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AUGUST 2016 / ISSUE 063 GH¢10.00
Scrutinising credit rating agencies
ABCDE bridges industryacademia gap
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flies higher with First Sky Group
THE FIRST BUSINESS READ IN GHANA
Follow us online at www.ghanabizfinance.com
CONTENTS ISSUE 063 / AUGUST 2016
20 Media
The challenges facing the future of journalism are clearly explained in this continued interview. The SmartNews experience is shared with an examination of the impact of technology on traditional news and the changing modes of news aggregation.
Michael Okeson shares the story of how City Lights became a household brand in lighting in Ghana and its ambitions for an African footprint.
40 SMEs & Microfinance
22 Marketing Front Cover: Eric Seddy Kutortse Group Chairman and CEO, First Sky Group
6 Briefs
Summation of business and financial stories which occurred in Ghana, Africa and the rest of the world last month.
10 Economy
Nonagenarian Charles Heymann takes a look at the negative costs of inflation as it impacts on African development. He argues that inflationary factors, as pertain in the West, are not the same as those in Africa.
12 Banking
The Monitory Policy Committee (MPC) of the Bank of Ghana held its July meeting by maintaining the policy rate at 26 per cent. The MPC statement examines some of the issues that will take place until the next MPC meeting in September to forecast whether the rate will be maintained.
Lately, there has been an upsurge in science, technology, engineering and mathematics competitions for students. Apart from the prizes students stand to win, Dr Nana Ama Browne Klutse explains that the real benefit is that students apply science to everyday life.
Worldwide, credit rating agencies issue ratings on countries’ and companies’ performance. This article argues for and against the CRAs, revealing that the global credit crisis exposed many of their ratings to be ‘sexed up.’
At the first-ever ECOWAS Industrial Summit, as Masahudu Ankiilu Kunateh, GB&F’s online editor, writes, industrialists called for West African governments to re-examine trade liberalisation policies which hamper industrial growth and trade.
The meteoric rise of First Sky Group and its Group Chairman, Eric Seddy Kutortse, culminating in the spinning out of four companies in construction, tourism and hospitality, commodities and insurance, is delved into by GB&F’s editor, Ayuureyisiya Kapini Atafori.
36 Agriculture
The transformation of agribusiness in Ghana served as the topic for a forum where the Bank of Ghana indicated that it was partnering stakeholders to introduce an innovative funding scheme for farmers.
38 Word for Word
In this interview with MartinLuther C. King, entrepreneur
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.
There is a yawning gap between academia and industry, resulting in a mismatch of graduates with the job market. ABCDE, the PanAfrican organisation, launches its programmes aimed at drastically bridging this gap.
46 Business & Management
At 59 years, Ghana still faces major developmental challenges. In this write up, Yaw Asamoah lays out five issues that must be changed to propel the country to the next stage of economic prosperity.
48 Automobile
32 Cover
Find us online at www.ghanabizfinance.com
AUGUST 2016
30 Industry
16 Finance
42 Education
26 Science & Technology
14 Corporate Progress
Columnist J.N. Halm advises that organisations should not only direct great customer service to the external customer only. The internal employee is equally important.
The growth of e-commerce and dynamic market competition has combined to ensure that consumers have a huge array of products and services to choose from, impacting on prices of products and services.
SMEs in Ghana are operating in an environment of high interest and inflation rates. This article uncovers the debilitating effect of these twin negative rates on SMEs. Columnist Yaw Kyei Ohemeng discusses.
The world’s biggest carmaker, the Japanese company, Toyota, launches its sleek and classy Toyota Prius which is shaking the Ghanaian market with its magical attributes of luxurious mobility, and more.
50 Perspective
In this interesting piece, Yvonne Ohui Maccarthy explains the things employees must do in an organisation to give customers excellent services in order not to lose valuable customers.
52 Events
Visit conferences to be held around the world that interest you and your business.
53 Stats & Indices
Figures speak louder than words for Ghana’s economy.
54 Commodities
Know the prices of agricultural produce in selected markets, as researched and compiled by Esoko.
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GHANA BUSINESS & FINANCE
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… Need for a Contempt of Court Act? General Manager Josiah Spio-Garbrah jspiogarbrah@ghanabizfinance.com +233 264 510 396 Editor Ayuureyisiya Kapini Atafori editor@ghanabizfinance.com Columnists Jerry Halm Yaw Asamoah Dr Nana Ama Browne Klutse Yaw Ohemeng Kyei Contributors Anthony Sedzro Martin Luther C. King Oppong Baah Kennedy Addai Kuffour Adnan Adams Mohammed Ebenezer T. Hanson Design & Production Manager Benjamin Tetteh btetteh@ghanabizfinance.com Head of Finance/Administration/HR Issaka Salisu Editorial Committee Prof. Paul N. Buatsi Prof. Kwame Addo Ms Johanna Awotwi Mr Gaddy Laryea Mr Ray de Bono Mr Nana Robert Mensah Mr Frederick Alipui Ms Dede-Esi Amanor-Wilks Ms Nana Spio-Garbrah Office Location Ghana Business & Finance African Business Media House No. 7 Lamb Street (off Farrar Avenue) Adabraka, Accra, Ghana Mailing Address P. O. Box O 772, Osu, Accra, Ghana Tel: +233 302 240 786 Fax: +233 302 240 783 enquiries@ghanabizfinance.com Brand Advisor Dmax Studios in Malta, EU. (www.dmax.tv) Credits GNA Daily Graphic radioxyzonline.com Mergermarket Group ghanabusinessnews.com
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The unfortunately misplaced utterances by the two panelists and the urging on of them by the host of the programme are condemnable. Thus majority of Ghanaians have condemned the threats of death by the two panelists against the venerable judges of the Supreme Court. Without hesitation and reservations, I condemn the threats made by the two on Montie FM, an Accra-based radio station, on June 29. But I beg to defer that, though the four-month sentences handed down on Alistair Tairo Nelson, Ako Gunn, the panelists, and Salifu Maase (alias Mugabe), the host, by the judges are lawful, I strongly believe the jail terms are too harsh and cruel. To me, though the timing of the threat-speeches was inopportune as the members of the Bench were in grieving mood and awaiting the commemoration of their three murdered colleagues on June 30, the heavy sentences smack of revenge on the part of the judges. Indulge me and understand that though judges are held in high esteem by society and are treated like gods, they are not infallible. After all, to err is human. To forgive is divine. The judges chose not to be divine because they are human beings, regardless of the defendants’ and their counsel’s apologies and remorse. That is OK with me. The law must take its course when a citizen violates the law for society to be safe and secured to avoid a Hobbesian state of nature. So convicted criminals must stay in gaol. That way, the law serves a deterrent; and lessons are learnt. To my mind, prison is for proper criminals like rapists, robbers and murderers, and not for persons who have fallen foul of the law of contempt of court after making public statements that undermine the administration of justice. I’m not being moralistic: never wish time in prison for your worst enemy for criminal speech. I’m, therefore, scandalised and shocked that some respectable lawyers, liberal believers, free expression advocates and human rights activists side with the Supreme Court’s sentences, with some of them stating that the terms should have been longer. Normally, the right thing was that the state should have prosecuted the two panelists on the charge of threat of death or harm. But we are not in normal times. Some argue that because the Bureau of National Investigations (BNI) bungled the case with its report, and the Attorney-General deferred prosecution of the hate-speech utterers, the judges had to step in and invoke the law of contempt to safeguard and preserve the sanctity of the Judiciary to serve an example to persons who may similarly intend to drag the hallowed Judiciary in the mud. Also, the toothless National Media Commission (NMC) did not bring the trio to book. Like true libertarians, much as I do not support the degrading of the Judiciary which is the facilitator of the rule of law and purveyor of due process, I absolutely dislike the criminalisation of speech – no matter what the 1992 Constitution provides for in Article 126 (2). Again, as United States President Thomas Jefferson preferred a bad press to a bad government, I go in for bad media rather than a bad judiciary. The criminalisation of speech, no matter how constitutional and legal it is, is a killer of the democratic spirit and a suppresser of free expression and freedom of the media. Thus, I’m on the same wave-length with Yaw Boadu Ayeboafoh, a lawyer-cum-seasoned media practitioner, when he wrote: “… some of us do not support custodial sentences for contempt of court.” Matters arising from the case and sentences? First, the politicisation of the case as the radio station, owned by known high-ranking NDC members, is used to demonise the NPP and its standard bearer, Nana Akufo Addo. So many NPP members and sympathisers support the sentencing while the NDC is against it. Second, the controversy over the petitioning of President John Mahama to pardon the contemnors has put him a colossal dilemma – a sword of Damocles situation. Third, the seeming usurpation of the NMC’s role as the directors of Montie FM were compelled to submit a policy to the apex court for approval. Fourth, the precedent the Supreme Court set in former NPP Secretary General K. Owusu Afriyie’s contempt case by not summoning the directors of the radio station was not followed by the same. Why? Fifth, the principle of a company being a legal personality separate from its owners/directors was not applied. Sixth, an unapparent compromise of the natural justice principle of one cannot be a judge in his/her cause as the judges sat on a case against them. Thus the calls for a Contempt of Court Act are legitimate. What borders me most is the possible abuse of the discretionary powers that the Constitution confers on the Judiciary. History has proved that the judiciaries of states have virtually acted, when their interests are concerned, in most cases, in line with the Rousseauean theory of the basic law of human survival being self-preservation. Can’t it be that some judges could use these constitutional powers to punish the people excessively? Wither true non-elitist democracy in Ghana?
Ayuureyisiya Kapini Atafori Editor (+233 024 2385374)
AUGUST 2016
Mail to the Editor
Send your articles, comments and letters to the editor at editor@ghanabizfinance.com
GHANA BUSINESS & FINANCE
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EDITOR’S SUITE
Much ado about Supreme Court’s Montie case
GHANA BRIEFS
Entrepreneurs develop portal to check deleted NHIS card names Immediately after the Electoral Commission (EC) released the names of voters deleted from its register for using National Health Insurance Scheme cards for registration, Ghanaian developers have developed a simple and efficient web-portal to check if one’s name has been deleted or not. The portal, machecki.com, makes it easy for voters both at home and abroad to check if their names are included in the list of 56,000 voters the EC struck out from the voters’ register on the orders of the Supreme Court. According to the team of developers, for voters to check if their names are deleted, they should log on to the platform and enter either their voter’s ID, or NHIS card, number. The result would prove whether or not the voters have been captured. Richard Annerquaye Abbey, CEO of Machecki Technologies Ltd., a wholly-owned Ghanaian IT company, said the company was ready to engage with the EC.
Ghana accepts 5-year GHS967.5 million bond Ghana accepted GHS967.5 million worth of bids for a five-year domestic bond issued in July and would pay a fixed yield of 24.75 per cent. Total bids tendered at the sale, which was open to foreign investors, amounted to GHS972.5 million, revealed the lead team consisting of Barclays Bank, Stanbic Bank and Strategic African Securities. Proceeds from the bond will be used to roll over maturing debts as the West African country seeks to restructure its public debt. Ghana’s total public debt stood at US$27.4 billion, representing 66.4 per cent of GDP by May. The government also plans to issue a Eurobond of up to US$1 billion later this year to finance its budget.
Dialogue on youth employment challenges Key representatives of the government, political parties, private sector, students’ bodies, development partners, civil society organisations, academia and the media gathered in Accra and discussed youth employment challenges, and proffered solutions. The dialogue was organised by the African Centre for Economic Transformation (ACET), with sponsorship from the INCLUDE, a knowledge platform that offers insight into policy matters and research issues related to inclusive development. Dr Yaw Ansu, the Chief Economist of ACET, said “If they [youth] are given the right skills and policies that can create jobs, then Ghana has a bright future.” Eben Anuwa-Amarh, who represented the National Development Planning Commission (NDPC), said: “Historical evidence indicates that youth unemployment in Ghana is due to a more than threefold increase in the youthful population over the last 50 years, and also because of the failure of the economy to generate sufficient employment opportunities.”
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GHANA BUSINESS & FINANCE
Mahama inaugurates EXIM Bank board
President John Dramani Mahama has inaugurated a nine-member board of directors for the newly-established Ghana EXIM Bank. The bank is, among other things, expected to move the country from an import-dependent one to a large-scale exporter as it will provide funding to exporters. The board, chaired by Professor Richard Bani of the University of Ghana, includes Mrs Pearl EsuaMensah, formerly of UT Bank, Joseph Enimil-Armah of Enimil Group of Companies and Nana Dr Apiagyei Dankawaso, President of the Ghana Chamber of Commerce and Industry. The other members are Dr Johnson P. Asiama, Second Deputy Governor of the Bank of Ghana, James Tiigah of the Ghana Export Promotion Authority, Emmanuel Mammara of the Ministry of Trade and Industry and Samuel Arkhurst of the Ministry of Finance. The Acting Chief Executive of Exim Bank is Dr Barfour Osei.
Industries demand cheap power for production
The Association of Ghana Industries (AGI) has renewed its call on the government to provide less expensive power sources to facilitate industrial growth in the country. AGI President James Asare Adjei noted that the high cost of power continues to impact on the operations of industries, leading to a decline in the sector’s contribution to GDP. Asare Adjei said the continuous rise in electricity tariffs due to the shortfall in generation was becoming unbearable for industry. He was speaking at the opening of the 1st ECOWAS Industrial Summit held in Accra.
AUGUST 2016
ECONOMY
Cost inflation:
Africa’s serious headache (I) BY CHARLES HEYMANN
Economic is far from a dead stable body of theory and knowledge. It is the research of today that will make the better textbooks and the better world of tomorrow. - Leland Bach, American economist
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ocrates, it is said, once remarked that “If you want to argue with me, first define your terms.” This statement is more valid in our present times than in the ancient days of the Athenian philosopher. Inflation, as an economic term, is more intriguing in definition than many economists today assume. Simply put, a classical definition of inflation is a rise in the price level of currently produced goods and services in the national economy. If this definition serves dialectical purpose as a basic hypothesis, then how come inflation has become the economic headache of Africa? African economies in post-colonial times were invariably dependent on foreign loans, subventions, grants in aid and subsidies to enable governments overcome the huge in-built deficits incurred through internal and external borrowing. These regularly featured in national budgets as formal income, expenditure balance sheets and potential development assets which have received parliamentary
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approval under majority acclamations in order to buttress entrenched political hegemony and ensure the sustainability of political power. This analysis is, therefore, development-focused and underlines the political economic factors and their social effects and associated problems related to speeding the rate of contemporary economic growth. Their back-lash of depression in the economy is increases in taxes, the inability to stimulate investments and reduce the level of unemployment. Other sideeffects are deficit financing, internal fiscal adjustments and deregulation to balance the national budget, while servicing huge accumulated debts incurred through internal and external borrowing. There is a dilemma for African governments as to what to do and not to do in their peculiar underdevelopment predicaments. Accounting terms as cost This analysis, generally speaking, focuses on all development initiatives of African governments, without exception, which manifest in accounting terms as cost
GHANA BUSINESS & FINANCE
centres. This decreases the sum total of returns on the investible capital of the gross national product expected to yield sufficient funds for self-dependent development without resort to internal or external borrowing. These are often occasioned and characterised by profligate spending which, in turn, constitute a vicious circle of recurring inflation - unsustainable and astronomically alarming in proportion. These also assume levels of near impossible management beyond which it is futile for successive governments to resolve under whatsoever economic agenda formulated to attract ‘bail outs’ under the vigilant scrutiny and supervision of the World Band and International Monetary Fund (IMF), or to a lesser degree, the African Development Bank (AfDB), in order to put African economies back on their feet. As currently evident, all these measures turn out to be failed alternatives in borrowing experience, and only perpetuate the dependency syndrome and debt burden, with severe social consequences. The critical irony is the fact
AUGUST 2016
BANKING
Will MPC maintain the 26% policy rate in September? Edited and reproduced below is the Monetary Policy Committee’s (MPC) statement which was presented by Dr Abdul Nasiru Isahaku, the Governor of Bank of Ghana (BoG), after its 71st meeting held on July 15, to the media in Accra on July 18. The statement summarised the MPC’s decision and highlights of the deliberations. The next MPC meeting is scheduled for September 16 -19, with an announcement of the policy decisions. Will the MPC maintain the current policy rate? The Committee has decided to maintain the policy rate at 26 per cent. At the May 2016 MPC meetings, it was noted that headline inflation had declined from 19.2 per cent in March to 18.7 per cent in April. However, with the five per cent upward adjustment in the ex-pump prices of petroleum products and its pass-through effect on prices, headline inflation moved up slightly to 18.9 per cent in May but has since declined to 18.4 per cent in June. These observed trends in inflation over the first half of 2016 have largely been influenced by increases in the prices of petroleum products, utility tariffs and food prices. Since most of these adjustments are cost push in nature, the current monetary policy stance is deemed appropriate, and hence maintained. Core inflation (CPI inflation excluding energy and utility prices) has stabilised in June, indicating some moderation in underlying inflation. The latest consumer sentiment survey, conducted in June, reflects marginal uptick in inflation expectations based on the unanticipated increase in petroleum prices and the recurring energy supply challenges. The recent price developments affirmed the BoG’s earlier forecasts that inflation would peak in the first quarter of 2016 and is currently on a gradual descent. To a large extent, the pace of decline in inflation has been reinforced by the current tight monetary policy stance and stability in the local currency. The BoG’s latest inflation 12
GHANA BUSINESS & FINANCE
Dr Abdul Nasiru Isahaku, Governor of Bank of Ghana
AUGUST 2016
SCIENCE & TECHNOLOGY
Promoting Science, Technology, Engineering and Mathematics through competitions BY NANA AMA BROWNE KLUTSE (Ph.D)
The recent National Science and Math Quiz competition among senior high schools in Ghana saw massive publicity from the first round to the finals. The competition received interesting comments in social media: Twitter, Whatsapp, Facebook, Instagram and others. It caused many people to change their display profile (dp) to either the candidate representing their schools or to the National Science and Math quiz logo. Is this a proof that science and math as a field of study is gaining the needed attention due it in Ghana? Is it because social media is more accessible to many these days than before?
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he National Science and Mathematics Quiz competition started in 1993. At the onset, the competition was sponsored by Unilever Ghana Limited. Its quiz mistress was the late Prof. Marian Ewurama Addy. It is not clear the original drive for instituting the competition. However, it has become clear that the competition is a brilliant idea. Firstly, it created keen and enthusiastic competition among the various participating schools in Ghana. Secondly, it raised the awareness of Science and Mathematics in the country. This was evident in the keen interest developed by people from diverse background. Thirdly, with the quiz mistress being a lady, it served as a source of inspiration for a lot of girls in schools. Many girls, therefore, pursued Science and Mathematics as subjects in the secondary and tertiary levels of
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education. The Brilliant Science and Math Quiz, as it was initially called, had gone through various changes from the sponsorship, producers, organisers to the hostess. The quiz is now called National Science and Math Quiz. It is hosted by Dr Elsie Kaufmann and sponsored by the Conference of Heads of Assisted Secondary Schools (CHASS) with the support of the Ghana Education Service (GES).
education of several students annually and provides an excellent opportunity for developing creative problem-solving skills. During the training and selection of students for the Ghana Math Olympiad, candidates are also prepared to represent Ghana in the International Math Olympiads. Candidates from the Ghana Math Olympiad 2016 participated in the International Mathematics Olympiad held in Hong
Candidates for international competitions There are a number of competitions for Science and Mathematics in Ghana that also select candidates for international competitions. A typical one is the Ghana Math Olympiad which is a competition in mathematical problem-solving for high secondary school students. It enriches the
GHANA BUSINESS & FINANCE
AUGUST 2016
INDUSTRY
At First ECOWAS Industrial Summit
Calls for reconsidering trade liberalisation policies BY MASAHUDU ANKIILU KUNATEH
Ghana’s industries have called on the member states of the Economic Community of West African States (ECOWAS), a group of 15 countries, to reconsider the trade liberalisation policies which give imports unlimited access into the sub-region and which cripple industrialisation. Intra-regional trade among ECOWAS countries is currently below a disturbing 12 per cent.
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orty-six per cent and eight per cent of Ghana’s exports find their way into the European Union (EU), a politicoeconomic organisation of states, and Chinese markets. The situation is similar in other ECOWAS states. James Asare-Adjei, President of the Association of Ghana Industries (AGI), laments: “It is unfortunate that ECOWAS has not been able to enforce a mechanism that forestalls the unilateral imposition of ban on imports by any member country and the failure to adhere to ECOWAS protocols … Our regional integration ought to be more business centred rather than political which is one of the reasons for the
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delays in policy implementation.” He was speaking at the maiden ECOWAS Industrial Summit held in Accra on July 21. The summit was organised by the Ghanaian Ministry of Trade and Industry in collaboration with the ECOWAS Secretariat. It was held on the theme ‘Promoting investment to accelerate the industrialisation of the West African sub-region.’ Whilst ECOWAS political leaders signed protocols to strengthen intra-subregional trade, industries suffer unduly when doing business among themselves in the sub-region in particular, and in the African continent at large. Their counterparts in the EU, Asia and the
GHANA BUSINESS & FINANCE
United States, however, are able to export goods into the sub-region easily because of the trade liberalisation policies. Asare-Adjei believes the benefits of intra-regional trade cannot be over-emphasised, and points out that the EU’s example, regardless of the United Kingdom’s intent to exit it, is worth emulating. “The challenges that we face as a regional bloc are not new. In the course of our advocacy as the leading voice of the private sector in Ghana, our businesses experience challenges which mirror the bigger challenges of our West Africa subregion. These challenges frustrate our development efforts and continue to
AUGUST 2016
COVER
KUTORTSE flies higher with First Sky Group BY AYUUREYISIYA KAPINI ATAFORI
Over the years, First Sky Group has done marvelous work quietly in the respective sectors of the economy in which each of the three companies of the Group operates. First Sky Group has an ultramodern office complex, First Sky Towers, situated in Community 25 at Tema, Greater Accra Region.
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he successful flight of First Sky Group has been piloted by an ambitious, but unassuming, hardworking young Ghanaian entrepreneur. He decided to create employment for himself and many others after he completed tertiary education. From a small one-room office, he skillfully navigated the wavy waters of the construction business to grow into a Group status. Eric Seddy Kutortse is the Group Chairman and CEO of First Sky Group whose subsidiaries are First Sky Construction, First Sky Commodities and Volta Serene Hotel. Commencing with three workers, the Group now employs over 1050 persons. Now, Serene Insurance Company, a new addition to the First Sky family, is expected to begin operations this year.
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FIRST SKY CONSTRUCTION After gaining a Bachelor of Arts from the University of Ghana, Legon, Kutortse conceived the idea of engaging in civil works. He began the construction of roads and bridges with First Sky Construction, a limited liability company. First Sky Construction was registered at the Registrar-General’s Department and given a Certificate of Incorporation in 2002. First Sky Construction has played a leading and active role in the road construction industry in Ghana. Kutortse started the company out of the desire to improve the inadequate operational and project delivery standards in the civil construction industry in the country at the time. First Sky Construction has acquired a modern fleet of heavy earth-moving equipment and trucks and an asphalt plant. It has also set up
GHANA BUSINESS & FINANCE
a crushing plant that executes the work to meet regulatory standards within the scheduled timeline. Managed by a highly multiskilled professional team, First Sky Construction has made significant strides and has gained local and international recognition. For instance, the organisers of the Ghana Business & Financial Services Excellence Awards honoured Kutortse as the Second Overall Best Feeder Roads Contractor of 2009. The other awards are the Group Chief Executive Officer of 2015 and the Most Outstanding Enterprise in Tourism and Hospitality Industry of 2015 which were conferred at the Banquet Hall of the State House in Accra on April 29 by the Entrepreneurs Foundation of Ghana (EFG). The first award recognised leaders and business executives who have
AUGUST 2016
SMEs & MICROFINANCE
How to stop high interest & inflation rates from killing SMEs? BY YAW OHEMENG KYEI
The ultimate aim of every firm is to minimise cost and maximise profit. To minimise cost and maximise profit connotes producing at the lowest possible cost by making competitive payment of wages, rent, interest and tax. It is only after that that a company can maximise profit.
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his basic principle of economics that works in most countries and has made many countries great and powerful economic giants seems to be eluding Ghana for some time now. The unfortunate consequence of this situation is the demise of SMEs as a result of uncompetitive nature of businesses in Ghana and lack of confidence in the economy. The hike in the cost of doing business in the country can be seen in terms of high interest rates, increasing inflation, weak currency, high rent, regressive taxes and miscellaneous costs. Interest rates in Ghana are one of the highest in the world. Ghana’s
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policy rate is currently 26 per cent. In West Africa, Ghana has the highest interest rate. Nigeria’s interest rate averages 9.86 per cent, Cote d’Ivoire’s is around 3.5 per cent and Togo’s is about 3.5 per cent. Once the interest rates are high, the cost of doing business moves up. Interest rates consume about 35 per cent or more of profits in Ghana while elsewhere, they take less than 10 per cent. How can Ghanaian SMEs be competitive? Most countries with lower interest rates use the Fisher Equation in arriving at the interest rate. How are the interest rates in Ghana calculated? Is the Fisher Equation applied differently in different countries? The Bank of Ghana (BoG) must come out to show how the
GHANA BUSINESS & FINANCE
interest rates are arrived at. The Fisher Equation provides the link between nominal and real interest rates: REAL INTEREST RATE = NOMINAL INTEREST RATE + INFLATION RATE. Real rate of interest is the compensation that is needed to induce individuals to forgo consumption today so that loanable funds can be made available to those who need funds for investment. In Ghana, as nominal interest rate hovers around four per cent, and the latest inflation rate in June is 18.4 per cent, then interest rate should be about 21 per cent. But the current interest rate is about 35 per cent.
AUGUST 2016
PERSPECTIVE
What makes a good customer service staff? BY YVONNE OHUI MACCARTHY
There are certain customer service skills that every employee must master if he/ she is forward-facing with customers. Without them, you run the risk of finding your business in an embarrassing customer service train-wreck, or you’ll simply lose some of your most valued customers as your service continues to let people down.
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t is true that a personalised and memorable experience is what makes the customer tick the box of excellent service. For a customer to walk away with the feeling of exceeded expectation, the staff needs some specific skills. There are a few universal skills that every service provider must ensure that its employees have. These skills can, and should be, mastered in order to dramatically improve the service that they provide to customers. Below I’ll cover some of the mostneeded skills to master this incredibly important position of a customerfacing employee. When Human Resource (HR) managers and employers set out to recruit staff for different positions, they focus mainly on employable skills, which are usually not taught in schools as academic subjects but are skills that are mastered with experience. Let’s get into some specific skills that every employee can master to ‘WOW’ the customers that they interact with. Patience If you don’t see this near the top of a customer service skills list, then you are most likely reading about something totally different from customer service. Patience is important to customers, especially those who often reach out to customer service staff when they are confused and frustrated, but it’s also important to the business at large. We’ve shown you before that great service beats fast service every single time. Yet patience shouldn’t be used as an excuse for slothful service either. I believe that ‘slower’ service is the
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interaction where the time spent with the customer is used to better understand their problems and needs from the company. If you deal with customers on a daily basis, be sure to stay patient when they come to you stumped and frustrated. Be sure to take time to figure out what they want — they’d rather get competent service than be rushed out the door! Attentiveness The ability to listen to customers is so crucial for providing great service for a number of reasons. It is not only important to pay attention to individual customer interactions (watching the language/terms that they use to describe their problems), but also important to be mindful and attentive to the feedback that you receive at large. For instance, customers may not be saying it outright, but perhaps there is a pervasive feeling your website isn’t laid out correctly. Customers aren’t likely to say, “Please improve your Website,” but they may say, “I can never find the search feature,” or, “Where is the _____ function?” What are your customers telling you without necessarily saying it to you? Clear Communication Skills Make sure you get to the problem at hand quickly. Understand what you are being told clearly. As a business or a customer-facing employee, you need to be cautious about how some of your communication habits translate to customers. It is best to err on the side of caution whenever you find yourself questioning a situation.
GHANA BUSINESS & FINANCE
An example: The last time I went to get work done on my car, I was told by an employee that if I wanted to get an oil change, it would be ‘included’ in my final bill. I thought that meant I’d be getting it for free, yet as it turned out, that wasn’t the case. The employee apologised and I truly believe it was an accident (they just worked there), but I haven’t been back to that shop because of the miscommunication. When it comes to important points that you need to relay clearly to customers, keep it simple and leave nothing to doubt. Knowledgeability The best forward-facing employees in your company will work on having a deep knowledge of how your product works, the industry and basic customer service techniques. It might be impossible for every single team member to be able to build your product from scratch, but they need to know the ins and outs of how your product works just like a customer who uses it every day. They need to know how your company is affected by things happening in the industry. Without knowing the product and the industry from front-to-back, you won’t know how to help customers when they run into problems. Ability to Use ‘Positive Language’ Your ability to make minor changes in your conversational patterns can truly go a long way in creating happy customers. Language is a very important part of persuasion, and people (especially customers) create perceptions about you and your
AUGUST 2016