD nomination on him. However I did not have to wait long before I gave him the enviable award. After a couple of minutes he started grumbling and so I was forced to ask what the problem was. Believe it or not, his problem was with us, his customers. And for what reason? He claimed, “We were using up all his papers!!” Simply put, a service provider got angry at his customers for bringing him business.

front desk, she asked what the wrongly debited amount was.

On being told she unprofessionally and uncouthly remarked in a local language, “Ah, but is it for only this small money that we’re being pestered like this?” This was in full hearing of the customer and all others within hearing # 2: THE RUDE TAXI DRIVER I found myself in an unbelievable taxi ride “... customer care range. There you have it: A customer who was rightfully complaining about bad service one day. A few minutes into the journey, this should come provided was insulted for just asking for a taxi driver decided we needed to listen to naturally to all of wrong to be corrected. some music and so slotted in a cassette. The These are just a few instances from my vast us, for the simple music was obviously dear to him and since he felt it was not loud enough he increased reason that we are collection. I sincerely believe other Ghanaians have more instances to narrate, some even the volume to an unbearable level. A middleall customers at more grievous than the three mentioned. What aged woman in the vehicle kindly asked him one point time.

I have always found hard to reconcile is how a to turn down the volume which he refused. people whose hospitality is almost legendary The lady was however persistent and what the can become so poor at treating customers? Why is customer taxi driver told the lady won him this MOD nomination. He care so lacking in many of our businesses? If the proverbial rudely shouted the lady down and flatly told her he would do Ghanaian hospitality is a truism, why are our customer relations no such thing. When other passengers started to side with the so bad? Is it a case of being nice to strangers and being uncaring woman he threatened to force everyone down. His reason? He towards our own brothers and sisters? I have always believed was in his office (i.e. inside the taxi) and no one had any right that customer care should come naturally to all of us, for the to tell him what to do in his office. To him since he could not simple reason that we are all customers at one point in time. come to our offices to tell us what to do, reversely we also did Therefore, it is simply a matter of applying the Golden Rule: not have the right to tell him what to do. Plainly speaking, Do unto others as you would have them do unto you. a service provider got angry at his customers for demanding better service.

# 3: THE UNCULTURED BANK OFFICIAL A bank’s customer had been wrongly debited and he came to the banking hall to lodge a complaint and to seek redress. In the process of sorting out the issue with the front desk official he inevitably created some traffic at the reception. This created some frustration for the official but he tried as much as possible to handle the situation. As this was going on another bank staff, apparently one with a higher authority, who was sitting a few tables away, came into the fray. Calling from her desk, she asked what the matter was. After being briefed by the officer at the

AUGUST 2014

The writer is the CEO and Principal Consultant of Exsellers International, LLC, an avantgarde 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 salesboosting products and services. He blogs at www.exsellers. blogspot.com. For details on upcoming training seminars contact: 233-24-3157948/233-27-4930493 or exsellersghana@yahoo.com

GHANA BUSINESS & FINANCE

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PERSPECTIVES

A re-look at centralised management Julius Ceasar-Tokoli

Independence! Why can’t everyone be free? Certainly, everyone deserves to be free; after all, it’s a human right. The quest for this right was what led to the independence of Ghana on 6th March 1957. And since then, Ghanaians have demonstrated how much they value and cherish their independence by commemorating that event every year; and this year was no exception.

I

n the animal kingdom, birds take care of their hatchlings by providing them with shelter and food. The dexterity with which birds undertake this task instinctively is marvelous.

When the time is ripe, parent birds teach their hatchlings how to fly.

Eventually, these also learn to fend for themselves and leave to start families of their own.

Similarly, every young person loves to have some independence. While some parents find this unpalatable, when teenagers seem to seek independence, they are only expressing a natural inclination that the Creator has put in each one of us. It is this natural phenomenon that enables us to eventually leave home and start families

50

of our own. Thus, if properly guided, adolescents with that desire grow to become socially responsible adults and are able to function very well in society.

From what nature teaches us, the benefits of proper independence are enormous.

Decentralisation and Corporate Strategy

That same sense of independence, if properly weaved into the corporate culture, would go a long way to unleash creativity and nurture growth.

However, we see that large organisations have over the centuries operated in the head office or centralised management

GHANA BUSINESS & FINANCE

mode. Although that was useful for a time, it certainly is not anymore. While one can appreciate the premise of the head office concept, it is important to be able to identify and diagnose its endemic old age ailments and prescribe the right antidotes for its cure.

The head office (or headquarters) concept of centralised organisation is based on the premise that there is a certain ‘sovereign’- the board usually - who knows what it takes to run a company better than any other person or group. This ‘sovereign’ has its lieutenants (middle management) through whom it operates and these lieutenants in turn get their subordinates to do discrete, repetitive work until a certain efficiency and

AUGUST 2014

“The first reason why the head office nonsense should go is that it stifles creativity, innovation and initiative.” effectiveness are achieved. Another tenet of centralised management is that to institute a chain of command, there has to be a certain order and channel of reporting for proper supervision and maintenance of the status quo.

Times Have Changed

Well, in themselves, these assumptions are not bad at all, for they served their purpose. But are they still relevant today?

Granted, due to the way the world’s educational curriculum is structured, it may seem that those assumptions are still relevant. This is because MBA education for instance teaches students how businesses operate; instilling in them the need to maintain the present order of things rather than equipping them to challenge and modify traditional ways of doing things by asking the “why?” questions . As a result, most large organisations are not in tune with the trends of the modern world, breeding organisational inertia in the process.

AUGUST 2014

Granted, having access to information is different from absorbing such.

Furthermore, the absorption of information does not in itself lead to success in management since application is required. Hence when management empowers employees and guides them to contribute to corporate strategy and the decision-making process, the result is an adaptive and responsive, robust company that is moving with the times.

What about Supervision?

Regarding the second premise above, some have expressed the fear that supervision would be a problem if management is decentralised. While that is a valid concern, it has been demonstrated in human relationships that peer pressure can be stronger and more effective than authority. Thus when checks and balances are in place among peers, positive peer pressure is more helpful in creating order than a top-down chain of command.

“Those at the local branch are more in touch with the goings-on in the local business territory.”

Why Centralised Management Should Go

The first reason why one might consider eliminating the idea of the head office is that it stifles creativity, innovation and initiative. Office branches are more or less string-puppets in the hands of the head office under centralised management. They are limited in how creatively they can steer the affairs of the business for higher productivity, and since major decisions would have to be approved by head office, the bureaucracy involved inhibits initiative

and discourages creativity. Often, by the time a particular strategy or decision that meets local requirements is approved it is no longer useful. Certainly, this only leads to lower productivity and thus income for the business rather than effective management that results in wealth creation.

Secondly, as can be inferred from the point above, it stifles productivity and raises operational costs needlessly. This is because even though local branches are housed and staffed, including other attendant costs, they are hugely limited in strategising to take advantage of emergent opportunities that could add to productivity and indeed revenue.

Thirdly, it lacks realism. Those at the local branch are more in touch with the local business territory. However, since the head office has its own universal operating system and procedures, the branch has no choice but to just plug into that system no matter how much friction is causes with the local environment, leaving very little or no room for flexibility. In essence, particular strategies from the head office might not be practical to local demands.

Finally, effective control can become a headache. Contrary to the belief that the head office concept would engender a better control system, the opposite rather tends to be true. Since the head office relies on quantitative reports, it may not be aware of the standard of customer service delivery, for example, as well as other pertinent human qualities and human relations issues. Granted, there is a branch head to administer some of these things.

However, since it is a hierarchical system and he is also a part of management some of those things would either happen on his blind side or he may not even worry himself about them, so far as his boss at the head office is satisfied with his performance and report.

The author is the CEO/ Managing Partner at Soleil Consults; a Strategy, Management and ICT firm. http://soleilconsultsgh. blogspot.com.

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PERSPECTIVES

Be that as it may, times have changed.

The era when information was the preserve of the privileged, rich and powerful is over. With the abundance of information today, top management can no longer go on pretending to be a ‘sovereign’.

PERSPECTIVES

Customer service as a marketing strategy Yvonne MacCarthy

W

hen ever I advice clients that tthey need to take a critical look at the customer service that they give their customers because customer service when done properly becomes a marketing tool and is a marketing strategy they ask me how? I will not jump into the central topic of this section with the assumption that you already know everything necessary to understand how customer service can be a critical part of your company’s marketing strategy, instead I’ll start with a brief primer on marketing basics. After all, if you are reading this article then it is likely that you are looking for a way to fit customer service and marketing together to benefit your organization. That’s a goal that’s guaranteed to be easier with a firm grasp of some marketing fundamentals.

First you need to understand that marketing as a business practice has changed very little over the past several centuries.

52

The tools with which we market our brands and the products and services they offer have changed significantly over the years; but make no mistake, the principles of marketing will never change as long as human psychology remains constant.

Simply put, marketing is the communication of a benefit found within a particular product or service to a consumer or consumer group. This means that you have to stop thinking of marketing as some mystical practice where suited executives employ modern day voodoo to make people buy things they don’t really want.

Instead, know that marketing is just helping people understand that something you are selling is available and may be of particular interest to them. People only ever buy two things; solutions to problems and good feelings.”

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AUGUST 2014

Second, marketing as a practice is usually segmented into four aspects. These aspects are usually referred to as the “4-P’s of Marketing.”

1. Product – What you are offering the market, including services for sale and anything offered to add additional value to the core product or service.

2. Price – How much those solutions and good feelings will cost the customer and how they can make payment (terms, credit, special offers, etc.).

3. Place (or distribution) – How (conveniently) you will get the goods or services you offer to the consumer who wants to buy them.

4. Promotion – How you communicate to the prospective customer the benefits inherent in the first three aspects mentioned above.

This means that once you have settled on a product or service to offer to the market, and defined all of the benefits the offering will bring to your market, you don’t have to confuse yourself with the intricacies of marketing. If you have the ability, hire a professional marketer. If you don’t, you can market your products yourself. But in either case keep your marketing simple by ensuring that every strategy and marketing tactic you employ is sifted through these four filters which are all linked to providing excellent customer service.

1. Am I letting my target market know that I have a product that consistently delivers their desired benefits, and that those benefits are obvious and easy to obtain once they purchase from me?

2. Does my market know that my product offering is priced in a way that allows them to get a greater perceived value for their cedis spent?

3. Am I telling my customer how they can readily get their hands on my service or product; and, if there are changes in the distribution how well can I communicate this to my customer?

4. Does my promotion strategy effectively and consistently communicate to my target customer all of the relevant problems my product or service can solve and all of the good feelings it can provide to them?

AUGUST 2014

Every marketing strategy and tactic that successfully gets through these filters will support and improve your business customer service efforts.

So, what is customer service exactly? From a business management perspective, customer service can be viewed as an additional service offering supporting your core product or service. If you ask your friendly neighborhood marketing professional, they’ll say that customer service is a means to develop the long-term relationship between the business and its consumer.

Viewed through the perspective of the consumer, customer service is a necessary tool that “should” ensure consistent delivery of the solutions and good feelings they have come to your business to purchase.

Here’s what this means for you: You need to know that 99% of the time how you service your customers before, during and after the sale will be the key aspect that determines if you can convert customer interest into a first sale and a first sale into a lifetime of profitable business transactions.

One of the facts of doing business today is that almost every market offering can be duplicated by your competition within six months of market entry. What can’t be duplicated are the unique, human based aspects of your product mix. This is what businesses call Customer Service. These aspects are composed of every point of contact between a “live” representative of your company and the customer.

So, if this is one of the few ways to make your brand the superior choice in the mind of your customer, significant focus and effort should be directed in developing customer service, knowing it can be the tool that helps you beat your competition. Remember that marketing, advertisement and rebranding can help boost a business but they need to work in tandem with customer service. None of these business activities would be effective without exceptional customer service.

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?”

Contact: clientserviceinstitute@yahoo.com

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53

PERSPECTIVES

Here’s what this means for you: If you can use marketing to consistently communicate to a consumer group that what you offer will solve their problem(s) and make them feel good, then your competition would have to put forth an extreme amount of effort to derail your business’ success.

TOOL KIT

6 Best Tablets for Business and Office Work

When you are looking to buy tablets that will assist you in professional use, there are plenty of choices that you have at hand. The options that you are going to have are diverse and so you can explore the different models and then pick the one that seem to be ideal for you.

1. Apple iPad Air

3. Nexus 10

Google created quite a stir when it launched Nexus 10. For business minded people, this is definitely the tablet you need to watch out for. The Nexus 10 seems to be the tablet that can give iPad a run for its money.

5. Samsung Galaxy Note 10.1 When we are talking about the best business tablets, you just canâ&#x20AC;&#x2122;t miss the Apple iPad air. This is the thinnest and the smartest iPad so far and it comes loaded with some of the finest specifications that can help you serve your need. The reviews for iPad Air have been extremely promising as the smart Apple processor will allow you to concurrently send emails, download files, create notes and do more.

2. Microsoft Surface Pro

This Windows 8 pro device which comes in the form of tablet offers some of the best features that one can ask for.

It is smartly designed and is configured with some of the most impressive designs. The kind of smoothness that you will get when you are running the apps is excellent. You will find ample apps that will help you carry out your business related work. When you are in the office and looking for a smart and portable choice, this tablet by Microsoft is definitely a good option to consider.

The processor is brilliant and it is ideal for those who wish to multitask and carry out different operations together.

The app support is excellent and the RAM that is offered will allow you to work on your business needs in an apt manner.

Sometimes, when you are buying a tablet for business use, you will have a preference for a larger screen and in such cases, Samsung galaxy Note 10.1 seems to be a smart choice. The display resolution is sharper than what the iPad has to offer and this in itself is a proof of the clarity you will get.

Users have the option of opening two windows simultaneously and this will be of tremendous use when you are multitasking or even comparing files for your office use.

4. Sony Xperia Z

When we are talking of top business tablets that you can use, how can Sony be left behind in this race? The Xperia tablets have managed to make a commendable name for themselves and the kind of specifications that they offer is hugely impressive. The design of this tablet is handy and it is ideal for carrying to offices because you will find it to be portable. When it comes to connectivity and support for emails, presentations, making clips and more, this tablet is not going to disappoint you. The graphics and display is promising too which makes it fit for viewing your files.

6. Lenovo Miix 2

With the Zippy Bay trail processor, this 8 inch tablet is an extremely impressive choice for office people. You will find it to be affordable, economical and yet it has all those features which the high end tablets will offer. You can access your emails on the go and enjoy a plethora of different apps together.

The long battery life ensures that you can fall back on your tablet on those days when you have too much work to finish. The app support is extremely commendable. credit: thefusejoplin.com

AUGUST 2014

GHANA BUSINESS & FINANCE

55

Grab a copy of

GHANAâ&#x20AC;&#x2122;S FIRST GLOBAL BUSINESS READ at the following outlets: Challenge Bookshop

Total Fuel Station (Tsuibleoo)

The Medipoint Pharmacy

Total Fly Over

Agapet

Haatso Total

Circle Goil Fuel Station

Catholic Bookshop

Oppamo Supermarket

Kingdom Books & Stationery

Konekions (Holiday Inn)

Legon Shell

Paloma Vendor

Sakaman Total

Evergreen Supermarket

Engen Mart

SyTrix

Stadium Shell

Koala Shopping Centre

Roundabout Shell

Shell Mart

Goil Fuel Station (Labadi Road)

Neeni Clothing (Alisa)

Quick Shop

Artist Alliance

A-Mart

Ring Road Total

Apollo Theatre

Circle Vendor

Teshie Last Stop Shell

Into Clothing (La Palm)

Excel Mart

Hansonic Shell (KFC)

Tesano Total

Goil Mart

Dansoman Shell

Total Fuel Station (Trust Towers)

Santa Monique Supermarket (37 Goil) Sakaman Shell 37

Sakaman

Best Western Premier Hotel

Abundant Grace

Health Watch Pharmacy

Total Teshie First Junction

Ghana Post Office Vendor

Coconut Grove Hotel

Total House Fuel Station

Airport Shell

Kokomlemle

Teshie

Circle

Spintex

Circle

Adabraka

La Road Paloma

Sakaman

Weija

East Legon

Osu

Tema

La Road

La Beach Road

Circle

La Palm

Dome

Tesano

Dome

Adabraka Airport

Cedi House

Alisa Hotel Lashibi

Asylum Down

Teshie

Airport

Airport

High Street

Spintex Haatso

Tesano Legon Tema

Stadium La Road Community 11, Tema Champion Road Ring Road

Teshie Last Stop Dansoman Dansoman

Asylum Down North Ridge

Airport

Ghana Business & Finance, House No. 7, Lamb Street (off Farrar Avenue), Adabraka, Accra, Ghana P. O. Box O 772, Osu, Accra, Ghana, Tel: +233 302 240 786, Fax: +233 302 240 783, email: info@ghanabizfinance.com www.ghanabizfinance.com

STATS & INDICES

Trading Results - GH Cedi as at Wednesday 23rd July, 2014 Share Code

Daily Interbank Forex Rates as at Tuesday 29th July, 2014

Year High (GHS)

Total Shares Traded

Last Transaction Price (GHS)

AADS 0.52 0.52 ACI 0.06 0 0.03

Currency

Pairs Code

Buying

Selling

U.S Dollar

USDGHS

3.0324

3.0350

Pound Sterling

GBPGHS

5.1472

5.1519

AYRTN 0.18 0 0.18

Swiss Franc

CHFGHS

3.3537

3.3554

BOPP 3.30 0 2.87

Australian Dollar

AUDGHS

2.8526

2.8562

Canadian Dollar

CADGHS

2.8119

2.8140

Danish Kroner

DKKGHS

0.5464

0.5468

CPC 0.02 0 0.02

Japanese Yen

JPYGHS

0.0298

0.0298

EBG

7.98 30,100 7.08

New Zealand Dollar

NZDGHS

2.5932

2.5960

EGL

2.50 64,000 1.80

ETI

0.28 88,800 0.29

Norwegian Kroner

NOKGHS

0.4875

0.4877

Swedish Kroner

SEKGHS

0.4447

0.4449

GCB 5.69 600 5.25

S/African Rand

ZARGHS

0.2874

0.2875

GGBL 6.20 0 3.95

Euro

EURGHS 4.0747 4.0778

Chinese Reminbi

CNYGHS

BCEAO

GHSXOF 160.86 160.98

GWEB 0.04 0 0.04

Dalasi

GHSGMD 13.08

13.09

HFC

Ouguiya

GHSMRO 96.50

96.58

Naira

GHSNGN 53.35

53.40

Leone

GHSSLL 1435.46 1436.69

PKL 0.06 0 0.06

WAUA

WAUGHS 0.1620 0.1620

PZC 0.79 0 0.55

0.4898

0.4901

Treasury Bill Rates

AGA

37.00 0 37.00

ALW 0.06 0 0.05

CAL

1.04 91,000 0.89

CLYD 0.04 0 0.04 CMLT 0.16 0 0.14

FML 7.55 0 6.58

GLD

26.13 0 23.00

GOIL

1.00 2,500 0.98

GSR 2.75 0 2.75

1.60 21,100 1.34

MAC 3.30 0 3.30 MLC 0.39 0 0.33 PBC

0.17 1,400 0.14

SCB

20.56 1,910 18.20

SCB PREF

0.52

SIC

0.52 36,400 0.40

0

0.55

SOGEGH 1.17 20,000 0.85

as at Monday 21st July, 2014 to Friday 25th July, 2014

SPL 0.04 0 0.04 SWL 0.03 0 0.04

Period

Discount Rates Discount Rates

TBL

0.35 3,500 0.24

91 - Day

23.3863%

24.8385%

TLW

35.05 0 35.05

182 - Day

22.9875%

25.9727%

1 - Yr Note

-%

22.5000%

2 - Yr Fixed Rate Note

-%

23.0000%

AUGUST 2014

TOTAL 6.57 0 6.35 TRANSOL 0.03

0

0.03

UNIL 18.31 0 17.60 UTB

0.49 1,100 0.39

GHANA BUSINESS & FINANCE

57

COMMODITIES

Month ending June 2014.

Unit

Wholesale Prices (GH¢)

Weight Accra Bawku Kumasi Tamale Techiman Takoradi Dambai this month last month Avg% Change

Cassava(Fresh Tubers) Bag 91kg 60.00 N/A 33.50 80.00 36.00 58.75 50.00 53.04 53.90 -1.59 Cassava (Gari)

Bag 68kg 100.00 115.50 166.25 116.00 68.00 128.75 116.00 115.79 118.66

-2.42

Cowpea (White)

Bag 109kg 340.00 200.00 200.00 200.00 195.00 320.00 196.00 235.86 225.23

4.72

Groundnut (shelled)

Bag 82kg 410.00 395.00 317.50 276.00 337.50 342.50 336.00 344.93 308.86 11.68

Maize (white, grain)

Bag

Millet (grain)

Bag 93kg 155.00 110.00 117.50 96.00 132.50 200.00 116.00 132.43 129.14

100kg 110.00 67.50

110.00 72.50

81.75

127.50

86.00

93.61

85.31

9.72 2.54

Rice (imported-unclesam) Bag 50kg 190.00 N/A 200.00 N/A 220.00 220.00 N/A 207.50 199.00 4.27 Rice (local-white)

Bag 100kg 290.00 195.00 232.50 196.00 202.50 132.50 196.00 206.36 201.66

Soya Beans

Bag 109kg 290.00 110.00 116.25 106.00 170.00 240.00 126.00 165.46 146.37 13.04

Tomato (cooking) Wheat (Grain)

2.33

Crate 52kg 307.50 91.25 141.25 115.00 126.00 325.00 150.00 179.43 210.06 -14.58 Bag 50kg 150.00 120.00 132.25 125.00 247.50 180.00 N/A 159.13 151.40 5.10

Yam (pona-medium) 100 tubers 250kg 362.50 260.00 222.50 190.00 360.00 362.50 250.00 286.79 274.14

4.61

NB: * Accra market is Agbogbloshie * Kumasi is the Central market.

To receive prices update and agric tips on your phone dial 1900 / 0302 211583 or visit www.esoko.com.

Groundnut (Shelled)

Soya Beans

Tomato

In the month of June the price of a bag of groundnut remained high on the market. The average percentage change in price for the month also remained high 11.68 percent. The commodity was sold in the month between GHc 276.00 and GHc 410.00. These were recorded on the Tamale and Accra markets respectively. The average price for the 82kg bag of the commodity was sold for GHc 344.93 from GHc 308.86 recorded for the month of May.

The average price of a bag (109kg) of Soya beans gained an average of 13.04 percent in the month of June to close the month at GHc 165.46 from last months GHc 146.37. The commodity was sold between GHc 126.00 and GHc 290.00 for the Dambai and Accra markets respectively. Dambai been the lowest and Accra the highest. The commodity is in high demand hence the high prices.

A crate of tomato for the month of June saw a dip in price. The commodity lost an average of 14.58 percent to close the month at GHc 179.43 from GHc 210.00 last month. The commodity was sold between GHc 91.25 and GHc 325.00 on the Bawku and Takoradi market respectively.

58

GHANA BUSINESS & FINANCE

Esoko market watchers attributed this to enough supply of the local variety of tomatoes which dominates the market over the month.

AUGUST 2014

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