GB&F February 2016 by Ghana Business & Finance

FEBRUARY 2016 / ISSUE 057 GH¢10.00

n A clea acts, tr t a a r Acc ts filth but i cts detra

Falling oil price: Stormy months ahead for growth

GTP still glows at 50 years USA..........................................$5.00 UNITED KINGDOM.....................£3.00 EUROPE....................................€3.50 AUSTRALIA.............................AS5.00 CFA ZONE...........................CFA 2,000 OTHER AFRICAN COUNTRIES.US$4.00

THE FIRST BUSINESS READ IN GHANA

CONTENTS ISSUE 057 / FEBRUARY 2016

Private Partnerships reveals how Ghana has fared so far since it started utilising the concept in the provision of its infrastructure.

46 Tourism

27 Education

Accra, Ghana’s capital, serves as the Number One entry point into Ghana for many tourists. GB&F Editor Ayuureyisiya Kapini Atafori discusses how the city’s scenic landscape is sullied with dirt, and the authorities seem clueless about its cleanliness. Will new infrastructural developments change Accra’s unenviable state?

Ghana’s educational system can be turned around to produce the right caliber of professionals, scholars and thinkers to serve as agents for national development and transformational growth.

Front Cover: Kofi Boateng Managing Director of GTP

6 Briefs

Snippets of business and financial stories trending in Ghana, Africa and the rest of the world.

28 Science & Technology

Columnist Dr Nana Ama Brown-Klutse advocates that Ghanaian scientists should use plasma technology for national development.

32 Cover

10 Economy

As Ghana goes to the polls in November with a fall in export commodities prices, declining Foreign Direct Investment, decreasing agriculture output and the manufacturing sector is tottering, tougher times loom.

36 Conference

The total industrial output value of Sub-Saharan Africa accounts for 0.7 per cent of the world’s output. The 4th Ghana Economic Outlook and Business Strategy Conference (EOBS2016) called for massive diversification of Ghana’s economy by weaning itself off dependence on the export of primary commodities.

14 Corporate Progress

Some Ghanaian companies keep losing customers which make them suffer. Columnist J. M. Halm offers what is be done to make them customer-friendly to win more customers, and maintain them.

16 Banking

The Royal Bank has achieved excellent performance in three years of its existence. Find out the bank`s plan to lead the banking sector.

40 SMEs & Microfinance

SMEs need to follow appropriate sectoral best practice that promote good returns on their investments and sustain their viability. Columnist Yaw Ohemeng Kyei outlines various workable actions that could serve as New Year resolutions for SMEs.

20 Finance

The Ghana Stock Exchange is not seeing leapfrogging activities. This is an examination of how a new tax and other anti-developmental policies by the government affect the growth of the bourse.

24 Development

The second part of GB&F Senior Writer Kweku Darko Ankrah`s article on Public-

Ghana`s premier fabrics manufacturer, GTP, has hit 50 years. The company continues to make it fashionable for Ghanaians to adorn its products from the cradle to the grave, despite the challenges of piracy and the counterfeiting of its colourful wax prints.

Columnist Yaw Asamoah critically examines the role of the media, and how they can effectively play their role as agents of socio-economic development.

52 Outlook

Allianz Risk Barometer analyses the changing risk landscape globally for businesses with regard to business interruption, cyber attacks, geo-political instability and technology failures.

54 Perspective

How can relational cultural behaviour be utilised to develop a productive brand? Find out.

56 Events

Visit conferences to be held around the world that interest you and your business.

57 Stats & Indices

Figures speak louder than words for Ghana`s economy.

58 Commodities

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

42 Industry

GB&F ends its series on industrialisation with an interesting chat with Anthony Pile, the former British soldier and the founder of multi-million dollar fresh fruit cutting business, Blue Skies.

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.

JANUARY 2016

50 Business & Management

Industry: page 42

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Editor Ayuureyisiya Kapini Atafori editor@ghanabizfinance.com Senior Staff Writer Kweku Darko Ankrah kdankrah@ghanabizfinance.com Columnists Jerry Halm Yaw Asamoah Dr Nana Ama Browne Klutse Yaw Ohemeng Kyei Contributors Martin Luther C. King Oppong Baah Anthony Sedzro Kennedy Addai Kuffour Adnan Adams Mohammed Design & Production Manager Benjamin Tetteh btetteh@ghanabizfinance.com Circulation & Subscription Ernest Awo subscription@ghanabizfinance.com Editorial Committee Prof. Paul N. Buatsi Prof. Kwame Addo Ms Johanna Awotwi Mr Gaddy Laryea Mr Ray de Bono Mr Nana Robert Mensah Mr Frederick Alipui Ms Dede-Esi Amanor-Wilks Ms Nana Spio-Garbrah Office Location Ghana Business & Finance African Business Media House No. 7 Lamb Street (off Farrar Avenue) Adabraka, Accra, Ghana Mailing Address P. O. Box O 772, Osu, Accra, Ghana Tel: +233 302 240 786 Fax: +233 302 240 783 enquiries@ghanabizfinance.com Brand Advisor Dmax Studios in Malta, EU. (www.dmax.tv) Credits GNA Daily Graphic radioxyzonline.com Mergermarket Group ghanabusinessnews.com

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… What has devaluation got to do with it?

The continuous depreciation of the Cedi has become a worrying matter of life in Ghana since independence. It has been observed that “the depreciation of the Ghanaian Cedi has been a historical economic problem over decades now. Past governments have tried to provide solution to this economic nightmare as the Cedi in each given fiscal year depreciates against the major trading currencies like the US dollar.” The malaise with the Cedi is chronic. Since the early 1980s, the Cedi has been tumbling in value against the US Dollar. And it continues till today when a US Dollar goes for about GHC4. In December 2008, US$1.00 was sold at GH¢1.10, while in June 2009, US$1.00 sold for GH¢1.40. In December 2010, US$1.00 was sold at GH¢1.5. In December 2011, US$1.00 sold for GH¢1.64. In June 2012, US$1.00 sold at about GH¢1.95. Thus between December 2008 and June 2012, the value of the Cedi relative to US$1.00 fell by about 77.3 per cent. In 2015, the Cedi depreciated by 15.7 per cent. The cumulative Cedi depreciation in 2014 was 31.2 per cent, and 14.5 per cent in 2013. In 2012, the Cedi against the US dollar showed a cumulative depreciation of 18 per cent between January and August. Many antidotes have been prescribed for the illness of the Cedi, but the depreciation of the Cedi defies solutions. “This and other valuable proposals have been made over the years by economists, research groups, trade unions, politicians and other stakeholders with the view of providing long standing solution to the cedi depreciation. The worrying trend is that governments over the years only provide short term stabilizing solution to the cedi depreciation through monetary policy restructuring. Again over-politicization of matters of national interest leave the currency depreciation among other pertinent economic problems unsolved. Currency fluctuation is an open economy phenomena and poses a challenge to all economies but with a proper combination of both monetary and fiscal policies with functional public institutions the depreciation of the cedi can be stabilized,” argues one blogger. In attempts to heal the ailing Cedi, some prominent Ghanaians with knowledge and experience in economic management have proffered a particular proposal: devaluation. At the 35th meeting of the Convergence Council of the West Africa Monetary Zone in Accra on January 15, Vice President Paa Kwesi Amissah-Arthur called for the devaluation of the Cedi and other currencies in the zone as a condition to allow the central banks meet a key criterion for adopting a single currency, Eco, by 2020 for the 15-member ECOWAS bloc. After his statement, a debate over the devaluation of the Cedi erupted. “The currency is depreciating anyway [and] we have a situation where we are importing everything, we need to devalue the currency in a controlled manner,” an observer contended. Ken Thompson, CEO of Dalex Finance, a champion of devaluation long before the Vice President’s call, articulated that the import business would collapse when the Cedi is devaluated, thereby benefiting Ghana in the long term. Former Deputy Governor of the Bank of Ghana (BoG) Emmanuel Asiedu-Mante, however, rejected the call. And well-known economist Kwame Pianim too. BoG Governor Henry Kofi Wampah also dismissed the call for devaluation, stressing that the BoG maintained its benchmark policy rate at 26 per cent partly to stabilise the Cedi. Stabilising the Cedi is very critical for a healthy growth of the economy. But stabilising the Cedi is like solving the Sphinx’s riddle. Devaluation has befuddled, puzzled and humbled many economists, bankers and currency experts over the years. As in the past, it is certain that no Oedipus will come to the rescue of Ghanaians by decoding the Cedi conundrum. Thus the depreciation of the Cedi shall go on ad infinitum. Yet the blogger is hopeful: “Ghanaians have [to] come up with coping strategies to deal with exchange rate depreciation, including ... stabilize the cedi and thus make the dollar irrelevant in domestic transactions.” This is wishful thinking similar to an A-Streetcar-Named-Desire aspiration. Ghana’s economy is influenced by the power of the US Dollar. In the presence of a feeble Cedi, dolarisation has taken over the economy. So devaluation or no devaluation, there is no turning back for the Cedi in its plummeting in the face-off against the US Dollar. The Cedi will forever be pummelled by the green buck. May be when the allusive Eco finally becomes legal tender, it would stand on its own against the US Dollar, and be counted among the convertible currencies.

Ayuureyisiya Kapini Atafori Editor (+233 024 2385374)

JANUARY 2016

Mail to the Editor

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

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EDITOR’S SUITE

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

Stabilising the Cedi very critical for the economy

GHANA BRIEFS

Ideal Financial Holdings rescues Korle Bu patients with GHc20,000

Ideal Financial Holdings has presented a cheque for over GH¢20,000 to the Accident Centre of the Korle Bu Teaching Hospital in Accra to support five patients who have been treated and discharged but did not leave the hospital because they could not pay their bills. The patients, some of whom have been discharged in August 2015, expressed joy and gratitude on hearing that Ideal Financial Holdings had come to their recue. Dr Nii Kotei Dzani, Group CEO, said the gesture was part of the company’s corporate culture as a financial conglomerate. “One of our values is caring and each and every day we look for means to care for people who need such care,” Dr Kotei Dzani noted. He added the company was looking at other ways of collaborating with the Korle Bu Hospital to ensure that patients who have been treated and discharged go home. “We want to know what you need and see how best we can help, not just as Ideal Financial Holdings, but to draw the general public’s attention and lead a campaign to clear under-privileged patients.”

Zoetic enters PPA with ECG Zoetic Global has signed a 20-year power purchase agreement (PPA) with the Electricity Company of Ghana (ECG) for an additional 100MW of power at the Akosombo Dam. The Akosombo Dam project, located on the man-made Lake Volta, will aid Ghana to meet some of its growing power needs. Chairman and CEO of Zoetic Global Jerome Ringo commented in a press release: “We look forward to working closely with ECG and other key parties to provide additional power needed to support Ghana’s growth. This project will bring substantial, clean and immediate power online without environmental impact or societal disruption.” The project involves an array of modular hydrokinetic turbines to be deployed in the post-dam wash of the Akosombo Dam. The In-Stream Auger Turbine (IAT) technology being used is designed for high-efficiency power generation from flowing water and will leverage existing infrastructure at the dam site, including grid connections, access roads and on-site maintenance buildings. The project has the potential to be a landmark development in the emerging field of hydrokinetics and a significant new entry into a renewable energy sector dominated by solar and wind technologies. In addition to agreements in Ghana, Zoetic is actively negotiating PPAs in other sub-Saharan African countries as interest in renewables increases across the region.

India’s Liberty Shoes opens first West African shop One of India’s leading footwear manufacturing companies, Liberty Shoes, has opened its first shop in Ghana. The company, which was launched at the Achimota Mall in Accra, is its first branch in West Africa to offer customers durable and affordable footwear. According to Bobby Shawney, the director of the branch, the new line offers all types of footwear, designed and specially made to fit all sizes. The shop, according to him, is “a family store and provides footwear for sexes, children, formal, casual, sports and all occasions.” Shawney said the shoes are made from acclaimed high quality raw materials and leather, with modern shoe manufacturing technologies. He added that plans were underway to establish more shops in the other regions of the country. Liberty Shoes currently operates in 23 countries and has over 6,500 showrooms worldwide.

Central bank rejects Cedi devaluation

Gold, cocoa & crude exports yield US$10 billion in 2015 Ghana’s earnings from the export of gold, cocoa and crude oil in 2015 decreased marginally compared to the value of the commodities the country got in 2014. According to the latest data released by the Bank of Ghana, the country got about US$10 billion in 2015, compared to US$10.7 billion in 2014. The data showed that cocoa exports earned US$2.5 billion for crude oil and about US$3.5 billion for gold. Non-traditional exports yielded US$2.4 billion, slightly lower than the US$2.491 billion in 2011. Gold, which has not been doing well actually brought in more than cocoa and crude oil which have been initially performing well on the international market.

Netflix goes live in Ghana Online movie and television series streaming service, Netflix, went live in 130 countries, including Ghana on January 6. “Netflix is now global. #NetflixEverywhere. Ethiopia, Gabon, Ghana, Gambia, Guinea, Equatorial Guinea, Guinea-Bissau, Heard Island and McDonald Islands,” Reed Hastings, co-founder and CEO of Netflix, announced at the Consumer Electronics Show in Las Vegas, the US.

GHANA BUSINESS & FINANCE

Bank of Ghana governor Dr Henry Kofi Wampah has rejected calls for the central bank to devalue the Cedi ahead of the establishment of a common monetary zone by six West African countries. According to Dr Wampah, the Cedi’s rate has responded to market conditions which make it unnecessary for the currency to be devalued. Recently, there has been heightened debate over the devaluation of the Cedi and other West African. Last month, Vice President Paa Kwesi AmissahArthur supported the devaluation of the currencies. Also, Ken Thompson, CEO of Dalex, who has been championing devaluation, insisted that the devaluation would help the country allocate its resources appropriately. But Dr Wampah argued that the Cedi has not gotten to the point where it should be devalued.

JANUARY 2016

ECONOMY

Stormy months ahead for growth … As continuous oil price slump slows pace BY MASHOOD A. KUNATEH

Ghana is in tough times this year. Export commodities prices are falling, foreign direct investments (FDIs) are declining, agriculture is decreasing and the manufacturing sector is almost dying. As if to aggravate things, a stiff and seeming do-or-die electoral competition looms in November. The Cedi is rapidly depreciating against Ghana’s major trading currencies such as the United States (US) Dollar, British Pound Sterling and Euro.

he outcome of these challenges will affect Ghanaians in the months ahead of the second quarter of the year. With increased taxes and tariffs, the situation is worsening day by day. The prices of various basic goods and services such as cereals, poultry products, cooking oil, sugar, pharmaceutical products, milk, utilities, among others, have skyrocketed to the point that many salaried workers cannot afford. The rising cost of these consumables and services has been mostly blamed on the government’s inability to keep the local currency stable. For instance, as at the time of going to press, the Cedi traded at GHc3.98 against the US dollar. Some currency analysts are predicting

that the Cedi is likely to hit GHc4 against the US Dollar this month. This, the analysts explained, is because most goods imported for the Christmas and New Year have almost ran out of stocks. So traders will have to import new goods in January and this month. They start the process by buying more US Dollars from the commercial banks and the black markets to enable them import various goods into the country. Last year, the Cedi depreciated 26 per cent in value against the US Dollar, while on a yearto-date basis, it depreciated by 15.5 per cent as at October 2015, compared to 31.2 per cent in the corresponding period in 2014, according to the Bank of Ghana (BoG).

GHANA BUSINESS & FINANCE

Analysts, including John Opoku, are worried that the country is witnessing massive depreciation of the Cedi as tension packs to the November elections. Although the current government has assured that it would not overspend in this election year, its recent past experience left many Ghanaians, especially political parties, civil society organisations and the international community, being sceptical. For instance, Ghana recorded one of the worst budget deficits in 2012 which was attributed to the presidential and parliamentary elections held that year. The budget deficit of 12.1 per cent of Gross Domestic Product (GDP) was nearly doubled, with revised estimates in July 2012 of 6.7 per cent of GDP. The deficit came close to that of the

JANUARY 2016

FINANCE

Struggle for survival:

Capital market wants more incentives, not taxes (I) BY ADNAN ADAMS MOHAMMED

There have been profuse developments in stock markets all over the world recently. The 21st century has seen interesting changes in the stock markets in developed and emerging economies. But capital market players in Ghana are not celebrating. Why? They say the government’s policies are anti-developmental to the growth of the Ghana Stock Exchange (GSE).

he players are, therefore, calling on the government to either reduce or totally reverse the capital gains tax which it recently introduced for persons who sell assets such as stocks or property and make money from the sale to pay. They explain that the tax defeats the growth potential of the local bourse which is the least liquid market in West Africa. They are calling for juicy incentives to ignite the interest of investors in the stock market. “The imposition of a capital gains tax makes Ghana the only market in the region

that has a capital gains tax on listed securities, and will deal a competitive blow to the GSE. We are about to see foreign investors flee Ghana’s equity market,” posits Dr Sam Mensah, Chairman of the GSE. Some players view Ghana’s market as the least attractive. Much, they argue, needs to be done to improve the activities of the GSE. According to Abena Amoah, an investment banker at Baobab Advisors, “We are competing with other markets in Nigeria and the West African francophone capital markets for investment. The challenge

GHANA BUSINESS & FINANCE

here also is that 70 per cent of our market trading comes from foreign investors. In any case, the Ghana market is the least attractive of the three major markets in the sub-region because we are not as liquid as the other markets and we have fewer companies listed in comparison. That means we are driving them away,” she adds. Amoah, in an interview with GB&F, notes that even without a tax, the capital market struggled last year. She says with investors looking for the best returns in an economy that has a weak currency that whittles away the value

JANUARY 2016

COVER

GTP still glows at 50 years Fabrics manufacturer, GTP, has adorned Ghanaians from the cradle to the grave with its colourful GTP and Woodin wax prints. Despite the challenges of piracy and fake textile products from the Far East threatening its business, there is plenty for GTP to celebrate at 50 years of its existence.

n January 19, there was an unusually large gridlock at Tema Community Four Roundabout. The morning breeze coming from the nearby Atlantic coast, and the sea of workers dressed in GTP’s anniversary cloths made the premises of Tex Styles Ghana Limited, formerly referred to as GTP, a colourful spectacle. GTP was celebrating its golden jubilee. The day saw the company’s factory hosting a photo exhibition which depicts the company’s 50 years history, a fashion show and a variety of speeches from eminent persons. The dignitaries who graced the

celebration included Kweku Ricketts Hagan, outgoing Deputy Minister for Trade and Industry; Sherry Ayittey, Minister for Fisheries and Aquaculture; Nii Laryea Afotey Agbo, Greater Regional Minister; Dr Joyce Aryee, former CEO of the Ghana Chamber of Mines; John Alan Kyerematen, former Trade and Industry Minister; Ishmael Yamson, former Unilever CEO; GTP Director; and a host of other Ghanaian corporate titans. ANTHONY SEDZRO interviewed Kofi Boateng, the Managing Director of Tex Styles, who was forthright, passionate about the operations of GTP and optimistic about the company’s future.

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GB&F: GTP is celebrating its Golden Jubilee this year. Can you give us a brief history of the company? Kofi Boateng (KB): Tex Styles Ghana Limited which is popularly referred to as GTP was formerly known as Ghana Textiles Printing Company Limited, hence the acronym GTP. This company, which is the foremost textiles manufacturing company in Ghana, was established as part of Osageyfo Dr Kwame Nkrumah’s import substitution drive. It was incorporated in 17th January 1966, hence we are now fifty years. Fifty years is a great milestone. While it provides an occasion to celebrate, it also gives us also a solemn

JANUARY 2016

PHOTO GALLERY

Ghana Economic Outlook & Business Strategy Conference (EOBS 2016) was a resounding success 1. Participants listening attentively to a presentation 2. H.E. William Hanna (left), Head of EU Delegation to Ghana, sitting with other dignitaries 3. H. E. Sun Baohong, Chinese Ambassador to Ghana; Dr Ekwow Spio-Garbrah, Minister for Trade & Industry; Valentina Mintah, CEO of West Blue; and Seth Terkper, Minister for Finance 4. Samuel B. Adongo, Dep. Executive Director, TechnoServe; Kate Quartey Papafio, CEO of Reroy Cables; Jerry Shaye, Shaye Global LLC; Kwame Gyan, a lawyer and energy expert; and Emmanuel Asiedu, CEO, GRATIS Foundation 5. Frederick Alipui (left), Managing Director, Afriwest Consult, Dr Henry Alhassan (middle), a Director at EDAIF, and other attendees 6. Some participants enjoying one of the sessions 7. Dr Kwabena Adjei, Group Chairman of Kasapreko, making a point during a discussion 8. James Asare Adjei, AGI President, speaking 9. A gathering of some participants 7

GHANA BUSINESS & FINANCE

JANUARY 2016

The total industrial output value of Sub-Saharan Africa accounts for 0.7 per cent of the world’s output.

These are the challenges Ghana has to deal with if it must steadily grow its industrial capacity. This requires urgent practical action as well as critical collaborative steps to ensure that the country promotes innovative strategies for harmonising and developing the nation’s resources for sustainable industrial and economic transformation. These, she articulated as the chairperson of the opening session of EOBS 2016. Mintah expected the country to reflect collectively on the policy and regulatory environment, as well as access to capital, technology, skills and power. Advantage?’ The topics were exhaustively digested by the speakers, including Dr Ekwow Spio-Garbrah, Minister for Trade and Industry, Seth Terkper, Minister for Finance, and Dr James Asare Adjei, President of the Association of Ghana Industries (AGI). Industrialisation: key to growth Taking her bite on the topic ‘Industrialisation, Impetus for Ghana’s Economic Development,’ Valentina Mintah, the CEO of West Blue Consulting Limited, argued that the dwindling fortunes in the commodities, especially the oil and gas sector, present African countries the opportunity to diversify their economies and speed up industrialisation. In Mintah’s words, “Industrialisation clearly offers the most reliable route for economic growth and sustainable development but we have in the past paid more lip service than JANUARY 2016

practical sustainable action to growing our industrial sector as a nation. We have a great opportunity to rapidly realise the potential of this critical area, by fast-tracking the implementation activities of the 2011 Industrial Policy.” It is reassuring to note that, according to the Ghana Statistical Service, industry accounted for 28.4 per cent of the country’s GDP as a distribution by economic activity in 2014 and agriculture accounted for 19.9 per cent. When further broken down, manufacturing, however, accounted for 5.9 per cent of the industry total while construction accounted for 12.3 per cent, mining and quarrying 9.1 per cent and crude oil 6.0 per cent. In comparison to the other countries, the industrial sector accounted for about 40 per cent in Germany and France. Yet over the years, successive Ghanaian governments have emphasised the

Critical SMEs & middle-tiered enterprises In this vein, robust policies that encourage SMEs and middle-tiered enterprises are critical. A focus on companies that can quickly achieve backward integration and import substitution via value addition are key. An additional focus on science and technology education on a long-term basis in the educational curriculum would be important as well as technical skills development for mid-level technicians. An intervention fund for the sector by government and relevant financial institutions is also necessary. Ghana’s Industrial Policy sums this up by looking at the implementation of the full spectrum of industrial policy instruments across 21 Policy Thematic areas categorised into four main components of Production and Distribution; Technology and GHANA BUSINESS & FINANCE

CONFERENCE

importance of industrialisation to grow the economy, but to all intents and purposes, they have not “hit the spot” to enable the country achieve the growth potential of the industrial sector. She added: “This is buttressed by the fact that the people, processes, policies, and technology platforms do not sufficiently reflect the needs of actors in a sector that requires long gestation periods, heavy investments, policy coherence and consistency and predictability of the legal and investment environment.”

Business Media (ABM), publishers of GB&F, the only monthly magazine in Ghana. The theme of EOBS 2016 was: ‘Industrialisation: Impetus for Ghana’s Economic Development.’ Some of the topics include ‘Implementing the Current Industrial Policy: Challenges and Way Forward;’ ‘Accelerating Sustainable Financing for Agro-based Industrialisation;’ ‘Adaptive Strategies for Innovation and Technological Industrialisation - The Case Study for Light Manufacturing in Ghana;’ and ‘Accelerating Industrial Growth with Promotion of Made-in-Ghana Goods: What is Ghana’s Competitive

TOURISM

A clean Accra attracts, but it’s filth all over BY AYUUREYISIYA KAPINI ATAFORI

The most used point of entry into Ghana for many tourists is Accra. Accra, by virtue of it being the capital city, has the country’s real international airport. From the windows of their landing planes, tourists’ eyes feast on the deceptively beautiful scenic landscape below. Welcome to Accra! Accra: a peaceful place to party and profit.

ut Accra is a mixture of beauty and dirt: upperclass, plush Trassaco coexists with kiosk-type and Chorkor-like slums in the city. The class contrasts are cruelly stark in the city: The neighbouring upscale Airport Residential Areas and the ghettoic Nimas and Mamoobis. At all the relatively uptown vicinities such as Spintex Road and Manet Estates, blemished spots like kiosks, scrubs/ bushes and noise detract the beauty

and serenity of these residential areas. Commercial and industrial activities even take place in some of these residential areas. And pollution does occur. Implementation challenges are frustrating change, and the situation is sure to continue for a long time. And that means, unless something urgent, drastic and practical is done about the cleanliness of the city, Accra will remain filthy, in the main. Tourists who come from, or have visited, cities which are historic,

GHANA BUSINESS & FINANCE

world-class and attractive, more often than not, get a culture shock, especially the first timers, in Accra. The tourists are taken aback with the sight they see when they step out of the relative glamour of the airport and take taxis bound for their destinations in Accra – hotels, guesthouses or friends’ abodes. Even the tourist with the least percipience quickly arrives at the conclusion that Accra is a dirty, but nice, place to live in. As the tourists walk on the pavements and paths, drive or are chauffeured on

JANUARY 2016

OUTLOOK

Global business risk landscape in 2016

Generally, the risk landscape for businesses is substantially changing in 2016. Globally, business interruption (BI) remains the top risk for the fourth year in succession, with cyber attacks, geo-political instability and technology failure being new potential drivers of BI losses. Competitive market environment and cyber incidents appear in the top three global business risks for the first time. Companies are worried about the increasing sophistication of cyber attacks, but tend to underestimate technical IT failure as a cause of costly outages.

hile businesses are less concerned about the impact of traditional industrial risks such as natural catastrophes or fire, they are increasingly worried about the impact of disruptive events, fierce competition in their markets and cyber incidents. These are key findings of the 2016 Allianz Risk Barometer, the fifth annual survey on corporate risks published by Allianz Global Corporate & Specialty (AGCS) which surveyed over 800 risk managers and insurance experts from more than 40 countries. Top business risks for Africa and the Middle East are appearing for the first time with macro-economic developments, market developments and changes in legislation and regulation leading the way. According 52

to the Allianz Risk Barometer, the top three leading risks for businesses in Africa and the Middle East are macro-economic developments (44 per cent), market developments (44 per cent) and changes in legislation and regulation (32 per cent). Political risks (war, terrorism and upheaval) rank higher in the Afro-Arab area than any other region. The area is the only one to rank power black outs (10th) in the top 10. These risks are appearing for the first time for Africa and the Middle East. Last year’s Africa and Middle East responses were included as part of Europe, Middle East and Africa region. “The biggest contraction in global trade since the financial crisis, BRICS and other emerging markets hitting a wall and a subdued knock-on-effect from the drop in commodity prices help ensure

GHANA BUSINESS & FINANCE

market and macro developments rank highly in this year’s Risk Barometer,” says Ludovic Subran, chief economist at trade credit insurer Euler Hermes, a sister company of AGCS. Cheaper commodity prices South Africa, Brazil, Russia, Nigeria and Malaysia are among those countries which have been negatively affected by cheaper commodity prices. “However, it is fascinating to see that, in many cases, the decline in oil and gas, iron ore and steel prices has stressed the supply chain more than it has benefitted it,” observes Subran. “Sectors such as construction for example, have not done as well as anticipated because of structural difficulties. Further, some sectors, such as machinery and equipment, have seen the collateral damage of plummeting JANUARY 2016