GB&F July 2014

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JULY 2014 / ISSUE 038 GH¢10.00

Tourism:

Build the experience and they will come

Footba ll:

Do hos nation t really w s in?

New king New way

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

Mawuli Agbesi seeks new paths for NIB THE FIRST BUSINESS READ IN GHANA

Follow us online at www.ghanabizfinance.com

20... Cover

GB&F

The new Managing Director at the state-owned National Investment Bank has set his sights on commercial banking, eager to breath new life into Ghanaian banking’s sleeping giant. He discusses his vision and mission with Ghana Business and Finance.

General Manager Josiah Spio-Garbrah jspiogarbrah@ghanabizfinance.com adverts@ghanabizfinance.com +233 264 510 396 Editor Eric Kwame Amesimeku eamesimeku@ghanabizfinance.com Deputy Editor S. Kwame Appiah kappiah@ghanabizfinance.com Columnists Jerry Halm Yvonne MacCarthy Julius Caesar-Tokoli 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

24... Banking and Finance

JULY 2014 / ISSUE 038 Front Cover: Mr. Mawuli Agbesi MD, National Investment Bank

Contents 6...

The lottery industry could become an unwitting avenue for money laundering if certain steps are not taken.

26... With the VAT on (some) financial services set to take off, we examine the legitimacy of fears expressed by financial service providers.

Briefs Business and finance news from Ghana and Africa in the past month. Includes corporate movements.

14... Economy Ghana is looking at raising a third Eurobond to finance its infrastructure needs. Is it one time too many?

17... Jobs remain a key concern for the Ghanaian economy, despite impressive growth statistics.

What could be wrong?

Dmax Studios in Malta, EU. (www.dmax.tv)

Banking & Finance: Page 24

28... Tourism and Hospitality The experience economy has vital clues for how tourism in Ghana can finally find its mojo.

Credits GNA myjoyonline Daily Graphic Bloomberg radioxyzonline.com citifmonline Mergermarket Group Corporate Council on Africa ghanabusinessnews.com

34... In Focus

Ghana Business & Finance magazine is published by

Economy: Page 17

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.

JULY 2014

ASN Properties is on a quest to bring home ownership into the reach of many more Ghanaians than is currently possible. 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

52... Executive selection Vacancies from the top tier of corporate Ghana.

53... Outlook Will Russia and China unite to end ‘The American Century’?

Management: Page 46

37... ICT A look at Ghana’s move towards a cashless economy and how electronic systems are helping to make that possible.

40... Sports Does hosting football tournaments deliver economic results?

42... Infrastructure What does the Ghana Infrastructure Fund mean for the country’s infrastructure gap?

44... Management Businesses must do more than satisfy if they want to keep their customers.

46... Customer service is everyone’s job at the workplace.

49... Is competition really the way to

56... Toolkit A review of the 2014 Jeep Grand Cherokee EcoDiesel.

get ahead in the business?

57... Stats and Indices 51... Conferences and Events Events from around the world to fill your diary

Infrastructure: Page 42

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Outlook: Page 53

GHANA BUSINESS & FINANCE

Ghana’s economy numbers.

by

the

58... Commodities Prices as compiled by Esoko.

Toolkit: Page 56

JULY 2014

EDITOR’S SUITE

Cometh the hour...

Over the last few months, this magazine has had the uncomfortable duty of covering what has seemed to be an unending stream of bad news about the Ghanaian economy.

Our confidence stems from the very people that it is our privilege to interact with in the performance of our duties.

It comes from the entrepreneurs and business executives of Ghana who daily seek to turn their companies around. It comes from the willingness of these people to face the challenges – many of which are not of their making – and still succeed. Our confidence comes from the leaders of corporate Ghana, who shun the ordinary, are determined to make a mark in the face of adversity and everyday, work to build enduring legacies for generations unborn.

As avowed supporters of Ghanaian businesses and business people; and above all, Ghana, this is a duty we have performed with a heavy heart. In the course of our duties, we have had to confront dire analysis about the missteps that have brought us here. We have sat with captains of industry who have never been so pessimistic and we have listened to young entrepreneurs willing this economy better that they may be able to fully unleash the creativity they are imbued with.

There are times that even we have despaired.

As we go to press this month, the country is in the throes of a fuel shortage, another avoidable disaster that is sadly symptomatic of the lack of inventiveness that that continues to be displayed by the nation’s managers at various levels. In the coming month, financial service providers – and their users – will have to adjust to paying Value Added Tax on certain services. Even before getting into the dubious advantages of such a move, it is clear that the confusion that surrounded its introduction gives little confidence to one of the few sectors of the economy that has consistently posted positive results. In preparing this issue, we have had to confront the power shortages that have now become a distinguishing feature of Ghanaian life.

Yet, we remain confident.

JULY 2014

One of such men is on our cover this month. Mawuli Agbesi, the new Managing Director of the National Insurance Bank, has set himself the task of reinventing the fifty-year old sleeping giant that he now heads. Some may have opted to quietly fill in the hours, keeping their heads down and leaving the boat still.

Not so, Mr Agbesi, who believes that the bank that he leads must be different – and better – when he leaves it. It is people like Mr Agbesi who give us confidence.

It is people like him that must inspire those in government as they seek to bring this economy back from the brink. The current challenges, borne of decades of errors, must be seen as an opportunity to revise the playbook and give this country a new settlement. One that will cut out the waste, see greater efficiency in public finances, seek innovative ways to finance productive infrastructure, secure long term fiscal stability and give the private sector the needed support to thrive.

It is the time for leadership and we hope we can find as much of it in the public sector as we find in the private sector.

We hope you enjoy the issue.

Eric Kwame Amesimeku Editor Tel: 0244 985 098 Email: kwame.eric@gmail.com

GHANA BUSINESS & FINANCE

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BRIEFS

Company reports

SIC Life pays dividend to government premium on hard work, total commitment to duty, strong business ethics and prudent risk management, the company continues to reap greater dividends for its stakeholders and retain its position as the number one life insurance company in the Ghanaian Insurance industry.

SIC Life, the state-owned insurance provider, has presented a total amount of GHc 2.2 million as dividend to the Ministry of Finance. Professor Joshua Yindenaba Abor, chairman of the company’s board stated during the presentation that the company made a profit after tax of GHc 9,288,162 representing 83 percent growth. The amount paid as dividend represents 80 percent of GHc 2,789,449.00 which had earlier on been agreed as total dividends to shareholders.

Hon. Cassiel Ato Forson, Deputy Minister of Finance who received the presentation commended SIC Life for its impressive growth in the face of stiff competition with private insurance

companies for insurance businesses of state-owned institutions. The Minister also assured the company of the Government’s support in ensuring the company achieves its mission of “employing a highly motivated and efficient workforce to offer innovative, value-priced life insurance and other financial products whilst ensuring optimal returns to our shareholders”.

Speaking at the company’s Annual General Meeting earlier, Aaron Issa Anafure, Managing Director stressed that the management team has “conscientiously carried out the mandate to tactically position the company within the life insurance industry of Ghana.” By placing

He also expressed appreciation for the meritorious efforts of the Management, Staff and Sales Force, which won the company the CIMG Life Insurance Company of the Year 2012 with its Final Journey Plan as the Best Radio Advert of the same year. It was also rated as the 45th member of the Ghana Club 100.

Mr. Anafure also added that, the company’s subsidiary, SIC Life Trust Finance Ltd. which was incorporated on 27th July, 2010 to offer financial solutions to Sika Plan policyholders of SIC Life and to slow down disinvestments of its unique insurance products increased its total assets significantly from GHc 8.1 million in 2012 to GHc 30.8 million in 2013.

GOIL pays out dividends to shareholders The Ghana Oil Company Limited (GOIL) has declared dividend per share of GHc 0.016 for 2013, up from GHc 0.015 in 2012. In 2013 there was a GHc 20 million bonus issue of shares to shareholders, thus increasing the number of outstanding shares from 210, 186, 240 to 252, 223, 488. This resulted in an increase in dividend payable by 28 percent.

The total dividend to be paid would move from GHc 3,152,796 for 2012 to GHc 4,035,576 for 2013, Professor William A. Asomaning, GOIL Board Chairman, said at its 45th Annual General Meeting (AGM) of Shareholders in Accra. He said the continuous improvement in the performance of the Company had resulted in increased profitability in recent times.

On the company’s financial contributions to the government, Prof Asomaning said over the past year the Company honoured all its due financial obligations to the government. It increased the 2012 payout to the

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government by 12 percent, with a contribution of GHc 82.313 million.

These include GHc 76.956 million on customs duties and other levies (up from GHc 68.585 million in 2012); GHc 3.743 million in income tax (as against GHc 2.894 million in 2012); and dividend payment GHc 1.608 million (an increase on GHc 1.500 million paid in 2012).

On Sales Performance, Prof Asomaning said despite the challenging economic conditions, the underlying strengths of GOIL’s brand and leading market position remained unchanged as the company managed to increase its volume of sales by 8 percent compared to the year 2012.

He said this was about four percent above that of the industry. The products that contributed to this achievement were gasoline and diesel. Aviation jet fuel performed extraordinarily well, recording a 61 percent growth, though national consumption fell by seven percent.

GHANA BUSINESS & FINANCE

“Recognizing GOIL’s growth prospects as being dependent on the prudent management of the retail fuel sector, the Board and Management implemented a number of changes and initiatives to streamline operations at the forecourts,” he said.

In 2013, GOIL constructed 17 stations that are six company-owned and 11 joint venture stations with the characteristics of the new brand image. In response to the challenges brought by increased competition, with over 80 oil marketing companies operating in the country, a programme for pump replacement and rotation was implemented, resulting in better and more reliable fuel delivery at the GOIL stations, boosting customer confidence and loyalty.

JULY 2014

The chart captures the average daily rate of depreciation of the Cedi against the US dollar, the Euro and the Pound Sterling. The following can be observed: 1. From 2007 to 2010, the GHc depreciated at varying rates to the three currencies, indicating perhaps that the value of the cedi – and by extension the confidence in the economy – was independently and variously determined.

2. After 2010, there appears to be a convergence, which could be evidence of a wider agreement in the markets about the state of the Ghanaian economy’s fundamentals.

3. The daily depreciation rate between 2013 and 2014 seems to have taken a turn for the worse.

VAT CHARGEABLE SERVICES The Ghana Revenue Authority (GRA) has released the list of services that would attract the 17.5 percent Value Added Tax (VAT) and National Health Insurance Levy (NHIL). The GRA in a letter to Bankers and Banks said the 32 fee-based services would attract the tax from July 1, 2014. Below is the full list of services to attract the tax.

1. CURRENT ACCOUNTS (Foreign/Local) – CORPORATE BODIES ONLY 2. BANK DRAFT (PAYMENT ORDER) 3. STOPPED CHEQUES 4. RETURNED CHEQUES 5. COMMISSION ON TURNOVER (CORPORATE BODIES ONLY) 6. OVERDRAFT PROCESSING OR RENEWAL FEE 7. REVOLVING ACCEPTANCE CREDIT 8. ARRANGEMENT FEE FOR FACILITIES 9. STATEMENTS AND CERTIFICATES OF BALANCE 10. CLEARING CHARGES 11. CHEQUES FOR COLLECTION 12. STANDING ORDERS 13. TELEPHONE BANKING 14. SAFE CUSTODY 15. CHEQUE BOOKS - Sale of cheque leaflet - Replacement of Lost Cheque Book 16. DEBIT CARDS AND CREDIT CARDS 17. REVOLVING CREDITS 18. COLLATERAL MANAGEMENT 19. TRANSFER OF DOCUMENTS TO OTHER BANKS 20. GUARANTEES/BONDS/TENDER/PERFORMANCE 21. REQUEST FOR FOREX DRAFTS 22. OUTWARDS TRANSFER: SWIFT/TELEX - Drafts/Money Orders – Customer 23. TRAVELLERS CHEQUES, DRAFTS 24. CHEQUE LODGEMENTS – (FOR CORPORATE BODIES & THIRD PARTIES ONLY) 25. REMOTE BANKING SERVICES - Online Banking (Internet) - E-statements - E-clients - Phone banking - SMS banking - Mobile Banking - Monthly subscription - Financial Transaction Fee

JULY 2014

26. EVACUATION FEE (CASH-IN-TRANSIT) 27. UNPAID STANDING ORDER 28. CLOSURE OF ACCOUNTS 29. LENDING FEES - Commitment Fee (Arrangement fee, Processing fee, facility fee) - Processing Fee - Property Valuation Fee (Open market value) - Guarantee Commission - Bid Security - Bank Credit Letter (Letter of Intent) - Mobilization Guarantee - Retention Guarantee - Performance Bond - Default or restructured 30. OTHER LOANS, EXCLUDING SALARY ADVANCE - Arrangement Fees - New Loans - Top-Ups - Early Settlement Fees 31. LETTERS OF CREDIT (IMPORTS) Establishment Commission - Arrangement Fee Presentation under L/C Drawings Amendments: - Increase in Amount - Extention of period - Extention of period – another quarter - Discrepancy Other amendments: 32. DOCUMENTARY BILLS FOR COLLECTION (IMPORTS) Handling charges – customers Negotiation Commission - Advice of fate - Bills deleted - Protest Payment Commission - Holding charges (per quarter) Prior Approval – Customers with: - Own Resources - Telex/Cable charges - Swap charge Customers allocated funds from Bank; ExchangeTelex / Cable charges

GHANA BUSINESS & FINANCE

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BRIEFS

CEDI DEPRECIATION TRENDS

BRIEFS

SME finance

Union Savings and Loans launches SME Clinic efforts on segments of the market that lack the needed attention and expertise from the “regular” financial services sector.

Union Savings and Loans, one of the fastest growing providers in the micro-finance sector, has launched a service to provide management advice to its clients. The service, dubbed SME Clinic, is in response to what the company sees as lapses in the administration of many Small and Medium sized Enterprises that lead to their inability to secure financing or in some cases, their procuring the wrong financial products.

The service is in line with Union’s business philosophy of successfully combining commercial objectives with a strong development agenda by focusing its financial intermediation

Other companies that are partnering the financial service company in the project include Vodafone Ghana, Millennium Insurance, and KPMG which will provide Business Advisory services.

Under the service, clients will receive regular formal classroom training in monthly sessions at the clinic training room in the company’s Dzorwulu head office. This will be facilitated by Union’s internal managers, experts from partner institutions and when necessary, external experts. The schedule and content will be planned quarterly based on learning-need analysis.

SG partners EIB to support SMEs

A “Big” Quarterly SME Clinic will also be organized in the last month of every quarter in regional capitals across the country. These will be used to address issues in the business world in language that the average entrepreneur can understand.

Business centres will also be created at selected branches, including the head office branch, to provide meeting rooms; Internet access; printers, scanners and photocopiers; key business technologies; and a library to entrepreneurs who may not have these in their own offices.

The Business Centre is thought to be a combination of Business Club and Priority Banking, where participants will be assigned relationship managers and have access to the business centre to do business.

on exporters. Adding that, SG Ghana will continue to offer developmental support to the local financial sector.

The new lending programme by the European Investment Bank will allow SG Ghana to provide loans in Euros and US dollars for up to 10 years. This represents a much longer maturity than currently usually available.

The European Investment Bank (EIB), Europe’s long-term lending institution has agreed to provide EUR 20 million to Societe Generale Ghana (SG Ghana) to support investment by small and medium sized private sector companies in Ghana and further develop the financial sector in the country.

This is the first initiative within a planned EUR 80 million European Investment Bank programme expected to leverage at least EUR 160 million investments across the country. It is expected that following SG Ghana, other leading banks in the country will soon join the programme.

According to Pim Van Ballekom, the EIB Vice President for sub-Saharan Africa, the European Bank is pleased to work together with Societe Generale

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Ghana and build on the success of similar cooperation with other banks both in Europe and across Africa.

The new engagement is expected to increase investment by the private sector, an essential ingredient for economic development and reducing poverty in Ghana.

“The Europe Investment Bank is committed to supporting the financial sector in Ghana and stimulating private sector development across Africa” Mr. Van Ballekom told journalists in Accra at the unveiling of the partnership.

In a welcome address, the managing Director of SG Ghana Gilbert Hie stated that the 10-year credit facility would provide long-term financial support for SMEs at cheaper rates with focus

GHANA BUSINESS & FINANCE

Lending under the scheme will focus on high added-value sectors including agriculture, manufacturing, construction, transport, education and healthcare and reinforce crucial long-term investment by Ghanaian companies to help them create jobs.

The European Investment Bank agreed the new SME lending programme with SG Ghana following an earlier successful scheme in 2007.

Apart from SME support, the EIB’s engagement will help improve the banking sector in Ghana through backing expansion of branch networks, IT systems and staff training. The EIB loan to SG Ghana will as well fund the bank’s capital expenditure in its headquarters building and five new branch offices in the country that will enhance banking services available to private sector companies.

JULY 2014

Investment

BRIEFS

Cedi

BOG advocates retention accounts for extractive MNCs; reviews directives

Ghana ranks 4th in African investment destinations

The Bank of Ghana (BoG) has recommended to the government to review existing agreements with the mining and oil and gas companies to open and operate retention accounts with the BoG or any commercial bank in the country.

A United States based economic advisory firm, Frontiers Strategy Group has ranked Ghana as the 4th most preferred investment destination on the continent after Angola, Kenya and Nigeria.

The move is to help reduce capital flight that has brought pressure on the cedi and consequently led to a loss in its strength against major trading currencies such as the dollar.

The Head of Financial Stability at the BoG, Dr Benjamin Amoah, at a news conference in Accra yesterday, said the central bank would guarantee the companies the availability of foreign exchange within 24 hours of request.

“All new retention agreements should require retention accounts to be opened and operated with domestic banks. The BoG will engage the Ghana Investment Promotion Centre, the Ghana Free Zones Board, the Minerals Commission and other stakeholders in this regard,” he said.

According to Dr Amoah, the central bank was also recommending that all foreign exchange proceeds of government agencies be lodged with the BoG, instead of keeping them with off-shore banks.

The BoG has also reversed some of the foreign exchange rules it introduced in February this year to stabilise the cedi against depreciation.

One of the rules was that customers were not allowed to make withdrawals of more than USD 10,000 over the counter without proof of travel.

However, per the revision, customers can make large transactions over the counter, provided they prompt their banks a couple of days before the withdrawal. Meanwhile, they can only withdraw up to USD 1,000 over the counter without prompting their banks.

“This is a cedi-denominated economy; if you want cedis, your bank can get it, but if it is in foreign currency, you need to prompt your bank. If it’s a large transaction, you need to prompt your bank. But for now only USD 1,000 is permitted,” Dr Amoah said.

Under the previous rules, banks were not allowed to give out foreign exchange loans. However, the BoG has revised JULY 2014

that law and will now allow banks to give loans in foreign currency.

Also, the threshold for transfer abroad without initially submitting documentation has been increased from USD 25,000 to USD 50,000 per the revision. Documentation on that transaction must be provided within 90 days.

The BoG will now allow businesses that provide services for non-resident Ghanaians to use dollars.

Exporters of goods and services can now also receive payment in foreign currency from non-residents. This means hotels, educational institutions, among other bodies, may receive payments from non-residents in foreign currency.

The prohibition of offshore currency transactions by resident Ghanaian companies, as well as restrictions that require exporters to collect and repatriate in full the proceeds of their exports to their local banks within 60 days of shipment, has also been relaxed.

The 60-day mandatory repatriation of export proceeds has been reversed and aligned to the terms agreed between trading partners.

The five-day mandatory conversion of export receipts in Ghana cedis has also been reversed.

Exporters can now retain up to 60 percent of their export receipts in their foreign exchange accounts and the remaining 40 percent converted at market rates within 15 working days.

Meanwhile, the BoG says developments in the cedi–dollar exchange rates, according to an analysis of its data, show that the pace of depreciation has slowed. Monthly depreciation declined steadily from a peak of 7.8 percent in January to 2.7 percent in May this year.

The Bank of Ghana further announced that the Chinese currency, the Yuan Renminbi is now available for traders who would want to use it for business transactions. The move to introduce the Yuan in Ghana follows the high demand for US dollars by traders who transact business with their Chinese counterparts. This however according to the central bank puts massive pressure on the cedi, resulting in its fast depreciation against the dollar.

The group said investment interest in the Ghanaian economy by multinationals stood at 18.73 percent. Angola was rated third preferred investment economy by the multinationals, with 21.9 while that of Kenya stood at 23.17 percent.

Nigeria led the continent with 29.57 percent, according to a report entitled “Frontier Market Sentiment Index”, issued by the Wall Street Journal.

According to the report, 11 African countries were surveyed by multinational companies, which included European and American firms. It quoted Mr Matt Lasov, Global Head of Advisory and Analytics of the U.S. firm as saying, “we collect data about which countries the companies are watching for potential future investment. “Over time, that gives us a clear picture of their market priorities; which countries they are including in their future plans and which they are dropping.’’

The report said that security situation in Nigeria and Kenya was least considered by the multinationals in their preference for both countries as top business destinations in Africa. “Rising insurgency in both countries apparently has not discouraged multinationals from venturing into business dealings as opportunities in the countries probably outweigh security risks,’’ the report said.

“The top three African countries’ rating may not come as a surprise to many. Firstly, Nigeria is Africa’s largest economy and it is still growing; Kenya is East Africa’s largest economy.

“Angola’s oil wealth had in recent times made its economy bigger, with crisishit Portugal relying on the Southern African country as it seeks foreign investments to put its economy back on track.

“The corporate world’s fascination with Africa shows clearly in the rates of change of sentiment,” the report said. It, however, said that Nigeria remained the clear leader out of the African countries with twice the number of companies in the index considering investing in the West African country. “Nearly three in 10 companies have Nigeria on their watch list,” it said.

GHANA BUSINESS & FINANCE

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BRIEFS

Auto

Kantanka to commence vehicle production resource state institutions keeps growing. The purchase would further indicate the government’s commitment to promoting locally manufactured products.

Phase two of the project which entails the rolling out of saloon cars is projected to take off by the end of 2015, Operations Manager, Kojo Kudzordzi, who conducted journalists round the facility said.

Kantanka Automobile Company Limited, makers of Kantanka vehicles have announced the commencement of commercial production for their range of vehicles in the fourth quarter of 2014. This follows the successful installation of its assembling plants at Gomoa Mpota in the Central Region.

“After years of hard work researching to make this dream come true, we can confidently announce to you today that we are ready to produce in commercial quantities,” CEO of Kantanka Automobile Company Limited, Apostle Kwadwo Safo declared. According to him, test runs of the facility have also

Nigeria

Rlg granted ISO certification

The Standards Organisation of Nigeria (SON) has granted International Standards Organisation (ISO) 9001:2008 Certification to Pan African ICT Devices manufacturer, Rlg Communications Nigeria Ltd, a subsidiary of Rlg Communications Global, becoming the first indigenous OEM in Africa under the ICT sector to achieve this.

The issuance of the NIS ISO 9001:2008 No. 0000389 by the Nigerian authorities follows rigorous

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been successfully completely, paving the way for the grand launch of the facility to the general public.

The plant, comparable to any automobile assembling facility in the world, assembles imported vehicle parts from China and other parts of the world, including locally manufactured ones. It has the capacity to produce eight vehicles a day and could further be expanded to produce twelve or more depending on market demand.

The government of Ghana is expected to buy majority of the vehicles produced by the company as the demand to

assessment carried out by the Standards Organisation of Nigeria (SON) after an application by Rlg Communications Nigeria Ltd to have its Quality Management Systems (QMS) audited and certified in compliance with international standards and best practices.

ISO 9000 is a generic quality management system standards. It represents a series of standards. Only ISO 9001 is a certification standard in the series.

“What this means is that our products and training services meet international standards, capable of competing with similar brands globally. This then affords us the opportunity to bid for international contracts”, says Tosin Ilesanmi, the company’s Head of Business to Government (B2G) in West & Central Africa.

The latest certification makes company’s services such as sales and repair of laptops, phones, accessories and training in applied ICT of Rlg Communications Nigeria Ltd conformed to the requirements of NIS ISO 9001:2008 standard and is consequently certified for the next 3 years, according to a communication signed by Dr. Joseph I. Odumodu, Director-General of the Standards

GHANA BUSINESS & FINANCE

Apostle Safo appealed to the general public to support him as he seeks to make the country the hub of automobile in the West African sub region. “Help me to manufacture and our country will be a better place to live,” he added.

President of the Institution of Engineering and Technology, Reverend Eric Ankrah, commenting on the plant said the institution was in support of the facility and would help transform it by accrediting it as a Centre of Excellence for Competence Based Approach to assist in training the youth for the job market. “This is the policy of the government,” he noted.

Organisation of Nigeria dated June 6, 2014.

Global Head of Rlg, Alex Lu said the ISO 9001:2008 allows one to become a more consistent competitor in a marketplace, and that is exciting and challenging. “Because better quality management helps one to meet customer needs, this certification will mean improving operational performance to cut errors and increase profits while ensuring that we win more high value customers with better customer service and broaden business opportunities by demonstrating compliance,” he said.

Not many technology firms have their services certified by the global standard body, ISO. The certification for Rlg, a company which originated from Ghana is therefore a major boost towards its quest to lead pan technological advancement across the continent.

Rlg manufactures devices such as mobile phones, laptops, desktops and other accessories and has won many international awards for innovation, job creation and CSR. It currently operates in a number of countries including Ghana, Nigeria, Kenya, the Gambia, China, and Dubai where its Global Offices are located.

JULY 2014

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BRIEFS

Auto

Kenya

Jaguar Land Rover to build Discovery Sport in Halewood

Kenya raises USD 2 billion in sovereign bond debut Kenya has raised USD 2 billion from international investors, the largest debut for an African country in the sovereign bond market amid strong demand from pension funds, insurers and sovereign wealth funds seeking higher-yielding assets.

Tata Motors owned Jaguar Land Rover, the UK’s largest automotive company, has confirmed plans to build the Land Rover Discovery Sport at its Halewood plant, creating 250 new jobs. The additional jobs announced to support Jaguar Land Rover’s newest model will see the Halewood workforce reach 4,750 – more than treble the number employed there in 2010.

Commenting on the announcement, Jaguar Land Rover CEO, Dr. Ralf Speth, said: “The Land Rover Discovery Sport is the next in a line of exciting new products to come from Jaguar Land Rover. I am delighted that Halewood – and Liverpool – has been selected for this new investment. It is totally deserved, and strengthens the ‘special relationship’ that bonds Jaguar Land Rover to this great city.”

The Halewood plant, which is already home to the company’s fastest selling model of all time - the Range Rover Evoque, has benefited from a GBP 200 million investment to support the introduction of the first member of the all-new Land Rover Discovery family.

This takes the total amount invested in Halewood over the last four years to almost GBP 500 million.

The new Land Rover Discovery Sport will go on sale in 2015 and is expected to be the most versatile and capable vehicle in the compact SUV segment. It is the first member of an all-new family of Discovery vehicles, inspired by the Discovery Vision Concept which was spectacularly showcased at the New York International Auto Show.

Richard Else, Jaguar Land Rover Halewood Operations Director, said:

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“I am delighted to be welcoming the new Land Rover Discovery Sport to Halewood. Its arrival has been a further boost to the region and to our committed and loyal workforce who are all passionate ambassadors for this great company.

“In many ways, Halewood has embodied the transformation of Jaguar Land Rover. We have seen our work force treble and production quadruple in just four years. Today we are operating three shifts, 24-hours a day to meet global demand and I am confident that the team will rise to the challenge and deliver a flawless launch of this exciting new model.”

The arrival of this exciting new vehicle at Halewood has doubled investment in the plant since 2010. In addition to a GBP 45 million state-of-theart Aida servo press line installed in March of this year, Jaguar Land Rover has installed 260 new automated robots, industry leading laser welding facilitates and a number of state of the art equipment monitoring & reporting systems to support an unrelenting focus on quality.

Halewood became home to Jaguar Land Rover’s top selling model, the Range Rover Evoque in 2011. Within two years the plant had produced more than 200,000 vehicles, a record volume for a single vehicle line at any Jaguar Land Rover facility. Today the Range Rover Evoque continues to attract new customers to the Land Rover brand.

Sales in May were up 12 percent year on year with more than 80 percent of production exported to 170 global markets.

GHANA BUSINESS & FINANCE

The much-delayed fund raising effort puts Africa on track to beat the record USD 11 billion it raised last year from the international capital markets, after Zambia, Morocco and South Africa also issued bonds in recent months. Investors anticipate that Ghana and Ivory Coast will tap the capital markets before the end of July.

Investors placed orders for more than four times the amount that Nairobi finally raised, suggesting strong appetite for higher risk assets.

The strong demand came in spite of a terror attack that killed at least 48 people in Kenya on Sunday night.

Bankers said the capital raising yielded two notes: a USD 500 million, fiveyear bond paying an interest rate of 5.875 percent, and a USD 1.5 billion 10-year note with a yield of 6.875 percent. The yields were lower than initially thought.

“Kenya’s gotten really, really lucky with the yield, there’s been a humungous rally and there’s very strong global demand for African sovereign paper,” said Aly-Khan Satchu, a Nairobi-based investment manager who bought the bond on behalf of several clients.

He said a rally in Egypt following elections that returned Abdel Fattah al-Sisi to power, combined with the intervention of the International Monetary Fund in ailing Zambia, had turned round Kenya’s prospects.

Officials had initially been nervous they had missed the most opportune window to turn to the international markets once the US Federal Reserve began tapering its bond buying JULY 2014

“Basically in comparison to what one would have expected four to six weeks ago, Kenya is looking very attractive at these rates,” said Mr Satchu.

“Kenya should say a big thank you to Sisi and Madam Lagarde (the head of the IMF).”

Kenya’s low yields and high investor interest reflect not only lucky timing but also overall growing appetite for exposure to growth in some of the world’s fastest growing frontier markets. Bond funds dedicated to emerging and frontier markets have seen strong inflows recently as pension funds and insurers, sovereign wealth funds and even retail investors search for the higher-yielding securities.

MOVERS AND SHAKERS

BRIEFS

programme, a move likely to send initial repayment rates higher than hoped.

Uche moves on

Uche Ofodile, Chief Marketing Officer of Vodafone Ghana, has left the group. It is understood that she will be moving to South Africa to take up a higher position with a different company. Ms Ofodile joined Vodafone in 2009 as the Head of Strategy, Brand and Communications when Vodafone had just acquired majority shares in Ghana Telecom. In 2011, she took over as Chief Marketing Officer and is credited with the development of several initiatives which enhanced the company’s revenue and market share. This includes Vodafone’s CSR initiative, Healthline. She also played a critical role in the telecom company’s movement from number four in 2009 to number two currently - for both revenue market share and subscriber numbers.

Changes at GGBL

GGBL announced the resignation of Katherine Joanna Seljeflot from the board of the company and the appointment of Stephen Nirenstein and Prince William Ankrah as Directors. Mr. Nirenstein is the Group Financial Planning and Analysis Director for Diageo Plc-Hungary and has about 20 years of organizational experience with various institutions including Diageo Plc. He holds a B. Sc.in (Accounting, Auditing and Finance) with Finance option, University of Cape Town. Mr. Ankrah is the General Secretary to the Ghana Mine Workers’ Union of TUCG representing the Social Security and National Insurance Trust (SSNIT) on the board. He has over 25 years of organizational experience.

Henry Rotich

The strong bond debut will boost Kenya’s finance team, which has undergone a rollercoaster roadshow, during which finance minister Henry Rotich had to leave part way to announce how a USD 3.8 billion budget deficit would be addressed, and ended with news of a massacre claimed by al-Qaeda-linked jihadis, al-Shabaab, who killed 48 people in an overnight raid on a coastal town.

Kenya says it will use the money to repay a USD 600 million loan that expires, following a painful lastminute three-month extension, in mid-August, as well as for general budgetary spending with a focus on grand infrastructure to boost growth rates.

Still, Kenya counted on many positive developments. Its bond prospectus for the first time officially touted a larger economy than previously estimated – 20.6 percent bigger in 2009 than earlier estimates – and Mr Rotich last week forecast that Kenya would grow 5.8 percent this year and 6.4 percent next year.

JULY 2014

Kwame Mamphey flies off

The Director-General of the Ghana Civil Aviation Authority, Air Commodore (Rtd.) Kwame Mamphey, has tendered his resignation to the board. Air Commodore (Rtd.) Mamphey was appointed in 2009 and is credited with overseeing the transformation of the aviation industry over the past five years. Under his leadership, the number of domestic airlines grew from one in 2009 to the current four whilst attracting strategic international airlines into the country. He is also credited with leading the GCAA to generate revenue for the construction of a multipurpose training facility at the KIA enclave to train aviation professionals in Ghana and the sub-region. His resignation takes effect from June 30.

Zooba reconstitues board

Zoobashop, an online retail shop, has reconstituted a five member Board of Directors to be chaired by Ghassan Yared.

Mr Yared is the Chairman and Chief Executive Officer of Forewin Group of Companies. He is also the CEO of Mabani Holdings. Other members of the board are Albert Biga, founder and CEO of Zoobashop.com and an ICT & Business Process Automation expert; Felix Biga, a twentyyear veteran of international corporate finance with stints at Bank of America, ABN AMRO and the Caterpillar Group; Kwadwo Aboagye-Atta, CEO of Orbit Money Lending Company Limited; and William Sam, Chief Software Architect at AqumenLabs, a subsidiary of Praescient Limited focused on the development of software solutions.

GHANA BUSINESS & FINANCE

13

BRIEFS

MTN staff volunteers digging the foundation for e-library project at Suma Ahenkro in the Brong Ahafo Region

Pupils displaying their schools bags after the distribution in Takoradi, in the Western Region

Serame Taukobong, CEO of MTN Ghana sewing a school bag at the new century career center at Dansoman

MTN Staff brighten lives in 2014 Y’ello Care MTN Ghana has launched its annual 2014 Y’ello Care, the 21 Day employee volunteer initiative which takes place in the month of June every year. During the period, MTN volunteers in all 22 countries where the brand operates volunteer their time to provide much needed infrastructure and care in selected communities. There is a different theme for each year and the focus for 2014 is “Investing in Education for All”.

Following this noble tradition, MTN employees devote their time and energy in assisting communities to embark on significant development projects to enhance the communities in which MTN operates. In line with this year’s theme and the company’s vision to lead the delivery of a bold digital world, MTN Ghana is focusing on inculcating Information and Communications Technology into teaching and learning to help bridge the digital divide.

This year, MTN staff volunteers are putting up e-libraries at Ningo Senior High School in the Greater Accra, Tarkwa Regional Library in the Western Region and Suma Ahenkoro in the Brong Ahafo Region. The e-libraries will provide access to a wide range of e-books around the world on a wide range of subjects for both teachers and students.

The staff volunteers have started work at all three business locations across the country. The concrete foundation for the e-library projects has been completed and waiting to dry before the raising of the structure for the e-libraries. Work continues with the designing and sewing of school bags from MTN banners and flexi materials at National Vocational Training Institute at Dansoman, Biriwa NVTI Center in Takoradi, Kumawu NVTI Center, Kumasi and Tamale NVTI Center.

Speaking on the e-library project for his school, the Headmaster of Ningo Senior High School, Mr. Botchway said the school has a student population of about 1,320 with an ICT Lab made up of 47 computer monitors which needed to be changed.

According to him, the intervention by MTN has come at the right time. He added that the e-library will assist both teachers and students in the teaching and learning process.

Led by Chief Executive Officer Serame Taukobong, MTN Ghana executives recently volunteered their services to sew

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school bags as part of the company’s annual 21 Days of Y’ello Care employee volunteer programme.

In line with the theme “investing in education for all,” MTN staff volunteers undertook various projects across communities to support the development of education in Ghana.

The CEO and executives in Accra joined other MTN staff at the New Century Career Training Center at Dansoman to assist with the sewing of schools bags from old MTN banners and flexi materials. Other staff volunteers also worked on the construction of a containerized e-library for Ningo Senior High School at Ningo.

In an interview the CEO said he was happy to be part of the Ghana team and to see recycled flexi materials being repurposed into school bags. He said, “this is a great initiative being undertaken by my team and it goes back to reinforce our belief in promoting environmentally friendly initiatives.”

In Takoradi MTN staff members worked to achieve a 1,000 school bag target for the Western region. The bags will be distributed to children in schools in the Western Region, Eastern Region and Volta Region. Some of the beneficiary schools include Anaji Basic School, Beahu Roman Catholic Basic School in the Western Region, Asafo Methodist Basic School, Asafo Presbyterian Basic School, Asafo Roman Catholic Basic School in the Eastern Region, Ave Dakpa Basic School and Lume Atsyame Basic School in the Volta Region.

Since its inception in 2007, MTN Ghana remains the most awarded for volunteerism and projects, picking up the 2008 WECA (West and Central Africa) Regional award, overall Y’ello Care Challenge winners for years 2010 & 2011 and also the Y’ello Care ICT Project prize for 2013.

The MTN Foundation was established by the MTN Group Board as the vehicle for effectively administering MTN’s Corporate Social Responsibility contributions. The Foundation is funded by a percentage of profit after tax (PAT) of the relevant operating unit. The MTN Foundation has invested GH₵14.5 million in health education and economic empowerment projects in Ghana since it was launched in 2007.

GHANA BUSINESS & FINANCE

JULY 2014

ECONOMY

Once more with uncertainty

Would a third Eurobond overburden the Ghanaian economy?

Oppong Baah

Ghana’s quest for a third Eurobond this month – July 2014 – to address the imbalance in infrastructure has not only drawn a soft cracking of the whip from the International Monetary Fund (IMF) but also what is termed in political circles as ugly noises from some financial gurus. he IMF, one of the foremost development partners of the country has warned that Ghana could be taking too much debt in dollars through the issuance of the Eurobond.

Seth Terkper The government hopes to use proceeds from the $ 1 billion bond issue to finance some projects in the 2014 budget, pay debts and fund infrastructural projects.

The Finance Minister indicated the importance of assessing the markets and taking advantage of the inherent opportunities available to the country.

This is in line with the government’s constitutional mandate which among others is to expand access to potable water and sanitation, health, housing and education; reduce geographical disparities in the distribution of national resources; and ensure environmental sustainability in the use of natural resources through science, technology and innovation.

The IMF, however, does not share Mr. Terkper’s optimism.

Managing Director, Christine Largard, insists that the practice of taking on too much debt in dollars through the issuance of the Eurobond has the potential to further harm Ghana’s economy. She pointed out that “increasing yields on the bonds indicate investors see the bonds as high risks” and called on the Ghanaian Government to be wary of overloading the country with too much debt.

Mr. Seth Terkper, Finance Minister, who gave the hint of the bond on the sidelines of the ‘Africa Rising’ Conference held in Mozambique, brushed aside concerns of unfavourable market condition saying “Ghana can still take advantage of the market conditions”. Reacting concerns about the prudence of the move, he said “we are not doing it at 15 percent. There was a time when emerging markets interest rates were 15 percent.

Even during those periods, countries that issued at those peaked interest rates pulled through”.

Ghana has a huge infrastructure deficit which financial experts say costs the country an estimated 2 percent annually in terms of lost GDP growth. It is also estimated that the country needs to spend about USD 2.3 billion dollars annually on infrastructure to ensure a steady economic growth.

cont’d on pg 16 JULY 2014

GHANA BUSINESS & FINANCE

15

ECONOMY

Financial experts therefore have no qualms about the good economic reasoning for the country to borrow from outside to fill the financing gap so as accelerate economic growth and poverty reduction.

They see the Eurobond as a potent source of development financing for Ghana just like other African countries that placed on the international financial market about USD 7 billion of debt in 2012.

Even though there is not much evidence of these effects to enable a clear generalization, the little available evidence for Ghana suggests that the bond to finance government expenditure or for that matter, the on-going deficit, is likely to exert independent upward pressure on the interest rate. This happened in 2008 just after the first sovereign bond issue when almost all the money market rates followed a general trend of market increases, some have argued.

Of note is that, the bond can impact negatively on investment Some observers believe, however, that though the Eurobond and growth if it leads to increases in national consumption has the potential to bridging the financial gaps in the country, and declines in savings levels. This appears to be the case, it is important to regard it as a debt particularly in developing countries like creating instrument and accordingly only Ghana where evidence exists to suggest “Of greater concern is as an alternative source of development a direct positive relationship between that as a commercial financing. government consumption and imports, and external inflows. loan the Eurobond They contend that the country’s financial will definitely increase Of greater concern is that as a commercial management is plagued with the lack of fiscal prudence stressing that in 2012 this loan the Eurobond will definitely increase the debt stock of the financial indiscipline resulted in a huge the debt stock of the country with longcountry with longbudget deficit equivalent to 12.0 percent term implications for both fiscal and term implications for of GDP as against a deficit target of 6.7 foreign exchange gaps. As the debt stock percent of GDP. both fiscal and foreign increases, so will possibly the debt burden costs of the country and the need for exchange gaps.”

An issue of no mean importance is for foreign exchange increase. If the bond Ghanaians to know how far the availability destabilizes the cedi, the government may of the bond proceeds is going to affect government spending still need to mobilize more cedi resources to service these debts allocations through fungibility - whereby the bond proceeds in future. pay not for items for which they are accounted but for marginal expenditure they make possible.

This is the second time in this year that Ghana has made a go at a Eurobond issue. In March, an attempt to raise about USD 1 The concern is that the Eurobond could directly or indirectly billion was made but had to be put on hold due to what certain finance the already increasing government consumption sources at the Finance Ministry described as “unfavourable expenditure rather than the capital projects that would market conditions”. nominally be its purpose. Some financial market watchers are also worried about what independent effect the Eurobond Mr. Terpker confirmed the situation tacitly by saying, “we are is likely to have on the interest rate and what, if any, aware that emerging matters remain volatile but an explanation macroeconomic consequences this would have on output and that we gave to keep an eye on these developments is not the crowding out of private expenditures. tantamount to withdrawal from the bond issue as has been widely reported in recent days”.

It is a financial truism that no country can develop without funds. Ghana needs roads, schools, clinics, and hospitals, hygienic drinking water and houses. But the question is, why does the government not choose a longer bond period, when it has been possible for a country like Morocco to raise USD 500 million Eurobond with a 30-year maturity?

Ghana’s second Eurobond is presently hovering around 9 percent. If the third bond comes off, the country will without doubt pay over 9 percent as interest; the highest among her peers that have issued sovereign bonds!

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GHANA BUSINESS & FINANCE

JULY 2014

Martin-Luther C. King

Ghana is sitting on an unemployment time-bomb.

Despite the country’s impressive economic data and new status as a lower middle-income country, providing jobs for the country’s growing population, especially its youth, still remains a tough prospect for the country’s authorities. rofessor Stephen Adei, former rector of the Ghana Institute of Management and Public Administration, has warned that Ghana faces collapse if the growing rate of youth unemployment is not arrested.

“One major challenge for Ghana is how to foster increased levels of productivity and investments in the non-oil (nonmineral) sectors where higher and sustained growth will serve to generate jobs beyond the relatively few ones that the petroleum sector or the mining sector can create,” Crookes observed.

The seriousness of the job market crisis is that it seems to be caught on a small one-way road into a bottomless pit with Specifically, more jobs need to be created in the non-minerals official data showing that whilst about 250,000 young people sectors where the impact would be broader in terms of reducing enter the labour market annually, less than 5000 (or, 2 percent) poverty and enhancing shared prosperity in the country. are able to find employment in the formal sector, leaving about 98 per cent unemployed or seeking Ghana also needs to increase productivity, survival in the informal sector on unsecured “Currently it is estimated lower firms’ operational costs and rely less income. A new frightening dimension of on resource-intensive industries. It needs that almost four million the unemployment problem is the rising to enhance the business environment for levels of graduate unemployment, which is firms and strengthen the platform for people out of the 14 currently estimated to be over 44 percent of investments in manufacturing. million Ghanaians within graduate school leavers. the age group of 15-64, Ghana’s unemployment problem has The fact is that Ghana’s public sector continued to worsen in the last couple regarded as active or currently absorbs only a small proportion of decades. From 2.8 percent in 1984 it working population, are of graduates from the country’s education climbed to 10.4 percent in 2000. After a system; agriculture, normally seen as massbrief respite and a fall in the rate to 6.5 without employment,...” employment oriented, is shedding off percent in 2008, it reached 8.5 percent labour; and, the manufacturing sector is in 2010. Currently it is estimated that shrinking as a proportion of GDP from 18 percent in 1966 to almost four million people out of the 14 million Ghanaians 8 percent currently. within the age group of 15-64, regarded as active or working population, are without employment and do not receive any More broadly, Ghana actually needs to create between six and kind of earnings, whether as wage payment or as compensation seven million new jobs in the next sixteen years to be able to in self-employment. This is equivalent to about 28 percent of absorb the people who enter the job market, which is set to the total active population (15-64 years old) of Ghana. increase for the next couple of decades, says the World Bank.

Indeed, the proportion of Ghanaians without employment As it is, the country’s working age population (15-59 years), actually increases to 47.2 percent if only paid employment which used to be around 50 percent since the 1960s, now is considered. This translates into about 6.7 million of active constitutes 55 percent of the population, posing a fundamental Ghanaians who are not in any paid employment. The worst growth challenge, the World Bank’s Ghana Country Director, affected groups of the Ghanaian job crisis include women, Mr Yusupha Crookes has said. young people, the disabled and the elderly. cont’d on pg 18 JULY 2014

GHANA BUSINESS & FINANCE

17

ECONOMY

Ghana’s job crisis

ECONOMY

The situation, however, seems to be more precarious for the youth population aged between 18-35 years. This age group makes up only about 26 percent of the entire population of the country, but they account for over 45 percent of the total unemployed Ghanaians.

and further to 114,118 in 2010 in the wake of rising active labour force. The poor situation on the job market appears to be exacerbated by a net employment freeze in the public sector, which is part of conditionalities of the stabilization pact agreed with the World Bank by the government of Ghana.

This phenomenon can largely be attributed to the inability of the economy to create sufficient jobs to absorb the growing numbers of Ghanaians in the labour market, experts say.

More bluntly, there is a mismatch between the demand for and supply of labour in terms of size and qualifications, leading to a qualification deficit. And the situation appears to have been exacerbated by large-scale privatisation of state owned enterprises, retrenchments and redeployments of large numbers of public service workers that began in the eighties and continued into the nineties.

Meanwhile, government initiatives to tackle the crisis continue to produce less than impressive results. Whether it is the National Youth Employment Programme (NYEP), the Youth in Agriculture Programme (YIAP) or the Ghana Youth Employment and “Over the period 1985-1990 Entrepreneurial Development Agency alone public sector retrenchment (GYEEDA) and numerous others in between, the state’s interventions have and redeployment contributed barely scratched the surface of the to about 89 percent of the loss problem.

of about 235,000 formal sector jobs. More than two decades after, the labour market is yet to recover from that blow.”

Beginning from the eighties, the size of the Cocoa Board’s payroll, for instance, was reduced from 100,000 to 50,000, as part of a retrenchment exercise. The civil service also lost 36,000 jobs by the same token. Private sector employment also fell from about 149,000 in 1960 to 31,000 in 1991, representing a decrease of about 79.2 percent and an average decline of 2.7 percent per annum. Over the period 1985-1990 alone public sector retrenchment and redeployment contributed to about 89 percent of the loss of about 235,000 formal sector jobs.

More than two decades after, the labour market is yet to recover from that blow.

Growth has also been very slow in high labour absorption sectors such as manufacturing, construction, tourism and food crop activities, with the manufacturing and construction subsectors contracting in 2009 by 1.3 and 1.7 percent respectively before levelling off at 1 and 7.9 percent in 2010.

The sluggish performance of the economy, as reflected in these two sub-sectors, which provide the bulk of private sector formal employment, seems to have adversely affected employment generation in the economy. This has made it particularly difficult for new entrants into the job market to find decent work as underscored by the declining trend of newly registered members by SSNIT from 119,748 in 2008 to 116,625 in 2009

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Worse still, the economy continues to evince a general tightening of credit conditions, particularly for small and medium-sized enterprises and households as both monetary and fiscal policies reveal extremely conservative tendencies. The ensuing declining confidence in the economic environment has translated into slowing down of business activity and limiting of space for employment, thus pushing the majority of the unemployed Ghanaians into the informal sector.

Addressing the unemployment challenge requires coherent and coordinated growth and employment strategies and the necessary political commitment to implement and monitor employment targets agreed upon in the national development policy frameworks.

Specifically, the country needs to urgently but deliberately move to raise productivity, competitiveness and encourage the development of industries and enterprises that can provide large numbers of jobs; deepen reform to create space for sustainable employment; strengthen human resource development; enhance business start-up capacity and employability of the labour force; and take advantage of abundant labour resource by taping international labour exchanges.

But above all, a commitment to good, functional education by formulating minimum of ten year-long national education policies to drive the country’s education sector is the key to resolving Ghana’s national job crisis.

GHANA BUSINESS & FINANCE

JULY 2014

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COVER STORY

Looking for greater success –

NIB turns to commercial banking

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GHANA BUSINESS & FINANCE

JULY 2014

ne of the leading government-owned banks that has been among the top performers in the industry, albeit on the quiet side, is the National Investment Bank (NIB). Not that NIB easily comes tops when one does a search of the best commercial banks in the country but the bank stands out among the pack, even in Africa, when it comes to development/ investment banking. Realizing where its weakness lies and thus needing some reinvigoration, the bank has rolled out a short to medium term strategic plan for the period ending 2016 which, among other things, will seek to reposition the bank as one of the leading banks in commercial banking, besides its core business of development finance.

Executing a development agenda for a young nation like Ghana necessarily calls for a strong financial sector to provide the lubricant to oil the cogs of industry. It was to execute such an agenda that NIB was created. Since its creation in 1953, the bank has always had the support of government, even when in distress. Created as a development bank with the aim of supporting the growth of businesses and enterprises in the country through financing, it has carried out this mission with distinction.

Despite modest success, the bank is refusing to rest on its oars and is aiming for greater successes. With its sights firmly set on commercial banking, the

bank looks poised for further growth.

Though commercial banking has since 1975 been part of the portfolio of services the bank provides, it has not received the needed push to make the bank feature prominently as one of the leading commercial banks in the country.

Mawuli Agbesi, the bank’s new Managing Director (MD), is the person tasked to advance this goal.

Imbued with a firm vision of the bank’s future, he has mapped out a strategy to roll out twenty-two additional branches across the nation by 2016 to, as he says “bring our services closer to the people.” Again. Mr Agbesi intends to take bring the bank firmly into the present by retooling and modernising its IT infrastructure, which has long held the bank back from even greater success.

GB&F recently caught up with Mr. Agbesi and had an exciting chat with him on the steps being taken to make NIB a truly modern investment as well as commercial bank.

The NIB story “Over the years, NIB has helped in the establishment of several businesses such as Nestle Ghana Ltd., of which initially NIB was a majority shareholder” says Mr. Agbesi. Nestle, undoubtedly, is one of the biggest businesses in the country at the moment. cont’d on pg 22

JULY 2014

GHANA BUSINESS & FINANCE

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COVER STORY

The banking industry in Ghana remains one of the most robust and high-performing sectors of the economy even in the face of current economic difficulties. A glance through the end-of-year financial reports of most banks shows that most of them did double digit percentages in terms of their profits after tax. This obviously does not illustrate an economy under strain to the outsider or maybe growth is restricted to the banking sector alone.

COVER STORY

bank whilst addressing deposit mobilization with a view to “restoring NIB back to its past glory”.

The Nestle story is but one of the several investment success stories NIB has created since its inception. Its footprint is also planted on companies like Total Ghana Ltd., of which the bank is still a major shareholder, Nexan Cable Metals, Twifo Oil Palm Plantation and Intravenous Infusions Ltd. among others. The bank, according to the MD, currently has equity in 20 companies across the country and continues to provide credit to both corporate and retail companies as well as individuals.

But for the failure of past managers of the bank to properly trumpet the achievements of the bank to the world, the bank would have undoubtedly been seen as one of the biggest success stories in the country. But even this public relations failure has not prevented the bank from being adjudged the best performing Development Finance Institution in Africa for 2013 by the Association of African Development Finance Institutions (AADFI). The endorsement which came in far away Kigali, Rwanda, saw the bank receiving an A+ rating in the areas of governance, financial and operational standards. As Mr. Agbesi says “the rating would spur the bank on to attain greater heights.”

Strategic Plan A strategic plan, put together by the management of the bank and endorsed by the board will see the bank turning around its fortunes, according to the Mawuli Agbesi. In this plan, management intends re-strategising to improve the credit portfolio of the

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It seems commercial banking is the preferred choice of most banks these days, which is not surprising as commercial banks make huge profits. In the view of the MD of the bank, “there is an urgent need to strengthen the bank’s commercial banking operations”. The bank intends to refocus some of its attention to this arm of banking whilst still keeping to its traditional mission of being the number one development bank in the country.

“...twenty-two new branches of the bank would be opened nationwide to give greater access to the customers of the bank.”

A more obvious leg of any expansion strategy would be in the physical branches. Mr. Agbesi discloses that twenty-two new branches of the bank would be opened nationwide to give greater access to the customers of the bank. Additionally, the bank is upgrading its current IT infrastructure and has accordingly purchased a new banking software worth over USD 3.5 million. The plan will also entail retraining and upgrading the skills of staff of the bank to be able to fit into the new vision of the bank because as Mr. Agbesi indicates “there is no better way to grow than having a motivated and well-trained staff.”

GHANA BUSINESS & FINANCE

Bills of health NIB remains a profitable bank and its books paint this fact clearly. Figures released over the last four years show a bank in robust health, achieving impressive operating results over the period. Its total operating income for 2013 increased by 38.3 percent to GHc 131.42 million; compared to GHc 95.0 million in 2012. It also recorded a net profit after tax for the year 2013 of GHc 38.5 million, an increase of 231.1 percent over its own 2012 performance of GHc 11.6 million.

NIB’s shareholders funds grew by 184.8 percent to GHc 285.4 million by the end of 2013 compared to GHc 100.02 million at the end of 2012 while its total assets grew by 35.7 percent from GHc 876.9 million at the end of 2012 to GHc 1,189.9 million as at the end of 2013.

Ghana’s banking industry, after liberalization, has become a clogged one with about twenty-eight commercial banks but this, rather curiously, does not pose any challenge to Mr. Agbesi and his team at NIB. In his words “the economy remains an open one and could even take in more banks.”

Interestingly, what presents a current danger to NIB and other commercial banks as Mr. Agbesi points out “is the emergence of micro-finance and NonBank Financial Services Institutions (NBFIs).” The NIB boss believes that the activities of these financial houses have resulted in high cost of deposit mobilization for banks and he believes their activities should be properly regulated by the Bank of Ghana.

In spite of this, Mawuli Agbesi is bent on addressing the deposit mobilization problems of his bank with a view to turning the fortunes of the bank around. His energy and drive seem perfectly whipped up for the task ahead and he believes with the help of his team, he can achieve his goals. Which, in his own words, is to be remembered as the manager “who turned the fortunes of NIB around.”

JULY 2014

BANKING & FINANCE

Mind the gaps:

How Ghana’s lottery industry can guard against money laundering The lottery industry in Ghana has over the years witnessed tremendous growth and continues to provide significant revenue for national development. However, there is much that is unsavoury about the industry in its present state, particularly in the area of regulation. n recent times, there has been news of underhand dealings in the industry which provide conduits for money launderers to perpetuate their illegal activities. Whenever large sums of money change hands, criminals and terrorists may attempt to manipulate the system to provide a cover for their illegal activities. Lottery organizations must therefore be aware that their operations could be targeted by money launderers.

Whether that risk is real or perceived, the cost of inaction could be unacceptably high.

Today, the stated-controlled sector of the gaming economy has the opportunity to demonstrate responsible leadership in the fight against money laundering, differentiating itself as a force for public good while at the same time, limiting its legal liability. Regulators and owners of the lottery industry must, as

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a matter of grave concern, adopt some measures to help lottery organizations put general provisions into practice.

Firstly, lotteries should establish clear responsibilities and accountabilities to ensure that policies, procedures and controls are introduced and maintained to deter criminals from using the lottery facilities for money laundering, thus ensuring that the organization complies with its legal obligations. It is difficult to achieve this objective unless a person within each lottery organization is given responsibility and the necessary authority for carrying out this function. Lotteries should therefore appoint a compliance officer to undertake this role. In addition, this compliance officer should be the central point of contact with the relevant authority tasked to supervise money laundering activities.

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Registration can be combined with loyalty card initiatives, which can act as a helpful marketing tool. Gaming products offered via the Internet should always involve a player account based on proper registration. Such player accounts should be monitored and payments to such accounts for participation in games should be limited per transaction and period.

include updates on major changes in anti-money laundering laws and regulations. New employees or retailers dealing directly with players or their transactions in any way should be provided with the same training irrespective of their level of seniority. This training should be given at the same time as training in routine internal procedures at the beginning of the employment. Lottery organizations should closely liaise with anti-money laundering authorities as a matter of routine. They should include related legal requirements in their contracts with suppliers and retailers, and compliance should be monitored by external auditors.

Finally, the effectiveness of these procedures and recommendations depends on the extent to which staff of lottery organizations recognise the gravity of the issues at stake.

Staff should be aware that there is a statutory obligation for lottery organisations to report suspicious transactions. They should also be discouraged from conduct that would amount to money laundering or aiding, abetting or knowingly involving

Theophilus Kwadjo Odjer-Bio, Chartered Financial Economist, Ch.Fe, Executive Board Member – Association of Anti-Money Laundry SpecialistsGhana Chapter. Director of Business Development-Golden Brain Consult, Accra-Ghana.(024-9658893) Email: goldenbrainconsult@gmail.com

Thirdly, in line with the identification procedures above, lottery organizations should consider implementing formal player registration procedures for certain games or game types.

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BANKING & FINANCE

Secondly, as new distribution channels are adopted, it is increasingly important for lottery organizations to know their customers – not only to verify compliance with age or territorial restrictions, for example, but also now to mitigate the potential risks arising from placement of dirty money. Player identification and registration procedures, and the possibility of including specific provisions in the rules and regulations themselves in attempts by others to “New employees or of lottery games, all need to be taken launder money through the lottery retailers dealing directly system. All staff should be encouraged to into account if lottery organizations are to protect themselves from money with players or their cooperate fully and to provide prompt laundering risks, real or perceived. records of any suspicious transactions to transactions in any way Policies and related procedures their compliance officer. should be provided should be developed to document the organization’s approach to player and It is therefore important that lottery with the same training winner identification. The “Know your irrespective of their level organizations conduct training customer” requirements consist in programs on policies and procedures obtaining full particulars of the identity of seniority.” established by the organization to of players (which may need to be verified ensure that relevant staff members are in certain circumstances) and a sound fully aware of their responsibilities. Staff and retailers should knowledge of the game type and sales channel in which the be educated in the importance of the “Know your customer” player is seeking to participate. This knowledge effectively requirements and suspicious transaction awareness for money allows for proper risk analysis. laundering prevention purposes. Training programs should

BANKING & FINANCE

Taxation or death?

Examining the financial service sector’s reaction to the new VAT charges After a confused start, public outcry and a suspension, the government’s attempt to introduce VAT on financial services is finally set to take off. How valid are concerns from the sector that the tax will have an adverse impact on their operations? Is government’s desire for more resources leading to strangle of a vital sector? he new Value Added Tax (VAT) rate of 17.5 per cent has taken effect. This followed the presidential assent given the VAT Act 2013 (Act 870) on December 30, 2013, and its subsequent gazetting the following day.

current accounts (foreign/local) for corporate bodies only, bank draft (payment order), and stopped cheques, returned cheques, commission on turnover for corporate bodies, overdraft processing or renewal fee among others.

The circular from the Ghana Revenue Authority (GRA) giving the details of the tax explained that the Act extended coverage to “the supply of financial services that are rendered for a fee, commission or a similar charge”.

There was the fear that taxing banking services will prevent consumers from saving with banks and it will deepen the low financial inclusion rate in the country. According to the World Bank, only 33% of Ghanaians have a bank account.

“Financial Services means provision of insurance; issue, transfer, receipt of, or dealing with money whether in domestic or foreign currency or any note or order of payment of money; provision of credit; or operation of a bank account or an account of a similar institution. Life insurance and reinsurance services are however exempt from the tax whether or not such services are rendered for a fee, commission or a similar charge”.

A Lecturer at the Economics Department of the University of Ghana, Dr. Ebo Turkson says the implementation of the 17.5 percent Value Added Tax (VAT) charge on financial services will discourage Small and Medium Enterprises (SMEs), as well as micro financial institutions from patronizing banking services.

However, after pressure from the public and the business community about the Financial Services component, the GRA released a list of the specific non-core banking items to be affected. The list released affects nearly all services banks offer. They include 32 non-core banking transactions such as

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“Some of these enterprises are very small; they are micro enterprises which do not bank a lot. Therefore the small amounts of money that are taken out of their account - because these charges will ultimately be paid by them – will deter some of them from banking,” Dr. Turkson explains.

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or brought this up and thought they were doing government a service has blundered completely and they have blundered with the assistance of the Central Bank,” he said to Citi FM in an interview.

Turning to the banking sector, Mr Casely-Hayford did not There have been equally vociferous concerns expressed by the mince words. “How can you charge me for giving me for business community. The Executive Secretary of the Importers giving me a cheque book; you want me to pay VAT on the and Exporters Association of Ghana, Sampson amount that the bank charges as fees for work Asaki has lamented the negative effect that “...it will give them that it is normally supposed to provide,” he he thinks the tax will have on business in said. an opportunity to interviews with local media. net the VAT off to Cassiel Ato Forson, the Deputy Minister “We are kicking against the decision of of Finance however sees things differently. reduce the cost government to implement this policy. Our of doing business Speaking to TV3 Network, he said that banks point is that it is going to affect our members have been charging VAT on data processing, and make them because they transfer huge sums of money to legal, accounting, actuarial, notary and stronger” the international market through the banks consulting services over a decade now. to go and buy goods to come and sell in this country.”

“It has been in place since 1998.

Nana Osei Therefore, the Bonsu, the impact of the VAT Chief Executive is not the full 17.5% Officer of the as being speculated.

Private Enterprise Federation (PEF), Speaking separately has described as to Kapital FM, unacceptable the Mr Forson again new list of services defended it. The that would attract emphasis is on the VAT charge. non-core financial “This is going services. We are to increase the not going to charge cost of doing VAT on savings, business, this is deposits, salaries and investments,” the Deputy Minister unacceptable. We sought to clarify. expect people and businesses to maintain bank accounts to facilitate their business “It does not mean banks will collapse, it will give them an but what they are trying to do will erode the confidence of opportunity to net the VAT off to reduce the cost of doing people in using the banking system,” he lamented. business and make them stronger,” he added.

A financial analyst, Sydney Casely-Hayford, thinks this new VAT on non-core banking services of the banks will stifle business generally and will not bode well for the financial sector.

“This is the most business-unfriendly government I have ever seen in this country; this is so bad. Whoever it is who conceived

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Given government narrowing options with regard to financing public expenses, it is not difficult to see why it fell on this as an option, joining a very small number of countries that tax financial services. It might however have overplayed its hand with this particular maneuver and may end up strangling a nascent industry that has been one of the few success stories of the country’s continuing economic reforms.

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BANKING & FINANCE

Dr Turkson thinks the government should have applied the tax on selective banking services and not in the manner in which that it has. “If there are special services that the banks are rendering that the government wants to tax, it should concentrate on those ones instead,” he recommends.

TOURISM & HOSPITALITY

Tourism in Ghana and the Experience Economy

In 1998, Pine and Gilmore, published an article in the Harvard Business Review called ‘The Experience Economy’. This article has generated a good deal of reflection in many areas of industry, particularly in tourism. Pine and Gilmore illustrate the passage from an agrarian economy to an industrial economy and to a service economy. Today, we are in an experience economy where businesses need to create memorable events for their customers. The product is lived and conserved in the memory. It is the experience. et’s illustrate the idea by considering a young mother, Nyamekye, a housewife who lives in a village. An agrarian economy. Her daughter has just turned 10 years and she wants to make the birthday special with a cake.

Nyamekye gets some flour, collects some eggs, some sugar and goes about making the cake in order to have something special for her daughter when she returns from school. The key concepts in the agrarian economy are commodities, extraction, natural.

In an industrial economy, Nyamekye, perhaps now Auntie Gifty, lives in some city or town. To make the cake for her daughter’s birthday, she goes to the market or even to some supermarket, buys premixed cake flour, which might even come with instructions written on the box, follows the indications, and the cake is done in few hours. In the industrial economy the key concepts are goods, making or manufacturing.

When we move even further into service economy, Auntie Gifty is now Madam Gifty. She works in an office and has little time on her hands. As she is heading to work, she picks up her cell phone and calls a bakery. She orders the cake from a bakery. Since the bakery has standardized all that is needed is to personalize it for her daughter: put her age or the right number of candles on top. In the service economy what counts is the delivery of a customized service to benefit to the client.

However, in the post modern era, something new has come to take effect. This is what is generally called the experience economy. Lady Gifty is still in the city, with less time available from her work. However she wants her daughter to remember this particular birthday. So, instead of ordering a cake, getting all the other things set up, she calls a party organizer. She tells

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the organizers, ‘My daughter is 10 years next Friday, I want you to organize a surprise party for her at home. I want it to be a memorable experience for her and her friends.’ The party organizer asks a few questions, gets the necessary information, and the surprise is ready. In the experience economy, the vocabulary changes. It is all about staging a memorable personal experience for the guest.

The interesting thing about this stage of economic evolution is that, at the centre of the event, it is no longer the cake but the whole experience of the event - the emotions and the feelings that Gifty wants to transmit to her daughter or to provoke in her. It is the love and friendship the little girl will feel and cherish as she grows. The items, the cake, the chairs, the decorations, the music, all become subsidiary to the creation of the particular experience. Tourism is exactly this. It is the experience that matters. The services are important, but they exist in order to contribute towards the experience.

People travel to make experiences, to live emotional moments.

These moments are captured in the heart and remain in the memory and become part of their personal human patrimony.

It might seem ironic, but globalization has created a situation whereby services are becoming more or less standardized all over the world. A three or four star hotel room is more or less the same in any major city in the world. People do not travel just to try out hotel beds or luxury coaches or cars. The services are important, but they are not the end. What is generally required of services is that they are clean, comfortable and well priced. No one leaves Europe or America to come to Africa just to sleep in a hotel. Upon returning home, tourists tend to cherish the simpler genuine moments, encounters with people or traditions, contemplation of the beauty of nature, or the

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If we examine the success stories of various tourism destinations that have stood the test of time, we come across the fact that there is a strong experience at the heart of their offer. This experience goes beyond the material things, it something to do with feelings, sensations, encounters and emotions. The services are there, otherwise nothing would work, but uniting these services into a marketable product is the overall experience.

Tourism is about marketing a product and not about offering an ill-defined patchwork agglomeration of services.

Some countries have it more easier others. Take Israel for example. Even though Israel is not a Christian country, and Christians amount to less than 3 percent of the population, Israel has done a good job at marketing itself as the Holy Land. Let it be remembered that the Holy Land, that is the lands where the important biblical events took place, go way beyond the boundaries of the State of Israel to include Egypt, Jordan, Syria, Turkey and Greece. Bethlehem, Jericho and parts of Samaria are in the Palestinian Territories. Yet to many Holy Land is synonymous to Israel. The nation has been able to capitalize on a strength of its biblical heritage to offer an experience that is totally unique. It is no surprise that a nation with a population of less than 8 million can actually receive some 3.5 million tourists annually.

Another interesting example is Egypt. Prior to the recent political unrests, Egypt was a destination for 12.8 millions tourist a year. If we take a look at Egypt, we see a country that has a lot different things to offer. On the one hand, the Nile and the possibility of navigation is itself a unique opportunity.

Egypt is also the land of one of the most ancient civilizations in the world, the pyramids and the ancient pharaonic civilizations still stimulate great curiosity. Egypt is full of different types of desert experiences from the Nubian dunes to the white Siwa desert. However, at the end, what really created a leap in the tourism figures in Egypt was the Red Sea experience in the area of Sharm el Sheikh. For the stressed out European, the experience of a week in the resorts of the coast of the Red Sea with its spectacularly clean water, the corals, and the easy and cheap access became a strong attraction. At the heart of the Red Sea offer is an experience: a relaxing week by the sea, near the desert with nothing to do but to take care of yourself. It is said that anxiolytic medicines are the category most consumed in the Western world. In other words, people in the so called advanced societies feel stressed out. Hence a destination that offers relax from tension at a relatively good price, becomes an answer. The answer, even though seemingly material, is in

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fact immaterial. The product that is being sold is not the hotel, is not the sea, is not the beach, it is the composite of all these to make you feel relaxed! The services are there but they are ordered towards staging the experience.

What is the Ghanaian experience?

We could talk about the experience of the history of the black diaspora and slavery. We could talk about the experience of relaxing on our beaches. We could talk about experiencing nature at our game reserves. We could talk about experiencing adrenalin and adventure surfing or paragliding. The Ghana experience is multifaceted. We seem to have a bit of everything and perhaps we have not yet pin pointed where our excellence lies. Nevertheless, for the purpose of marketing a destination it is important to choose a theme that unifies. The theme can be enriched and may even vary with the passage of time.

However, a strong and lasting experience can become key driving attracting factor that can later be declined into other areas, topics and experiences.

Among the many things that we do have, perhaps one that really stands out is the experience of our people, our culture and our philosophy of life. Ghana is a smiling nation. Ghana is a friendly nation. Ghana is a safe nation. Ghana is simply the best way to taste the cool African lifestyle. Imagine visiting Africa to get know the Africans, their culture, their history, their traditions, their fashion, their music, their dance. Ghana is the best nation on the continent to experience all this in one place. It is the place the get a taste of the African natural environment, from the savannah, through the forests to the beaches, from the large wild life to the bird watching.

But above all, paleontologists would tell us human life started in Africa, a true journey to Ghana could be like finding the African in you. It is a return to the roots, not only for black people but for all humans who want to return to the simplicity of their origins and to reconnect with that part of the self that has been lost over the centuries.

Seen this way, organizing tourism packages for Ghana to be offered around the world would mean emphasizing on the experiences that would include meeting Ghanaians and doing things Ghanaian. From the Akan name giving to learning how to make your own strip of kente or your own beads. In other words, we need to rethink our tourism offer. It is not just about hotels. There will always be better ones elsewhere. It is not about sandy beaches. There are nicer ones in the world. It is not safari and game reserves. There are better populated ones elsewhere. But is the way we bring all these together, to make you feel you have actually, finally come home to Africa.

Both public and private sectors in Ghana would like to see our tourism grow. However, it would not be mistaken to raise our heads every now and then from the just and necessary concern regarding services and to brainstorm about the unique experience we have to offer to our visitors. This in the end will also guide us to invest intelligently and harmoniously.

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chaotic and colourful externations of people and places. When one talking to tourists who have visited Ghana, a common trait that comes up is the Ghanaian people, their friendliness, their easy to get on with way of life, their apparent capacity to adapt to adversity with a smile and even a sense of humor.

Few tourists remember the difference between the Elimina and Cape Coast castles, yet they remember the moments shared with a fisherman in the Elimina fish market.

SPECIAL FEATURE

Pilgrimage to Israel An Experience of a Lifetime Renew your baptismal commitments in the waters of the Jordan River

Place your prayer intentions in the Western Wall of the Temple in Jerusalem

A group of pilgrims from different Christian churches

“An excellent and well organized trip.

A journey of a lifetime.”

Mrs Emelia Bhavnani

“The experience was very educative and eye opening.

Truly an experience of a lifetime.”

Mr Simon Hoenyedzi

“Great experience. I pray that every Christian will have the opportunity to undertake the journey to the Holy Land.”

Ms Evelyn Roberts

W W W. O N E P E O P L E T R A V E L S . C O M

Bethlehem, the Shepherd’s Field

a group of pilgrims from different Christian churches

Sail like Jesus and the Apostles on the Sea of Galilee

Pray at the foot of Mount Calvary

A delegation of members of Parliament on pilgrimage

Join Our Next Departures “The pilgrimage reminded me of the Lord’s continuing presence and sustaining power.”

Mrs Elizabeth Boham

25 July to 2 August 8 to 16 August 26 September to 4 October 24 October to 1 November

No. 17 Manyo Plange Street, Adabraka, Accra.

Email: info@onepeopletravels.com Telephone: 030 298 3401 or 0244 - 645772

SPECIAL FEATURE

is an experienced and accredited organization that is offering to Ghanaians an opportunity to walk in the footsteps of Jesus Christ in the Holy Land.

London Chamber of Commerce and Industry interacts with local business people 1) British High Commissioner, H. E. Jon Benjamin 2) H. E. Jon Benjamin addressing the gathering 3) Members of the chamber interacting at the gathering. 4) Cross section of delegates interacting 5) Joanna Bazley of Risk Advisory Group having a chat with a visiting delegate from London 6) Delegates interacting at the event. 7) Visiting delegates patronizing an exhibition stand 8) Subash V. Thakrar, deputy president and past chairman of LCCI addressing the gathering.

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Union Savings and Loans launches SME Clinic 1) Executives of Union Savings and Loans about to cut the tape to open the SME Clinic 2) l-r Chairman of USL, Philip Oti Mensah MD of USL, and Kofi Antiri Director of Research and Business Development at theInvestments Promotion Centre (GIPC) 3) Mr. Philip Oti Mensah (MD) explaining the concept of the SME clinic. 4) Invited guests 5) Alexander Koomson, Representative from the Bank of Ghana speaking at the event 6) Kofi Antiri, Director of Research and Business Development at the Ghana Investments Promotion Centre (GIPC) 7) cross section of attendants listening to Mr. Antiri’s presentation.

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IN FOCUS

Unique and flexible – ASN Properties payment plan beats all In the nation’s quest to bridge the housing deficit which currently stands at 1.7 million houses per annum, according to available statistics, governments past and present have tried vigorously to rope in the private sector. Sometimes, government has tried to use its purchasing power to provide guarantees and securities for private companies, knowing that financing is one big of a problem for players in the real estate industry. In spite of the numerous challenges private developers in the housing industry face besides financing, several players have heeded the call to action. ASN Properties is one of such companies that have taken up the challenge to do what government has been unable to effectively do – providing housing to the Ghanaian populace.

The Payment Plan

One significant feature of the ASN story, beside all other strong features the company’s current projects present is its flexible payment plan for clients.

In the words of the CEO “we have an in-house Financial Mortgage Plan which gives clients some flexibility in payment.” Clients of the company can pay 20 percent of the cost of their preferred house and move in. The client then spreads the remainder of the cost of the house over a 15 year period. Thus, ASN is not simply building houses and selling them, it is also providing mortgage to its customers enabling them to acquire their properties with ease. his drive to reduce the nation’s housing deficit is what Prince Sarpong, the Chief Executive Officer (CEO) of ASN Properties says propelled the company into action “It is this national housing deficit that motivated ASN Properties to be solely committed to providing housing and more importantly adding some flexibility in the payment terms.” The company is a subsidiary of ASN Holdings, an integrated holding conglomerate with interests in banking and finance, mining, real estate and construction.

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Though operating in the same space, ASN Properties, in order not to move along the common line and thus get lost in the bland mass of ‘real estate developers’ in the country, has added a touch of distinction to its services – developing what it terms an “in-house Financial Mortgage Plan” for its clients.

This gives clients of the company flexibility in terms of payment for their houses. ASN Properties builds for a clientèle which cuts across the economic ladder of the country, thus offering its products to all and not limiting itself to the upper echelon of society, which appears to be the order of the day.

GHANA BUSINESS & FINANCE

Ghana’s mortgage industry is a budding one and like any growing industry, it is fraught with its own challenges.

Currently, there are a handful of mortgage companies in the system providing services to a limited number of buyers. This means that there are millions of working people out there who, although might have the desire to own their homes, cannot access mortgage facilities. It thus makes a whole lot of difference when one company takes it upon itself to build and also offer its customers a convenient way to own its properties.

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Conveniently located at Malejor, less than 12 km from the Kotoka International Airport, Greenfields offers seamless access to the capital’s high-growth areas. The Government’s urban development plan as well as other developments taking place around Malejor including low, medium and high-density residential areas, and light industrial and commercial buildings makes Greenfields, without doubt, Ghana’s future urban city. Greenfields is also closer to the Valley View University, one of the foremost private universities in the country thus providing a perfect social setting for life. The community has such facilities as a recreational area, a commercial area, a clinic, round-theclock security and surveillance manned by well-trained security personnel, as well as a Police Station. There is also reliable water supply to the community.

Whichever way one looks at it, Accra is gradually moving out of the centre and peripheral townships like Oyibi represent the future of the capital city.

Such outskirt areas present a strong pull for comfortable life as a result of a number of factors namely: a serene environment, healthy living free from pollution, and traffic-free roads among others.

Current Developments

ASN Properties currently has four projects namely: Vista Courts, which is made up of two-bedroom residential apartments at Adentan; and Grace Enclave located in Madina, Accra which also comprises two-bedroom residential apartments. The other two projects - Sunset Bay and Heritage Homes are both located at Malejor near Oyibi under ASN’s Greenfields Gated Community Township project which has 400 housing units in a serene, secured environment. These are 200 ready-to-move-in 2 bedroom semi-detached and 200 ready-tomove-in 3-bedroom detached housing units respectively. The beauty of the

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Prince Sarpong, CEO of ASN Properties

Johannes Okutu, COO of ASN Properties

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IN FOCUS

Greenfields project lies in its location - outskirts of the busy city life of Accra.

ICT

Towards a cashless economy

Ghana and the use of electronic systems Georgina Adjei

Cashless societies existed centuries ago and were operated on the lines of barter, gift economics and debt. These later evolved to the use of money, but it seems modern societies are switching back to the old ways again as many countries in the world change from doing businesses by using physical cash to doing business through digital means.

These electronic cards and payment systems are contributing immensely to moving Ghana closer to a cashless economy, reducing the risks associated with transporting currency notes, both for banks and individuals; loss from fire or flood and other disasters.

At a recent round table discussion on a cashless economy for Ghana, MTN’s Sales & Distribution Executive Mr. Ebenezer Asante noted: “As a growing economy we must focus on a structured programme to achieve the benefits of a cashless economy.” cashless economy is one in which the purchase of goods and services and the payment of debts and remittances are done through electronic money media, either through credit and debit cards, direct transfers from one account to another, smart cards, mobile payment systems and other technologies. Ghana lags some distance behind most of the world (including many of its peers in Africa) in the general quest to boost micro economic activity by reducing the role played by physical cash in daily transactions and by encouraging the creation of a cashless society. We have not been forthcoming in introducing this concept to enable the people and the economy, in general, derive the full benefits of a cashless economy.

The earliest attempt at a cashless system began with the launch of the “Sikacard” by then Social Security Bank, now Societe General in 1997. Visa Horizon, introduced by Standard Chartered Bank and the eCard (TTB, Cal Bank, Ecobank) have since followed. The Bank of Ghana (BoG), the regulator of the banking industry through the Ghana Interbank, Payment and Settlement Systems (GhiPPS) introduced the e-zwich card in April 2008. Mobile financial services provided by three of the six telecom operators namely MTN Mobile Money, Tigo Cash and Airtel Money have presented Ghanaians with the ability to transfer money seamlessly, pay bills and purchase goods and services without having to carry money around.

Mr. Asante believes that a cashless economy brings about more benefits than an economy that thrives on cash. The use of electronic cards also leads to a reduction in the cost of printing currency notes and that of transporting cash along the value chain from the central bank to banks and businesses and consumers. This can be seen in the case of Nigeria where according to Nigerian Central Bank Governor, Sanusi Lamido Sanusi, direct cost of cash management to the Nigerian banking industry is estimated to be N 192 billion (approximately USD 1.9 billion by 2012).

Also, electronic cards offer increased service options for consumers, including efficiencies created when goods and services may be purchased and bills paid 24-hours a day, year round, without having to be physically present. Thus, time, space and distance are no barriers for economic transactions in a cashless economy. Furthermore, the net effect of the benefits is business and economic growth through e-commerce promotion, enhanced individual, business and national productivity; and with positive impacts on job-creation and its attendant multi-sectoral multiplier effects.

Mr Asante observes that one area which stakeholders in the financial sector and for that matter the central bank have not done well is the Mobile Money Payment platform. cont’d on pg 38

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ICT

In order to ensure that Mobile Money transfers are secured, a multiple authentication system is employed by the sender to validate a transfer. This involves the use of the Mobile number, transaction number and Personal Identification Number (PIN).

The beneficiary will access the transfer with a unique profile. To access his or her wallet, a user must authenticate that he/she is the account holder by entering a PIN. After consecutively entering wrong PIN three times (seizures of wrong PIN), the wallet is temporarily blocked.

Kenya is good example of the possibilities of the platform, with over 80 percent of the Kenyans using M-PESA mobile money transfer. Many Kenyans are transacting businesses through this platform rather than using physical cash. Mobile Payments are defined as chain of payments that are initiated using mobile handsets and other devices, either to directly purchase or to authorize payment for goods and services. With a clear policy in place, this initiative can be link to the rural banks in the country and it will become a nationwide project like M-PESA from Kenya.

He said: “Mobile Money services have transformed the way in which people handle their finances, allowing people to transfer money, make purchases and pay bills with a few key strokes on their mobile phones.”

At a round table discussion organised by Ghana Commercial Bank Limited (GCB) recently, its Managing Director, Simon Dornoo said “the government of Ghana must be seen playing a more central role by using the non-cash forms of payments.

Government, like any other government that is serious about moving into the cashless arena, should ensure that they as government are really role players of using and patronising the system. So for instance district assemblies should also use e-zwich for collection of tolls and other revenues to ensure accountability.”

“... a national policy that encourages more electronic-based transactions while discouraging physical cash-usage and circulation.”

These platforms provide cash management solutions which offer flexibility, total security and the convenience of accessing your money on your mobile phone wherever you are. It offers a virtual bank account on your mobile phone which allows you to easily and safely manage your cash in real time.

On some digital money platforms, you can send and receive money safely; pay your utility bills; TV subscription; buy airtime; pay for goods and services; and even buy life insurance.

Mobile telecom providers are now partnering with almost all the banks in Ghana. In total, over 4.5 million people are using services from these operators in some shape or form.

The Mobile Money solution is based on Banking Industry security standards. Accounts are password protected, data is encrypted, user authentication is required, authorization is profile specific, and account holder confidentiality is assured.

With these platforms, mobile money wallet opening is made to conform to Know Your Customer (KYC) requirements.

The wallet will only be opened by Authorized Mobile Money Merchants.

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Before a subscriber interacts with a customer service officer, the subscriber will be required to identify him or herself by answering unique authentication questions or by entering a PIN on mobile.

Even in the face of several benefits, building a cashless economy has also several challenges that try to derail its progress.

The first and perhaps the most pertinent of these challenges has to do with the issue of policy. There is the need for clear policies to be followed to achieve the full benefits of a cashless economy, including a national policy that encourages more electronicbased transactions while discouraging physical cash-usage and circulation.

It also needs Central Bank and the Government support in promoting this on relevant platforms. Neighbouring Nigeria set an example when the Central Bank instituted a cashless economy policy to, among other things, drive development and modernisation of Nigeria’s payment system in line with the country’s vision of being amongst the top 20 economies by the year 2020.

Also, as a country we need to expand our infrastructure and systems to the point where we are ready for a cashless economy, and electronic transactions are truly ubiquitous and sustainable. The initiators and handlers need to ensure with adequate security to avoid pitfalls such as cyber fraud.

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As seen on DStv/SuperSport

THE BLACK STARS IN

2014 FIFA WORLD CUP BRAZILTM ON SUPERSPORT

OFFICIAL BROADCASTER

SPORTS

Hosting Football Tournaments:

Blessing or Curse?

Wayne Nyarko

onths of protests have occurred in the South American nation of Brazil against the estimated USD 14 billion price-tag to be incurred for hosting the FIFA world cup, which started on June 12.

The 2010 World cup in South Africa witnessed a series of protests by bus drivers and private security personnel.

Thousands of South Africans staged a march to protest against lavish spending on the tournament and the sacking of security staff, inflicting an embarrassment on organizers. There was widespread anger among South Africans towards FIFA, whose demands for a smooth-running tournament saw the government pour R 33-billion (USD 4.3-billion) into World Cup preparations. The preparations for the World Cup were not been without protests, some very bloody. As Brazilians took to the streets to protest against overspending on the 2014 World Cup,

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the Poles and Ukrainians enjoyed a somewhat successful tournament when they hosted Euro 2012.

The UEFA Euro 2012 tournament which was co-hosted by Poland and Ukraine saw both governments pump in huge resources. Both Poland and Ukraine won plaudits for football matches that passed off free of the chaos, racist violence and technical breakdown some had predicted, albeit with a few skirmishes. Their respective

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international public images were much enhanced.

Even so, as Rio rioted, Poland was being subjected to a stream of less glorious Euro 2012-related news.

Prompted by the problems of some construction firms, there was pressure from ambassadors of six EU states wanting to know why the country’s roads authority had not paid road contractors’ debts totaling more than Euros 2 billion (USD 2.6 billion).

Then there is the problem of the stadiums’ solvency. The venues in Gdansk, Warsaw and Wroclaw posted significant losses in 2012, with the National Stadium in the capital estimated to be nearly Euro 5 million in the red, according to a report.

In January 2013, Poland transferred the management of the stadium to a company called PL.2012 +, saying a more commercial approach was needed.

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SPORTS Some Ghanaian fans cheering on their team at the ongoing World Cup in Brazil

concerts, and social events (which do not necessarily make use of the whole stadium). One senses that this third prong idea, including conferences and other corporate gatherings, was to be crucial to the stadium’s promise to turn a profit by 2015.

It was expensive to bring major international stars to Poland and Ukraine, where audiences could not afford the ticket prices comparable to those charged in Western Europe. The stadium ticket on a normal day event was Euro 30, but the range went up to Euro 250 for high profile games.

The firm appeared to have risen to the challenge with some verve. Its business plan proposed a three-pronged attack: the stadium will host sporting events,

Frustrated with the transport infrastructure and worried that the stadia constitute a small herd of white elephants, Poles’ enthusiasm for Euro 2012 has waned somewhat.

A recent survey showed a fall in the numbers who said they were satisfied with the way the country handled the tournament. But at 64 percent, it still remains high.

Low expectations of the political class, perceived as incorrigibly corrupt, meant that few Ukrainians were under many illusions that money spent on stadiums might have built hospitals if it weren’t for the tournament.

Some roads were improved and airports rebuilt (though the new terminal in Donetsk is manifestly far bigger than it needs to be), and most importantly, Ukrainians feel the tournament put their country on the map. At the beach bars and cafés on Trukhaniv island, in the Dnieper river in central Kiev, staff confirmed they got more and more foreign visitors and it boosted their revenue.

In Ukraine, as in Brazil, the state ended up paying for most of the infrastructure needed to host the tournament. It was supposed to be 80-20 in favour of private investment, and it turned out to be the opposite. Nevertheless, despite the gap between what was promised and what was delivered, the expectation of many was that, the net result for the Ukrainian economy should be positive.

The real effects will be in the longer term and putting figures on the economic benefits of organizing international sporting events is difficult. How to judge what investments would have been made anyway sooner or later, for example, or what necessary investments were set back because money was assigned to tournament venues? The psychological and public relations effects are also hard to quantify.

For what it is worth, a report produced for Poland’s Ministry for Sport and Tourism at the end of 2012 predicted that the tournament would have added 1.3% to the country’s GDP over the 2008-2020 period. A small victory, then.

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INFRASTRUCTURE

Closing the big gap: What has Ghana Infrastructure Fund got to do with it?

Ayuureyisiya Kapini Atafori

The infrastructure gap in Ghana is so big and wide it may take a century to close the gap with the provision of modern roads, railways, airports and seaports, houses, hospitals, schools and other such essential facilities that ease almost all human activities, especially commercial and business transactions. Infrastructure provides the backbone off which every economy grows but the absence and/or inadequacy of this pivot in many a country has stunted growth. ack of infrastructure has always been the bane of the country’s development since the 1960s when modernist economists counseled many African leaders to go on an infrastructure spending spree. Over five decades after independence, however, Ghana is yet to fully meet the requirements for modern air, maritime, rail and road networks, utilities, ICT backbone and more that it needs to develop economically and socially.

The deficit in the provision of infrastructure has always been a challenge for every government. The problem with the development of infrastructure is the huge money needed to pay for its construction. The Africa Infrastructure Country Diagnostic (AICD) 2010 Report revealed that Ghana faced a USD 1.1 billion efficiency gap every year, even though the country already spent USD 1.2 billion per annum on infrastructure, a figure that represented 7.5 percent of Gross Domestic Product (GDP) in 2009.

The 2012 Global Competitiveness Report (GCR) has identified inadequate supply of physical infrastructure as Ghana’s fifth most significant weakness. The GCR ranking means the country placed far behind the best performing countries in Africa in terms of the quality of infrastructure.

In March 2013, the Minister for Finance, Mr. Seth Terkper, told Ghanaians that there was an infrastructure funding gap of USD 1.5 billion a year. Addressing Ghana’s infrastructure deficit would require a sustained spending of USD 2.3 billion annually over 10 years, with more than half the amount expended in the power sector, according to research findings released in June 2013 by Mrs. Magdalene Apenteng, the Director of the Public Investment Division (PID) at the Ministry of Finance.

The current administration appears to be taking up the challenge of supplying adequate infrastructure. The 2014 budget has outlined a blue-print for fixing the deficit.

“Additionally, a National Long-Term Infrastructure Plan was prepared to address the challenge of inadequate and depreciating infrastructural facilities which constitutes a key obstacle to attaining socio-economic development. This plan served as an input into the National Long-Term Development Plan,” observed Mr. Terpker when presenting the budget in Parliament.

Expanding “Strategic Infrastructure,” especially oil and gas, roads, ports and special development zones such as the Savanna Accelerated Development Authority (SADA) and the Western Corridor in a manner that triggers multiplier effects on rejuvenating the productive sectors and attendant linkages to agricultural modernization is being factored into a National Medium Term Development Framework (2014 – 2017), the successor to the Ghana Shared Growth and Development Agenda (GSGDA 2010 – 2013), prepared by the National

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In the 2014 budget statement, Mr. Terkper noted that the government has embarked on a program of building massive infrastructure projects. The government procured a USD 3 billion Chinese loan, parts of which has been disbursed, for these projects. Top among them are the completion of the Bui Hydroelectric dam; the Gas Development Project; the rehabilitation of Western and Eastern and Central rail lines; the upgrading of the Accra-Cape Coast-Takoradi road; and the construction of the Eastern Corridor road. The government has also promised to put up 200 new community day senior secondary schools, and the ground has been broken for the construction of the first 50 schools. It pledged further to transform the ten polytechnics into technical universities and build a university in the Eastern Region.

institutions and development banks; the capital markets (including the stock exchange); pensions and mutual funds (including social security and insurance funds); and other funds. The GIF will be a quasi-fiscal body that is chaired by the Minister for Finance and have its own ratings on the domestic and international financial and capital markets. The GIF Debt Service Account (DSA), with the assistance of the Bank of Ghana, will be set up for designated domestic and foreign sovereign debt.

The GIF’s governance structure is such that the Board advises the Finance Minister on viable projects to be financed, including special purpose vehicles (SPV) such as joint venture (JV) and public private partnership (PPP) projects. It is envisaged that the GIF will issue special bonds to finance specific commercial projects. The GIF will be empowered to set up lending, escrow and other mechanisms for ensuring the success of its investments. “Once rare and limited to a handful of countries and infrastructure sectors, public-private partnerships (PPPs) have emerged as one of the most important models for the government to close the infrastructure gap,” World Finance has reported.

...the country’s “infrastructure deficiencies remain a major concern and obstacle to competitiveness.”

Despite the provision of infrastructure projects, Mrs. Marie-Laure Akin-Olugbade, Resident Representative of the African Development Bank (AfDB) Ghana Country Office, believes the country’s “infrastructure deficiencies remain a major concern and obstacle to competitiveness.”

The infrastructure agenda of the government is grand, but the money to pay for the choice projects is scarce. In 2013, Mr. Terkper issued bonds to finance infrastructure projects, but the oversubscribed bonds did not yield enough for spending on infrastructure.

This is where the Ghana Infrastructure Fund (GIF) comes in to try and square up the infrastructure deficit. In his 2014 State of the Nation address, President John Mahama stated: “This fund will enable us to disaggregate our debt profile and transfer infrastructure investments with a revenue generating capacity from the public debt.” On January 29, President Mahama inaugurated a six-member advisory committee of the GIF. Reasons for setting up the GIF are not far-fetched. “Currently, Ghana‘s financial and capital markets are constrained with limited availability of long term finance, both local and international, to support both the public and private sector infrastructure projects. The GIF will partner the private sector through linkages that include financing project SPVs, PPPs, mortgage finance and finance leases. Additionally, the GIF will create investment opportunities for institutional investors,” Terkper explains.

The sources of finance for the GIF include appropriations by Parliament, including the recently increased Value-Added Tax (VAT), Annual Budget Funding Amount (ABFA) portion for amortization and infrastructure development. Other sources are: escrowed and on-lent funds from prior investments; private or public domestic and foreign funds from multilateral

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Due to scarcity of funds, PPP is likely to become the dominant trend in project financing in Ghana. PPP has many apostles.

The most articulate advocate of PPP was the late Paul Victor Obeng, Chairman of the NDPC. “The PPP policy seeks to increase the availability of public infrastructure and also encourage and promote indigenous Ghanaian private sector participation in the delivery of public infrastructure and services,” Mr. Obeng said.

In June 2013, Mrs. Apenteng encouraged the use of PPP to help close the infrastructure gap and deliver efficient public infrastructure and services. The Minister of State in charge of PPP, Alhaji Rashid Pelpuo, indicated that the government was looking forward to new projects like energy and utilities, housing and agriculture to be financed under PPP modules.

The private sector is expected to help the government provide infrastructure and related public services through financing, design, construction and operation of the projects. Recognizing its importance, the government started a PPP program in 2010 to reduce the infrastructure gap. The national PPP policy was formulated and launched in 2013. The PPP policy is a dynamic document which requires life to be breathed into it to achieve the expected results. The PPP Bill has been laid in Parliament, and when it becomes law before this year ends, will support the implementation of the PPP policy.

But not everyone is optimistic about the prospects and success of the GIF. Some civil society organizations are skeptical and worried about the GIF following the example of others like the moribund Minerals Development Fund, the constrained Ghana Education Fund (GetFund) and Road Fund. Yet the proof of the GIF’s real mettle will be known when its board members and the Minister for Finance steer it to chalk milestone achievements that will put the cynics to shame.

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Development Planning Commission (NDPC). Dr. Regina O. Adutwum, Director-General of the NDPC, said in June last year that Ghana’s highest real GDP was expected to be recorded in 2017 when the full impact of the establishment of the GIF and the projected production of oil and gas from the Tweneboa, Enyera and Ntomme (TEN) fields come on board.

MANAGEMENT

Customer Satisfaction is not Sufficient J. N. Halm

For those of us sitting on the touchlines of the Ghanaian business playing field, keenly observing happenings in the system, these are exciting times. The competition is getting keener, not even by the day, but by the hour. The race is getting hotter by the mile and as in the animal kingdom, the ‘weaker’ species would be eaten up. The beneficiaries of the fruits of these times are no other group than those referred to as CUSTOMERS - the powerful ‘owners’ of all business ventures.

t is unfortunate that most of us are still not aware of the potential and power we possess as customers; a power that can cause a change in the way businesses are run in this country.

However I am of the opinion that soon and very soon, things will change. Like the voice of one that has seen the future, I stand atop the roofs to proclaim “Rejoice, ye customers, for the day cometh, and it is fast approaching, when ye will become so valuable that they will beg to have you.”

I recently visited a friend who incidentally happened to have been a customer of mine whilst I was with my former employers.

The conversation naturally led to how business was thriving and the present state of his relationship with my ex-employers. I was taken aback to have learnt that he had drastically cut down on his dealings with this financial institution. His reason? They had failed to do more than just satisfy him.

What made this revelation more surprising was the fact that this particular customer was deemed as a ‘very good’ customer, at least whilst I was still with them.

Do not get me wrong. I am not against satisfying your customers. Far from that! Satisfying your customers is extremely important. As a matter of fact it is the base or foundation on which to build a higher level of customer involvement with your company. The point I am making is that satisfied customers are not a warranty for business success. It is your duty to build the relationship to the highest level attainable, from just satisfied customers to advocates.

“Change or be changed” is the slogan for the now.

Do not forget that those you call customers are referred to, by your competitors, as prospects.

My first reaction was that of disappointment at my friend. How could he be so fickle to reduce his business dealings with a company just because they did not go beyond satisfying him? However I held back my criticism because years of dealing with customers have taught me that customers do things for their reasons, not ours. But how does a ‘very good’ customer just defect like that? This

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led me to the conclusion that in these times businesses find themselves in, customer satisfaction is simply not enough.

Customer satisfaction ratings can give businesses a false sense of security.

However, clients or customers do not become advocates until they believe you are working in their best interests. Customers become advocates if they know you are there to help them succeed in their respective ventures and not just out to get their hardearned money. If a customer can trace his or her success to something you might have done to help, no matter how small, you have an advocate at hand.

This understanding calls for a change in the way businesses deal with their customers. In this information-soaked, customeroriented society, businesses either change the way they deal with customers or it will be those customers who will do the

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MANAGEMENT

changing - to their competitors. “Change or be changed” is the slogan for the now. Do not forget that those you call customers are referred to, by your competitors, as prospects. Blink and they would swoop down on your clients like eagles on a prey.

In such an environment it is the business that best understands and caters to the needs of the customers that wins their hearts.

Are you satisfied with satisfied customers? Researchers have warned that you shouldn’t be.

In November last year, John H. Fleming, and Jim Asplund released certain interesting findings in their book “Human Sigma: Managing the Employee-Customer Encounter.” The authors divided customers who provide the highest rating of overall satisfaction with a company’s products or services, i.e.

“Customers desire more extremely satisfied customers, into two distinct groups: those who are than transactions - they want emotionally satisfied and those relationships. Businesses who are rationally satisfied.

on the part of everyone, no matter the job schedules or departments.

Everybody in the organisation, from the CEO to the sanitary officers, should direct their activities towards helping their customers must know that the days of to succeed. Mere satisfaction in Emotionally satisfied customers are transactional selling...are gone itself is not sufficient. The danger those that are extremely satisfied in relying on satisfaction surveys with the products and services and gone forever.” is that satisfaction levels are not the company provides and have indicative of the future actions of a strong emotional attachment to the customer.

Mere satisfaction is time sensitive and highly the company. inelastic, and should therefore not be heavily relied on as a standard measure for customer retention.

Rationally satisfied customers are also extremely satisfied with the company but, on the contrary, lack the strong emotional I pity businesses that are oblivious to growing changes in connection of the first group. buyer behaviour and are still living in the “prehistoric” times, when customers were grateful for being merely satisfied with Emotionally satisfied customers end up buying more products, a company’s services or products; a period when business did spending more for those products, or returning more often “favours” to customers by serving them. I pity these companies, to or staying longer with the business. However, rationally because if those that are satisfying their customer are not even satisfied customers were found to behave no differently than immune from defection, how about those that are not satisfying dissatisfied customers. Obviously my friend was a rationally their customers at all? A word to the wise may be sufficient, satisfied customer. The researchers tested this theory for various unlike mere customer satisfaction, which is not. industries and always came out with the same finding: rationally satisfied customers were as likely to defect as would dissatisfied The writer is the CEO and Principal Consultant of Exsellers customers. The question businesses have to ask themselves International, LLC, an avant-garde sales training and consulting therefore is whether their “satisfied” customers are emotionally firm involved in turning around and improving the sales or rationally satisfied. fortunes of its partners through cutting-edge training seminars, recruitment and placement of highly trained sales professionals, Simply satisfying customers by meeting their minimum and the provision of state-of-the-art sales-boosting products expectations (rational requirements) is not enough to beat and services. your competition and build a long-lasting advocate for your business. Fleming and Asplund advise that “to build the strong customer connections that produce enhanced financial benefits, a more complete view of customer requirements is needed, which incorporates an understanding of the emotional The writer is the CEO and dimensions of customer commitment.” Customers desire more Principal Consultant of Exsellers than transactions – they want relationships. Businesses must International, LLC, an avantknow that the days of transactional selling, when the focus was garde sales training and consulting solely on the transaction at hand, are gone and gone forever. firm involved in turning around We live in an era of relationship selling (or partnership selling). and improving the sales fortunes Super sales stars are super at building relationships. of its partners through cutting-edge training seminars, recruitment and Businesses must empower customer service personnel to placement of highly trained sales go above the normal call of duty to build longer lasting and professionals, and the provision of state-of-the-art salesboosting products and services. He blogs at www.exsellers. rewarding relationships. Customer service is not a department, blogspot.com. For details on upcoming training seminars it is a philosophy. It is a philosophy that should permeate the contact: 233-24-3157948/233-27-4930493 entire fabric of any business that intends to be around for long. or exsellersghana@yahoo.com Great customer service should necessarily involve a commitment

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Customer service is personal Yvonne MacCarthy

Based on observations and conversations, it appears that most of the poor customer service experiences occur not just because the customer service representative didn’t deliver, but rather because there are a lot of problems organizationally. Poor providers of customer service are typically understaffed and the conditions within the organization create a lot of stress. rom slow systems, inadequate information, the absence of some working materials and facilities, to unmotivated employees, one can be forced to feel some sympathy for the individual providing the service directly. Some individuals however make an effort to give their customers excellent service even in the midst of all the stress and bad working conditions. That is how it should be 100 percent of the time.

way they operate in the realm of customer relationships.

The place where customer service interacts with the customer is where individuals within the organization come into personal contact with the customer. This applies whether you are selling them a product, providing a service, or even if you are just giving information.

This effort on the part of any customer service representative usually redeems the experience especially when the individuals providing the service are nice and treat customers with kindness and respect regardless of their internal organizational issues.

This is not meant to imply that employees should consider doing things that are not in-line with their organisation’s ethos.

It also doesn’t mean that you would be willing to do things which would have an adverse effect on your organization. What it does mean is that your primary focus will be on the needs of the customer, rather than on your own personal desires. After all, if the customer’s desires are not fulfilled, they will not do business with you.

Were it anyway else, I am sure a lot more customers would go out of their way to find other alternatives to using certain services that they are paying for.

You are not putting your organization in second place when you put the customer first. When the customer is satisfied, the organization always gains.

This illustrates a very powerful point. Individuals have a huge impact on the viability of an organization simply because of the

For some people this is a difficult matter because it may take them outside of their own comfort zone. Typically we all take

To me, that kind of effort is really impressive.

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the path of least resistance. As it relates to the work within our organization, we prefer to do things that we are personally good at and enjoy. When a customer comes along with a need that makes most individuals work outside of their comfort zone, they panic.

We need to step outside our comfort zone especially when dealing with customers and make decisions that would offer our customers the best customer service experience.

So, every customer service representative needs to adopt the attitude that sees from the perspective of the customer. With that approach, all of the actions any representative takes will serve to promote the purpose of their organization.

A few basic steps should be consistent with any organization willing to make a difference with the customer service they provide.

Have the right attitude

Ask something personal

It is important not to be perceived as nosey but most people like to talk about themselves. They like to tell you how good their kids are, how well their sports team is doing or how successful their business is. Let them talk. At some “Let them talk. At some point you will be able to tie your product or service to something they have told you point you will be able they deeply care about.

The first step as an individual is to have the right attitude. Having a positive to tie your product or attitude and showing it impresses your service to something Don’t make people wait customers and helps you perform better.

Once you have the right attitude, you they have told you they Sometimes it is unavoidable, but to the highest degree possible, don’t make people can begin to take action to fulfill your deeply care about.” wait on you. Think about some of your customer’s hopes and expectations. own experiences. When you make a phone Remember, the goal is to make people call to someone in order to do business, or feel special. Most of the actions we might to make a complaint or just for basic information and you are take, in and of themselves, are not necessarily right or wrong as forced to stay on the line for longer than usual, how do you it relates to providing effective customer service. What makes feel? them right or wrong, from a customer service standpoint, is whether or not we are able to make our customers feel Remember, that even though most customers blame an satisfied. There are literally hundreds of things you could do to organization for bad customer service, they never forget the accomplish this. All of them are designed to help you establish individual who served them the bad service. As a customer rapport (a relationship) with your customer. Here I will list a service representative we should remember that any bad move few, just to get you thinking in the right direction. But don’t let goes a long way to either raise or lower our personal brand. this list be an end in itself. It is only a starting point.

That’s why it’s important to understand and take personal responsibility for the customer service that we offer.

Say “thank-you” Everyone likes to be appreciated. The simplest form of appreciation is to merely tell your customer “thank-you” for bringing their business to you. Remember to make it genuine.

This process can easily become mechanical. It doesn’t actually hurt for it to become a habitual expression, but if it is mechanical, it will be perceived as a greeting rather than an expression of appreciation. Your goal here is to show appreciation.

Smile (even on the phone) Smiling makes people think you like them and that you want them to be there. If it is appropriate, you can even joke around a little. It puts your customers at ease and makes them enjoy your company. People like to do business with people they like.

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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?”

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To Grow Your Business, Kill Competition (I) Julius Ceasar-Tokoli

A farmer invests his time, energy and financial resources to clear the land and cultivate it. As the crops begin to grow, though, he observes some weeds growing up alongside with them. What a farmer does in instances such as this is to control the weed. He does so either by uprooting or by applying weedicide. e does this because these weeds would compete with the crops for nutrients and could lead to stunted growth and low yields of crops.

Like those sinister weeds, there is a certain sinister concept or theory that is competing with good business ideas and practices for human and material resources and is causing stunted growth in businesses. And unless that theory is killed, management and business will continue to reel in difficulties. That sinister theory is competition!

According to Wikipedia, “in economics, competition is the rivalry among sellers trying to achieve such goals as increasing profits, market share, and sales volume by varying the elements of the marketing mix: price, product, distribution, and promotion.”

The same source continues to say that “it was described

by Adam Smith in The Wealth of Nations (1776) and later economists as allocating productive resources to their most highly-valued uses and encouraging efficiency. Smith and other

classical economists… were referring to price and non-price rivalry among producers to sell their goods on best terms by bidding of buyers, not necessarily to a large number of sellers nor to a market in final equilibrium.”

By the above definitions, competition might seem harmless and, in fact, beneficial. Yet subtly, its effect is very corrosive.

For instance, Wikipedia’s definition as “trying to achieve such goals as increasing profits, market share, and sales volume by varying the elements of the marketing mix: price, product, distribution, and promotion” may seem plausible. But stop to think. Does not this definition give the impression that there is some limited space called market and competitors are rivaling for a bigger share of that market in order to improve sales and thereby increase profits? If so what is involved in acquiring that sizeable market share? Does it not include such tactics as shoving, pushing and even deliberately ‘killing’ in order to achieve those “laudable” goals?

The definition becomes even much clearer when we look in the online dictionary Merriam-Webster which defines competition in business as “the effort of two or more parties acting independently to secure the business of a third party by offering the most favorable terms.”

The Webster’s Dictionary defines competition as “The act of seeking, or endeavoring to gain, what another is endeavoring to gain at the same time; common strife for the same objects; strife for superiority; emulous contest; rivalry, as for approbation, for a prize, or as where two or more persons are engaged in the same business and each seeking patronage; - followed by for before the object sought, and with before the person or thing competed with”. cont’d on pg 50

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among competitors, with very suicidal effects on business growth and development.

Negative Effects of Competition First, competition is wasteful. It inhibits the full utilization of resources effectively, contrary to what Adam Smith espoused and some economists still believe. These resources are either human or material. Let us see how they are misapplied in a competition.

In our modern dispensation, creativity and innovation are very vital for the success of any business entity that aims at a profit and at growth.

To achieve this, the human resource of Per the definition of competition above, “...much time and effort a company must have a broader view there are certain characteristics that go in order to come up with new ways of are invested in trying with it: strife, superiority, contest, and looking at problems/challenges and to figure out what a rivalry. If these are desirable traits that devising innovative solutions. However, should be espoused, then imagine a competitor intends to do when the aim is to outwit a competitor, home with these traits between spouses much time and effort are invested in and how to counteract and between siblings and you would trying to figure out what a competitor that move, instead of appreciate why there is so much lack intends to do and how to counteract that focusing on how best to of trust, honesty, altruism, satisfaction, move, instead of focusing on how best joy and many other beautiful traits in satisfy the sophisticated to satisfy the sophisticated needs and business, the workplace, society at large demands of today’s customer ingeniously. needs and demands and even sadly within the family!

This is the result of emulous contest of today’s customer which is inclined to imitate or copy ingeniously.” what the other is doing. Such unhealthy The Sinister Influence on duplication is a total waste of the critical Competition human resource factor of creativity. Worse yet, it renders the A debilitating influence on competition that helped in its strategic mission and vision statements of the organization promotion that I can identify is Herbert Spencer’s ‘Survival of ineffective and bogus. the fittest” philosophy, which he coined after reading Charles Darwin’s On the Origin of Species. He stated: “This survival of We see this playing out especially in what I perceive to be the fittest, which I have here sought to express in mechanical the three leading sectors of the services industry; namely, terms, is that which Mr. Darwin has called ‘natural selection’ telecom, banking and insurance. Invariably, we see players in or the preservation of favoured races in the struggle for life.” these sectors offering the same kind of services with little or Principles of Biology (1864, vol. 1, p. 444) no variations. And each one is playing it safe by waiting for

the other to move in order to know what course to take next.

Thus, even though Adam Smith had written on competition In effect, it has become like a game of chess. This amounts before Darwin’s On the Origin of the Species, belief in to a gross under-utilisation of the capacity of creative human evolution and its subtle influence which is rife in capitalist resource. The result then is, not the creation of wealth, but the systems has fuelled the spirit of competition by making many enhancement of poverty and impairment of better standards people believe that in order to survive, one has to compete with of living. the other and throw him out. And in the process, the favoured species succeeds in getting what is desired at the expense of the unfavoured one.

The author is the CEO/Managing Partner at Soleil Consults; Evolution promotes greed and self-interest. And since it has a Management, Strategy and IT firm influenced competition in a great number of ways, it is not located in Accra-Ghana surprising that those same traits have been subtly promoted (mlt@soleilvision.com)

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Topics for discussion at this conference are focused on recent challenges to modern national economies and business enterprises such as “Globalization and Challenges of the Modern World” under which subtopics like “Contemporary Economy and Globalization”, “The Economic Impact on Social Development and Democracy” and “National Economies between Liberalization and Intervention” will be looked at.

Date: 24th October, 2014 Venue: KP New York Conference Center - 109 West 39th Street, New York, NY 10018 (Midtown Manhattan) Contact: Call Domagoj Cingula on +385 (0)92 172 7218 or send email inquiries to dcingula@esd-conference.com and info@esd-conference.com

Africa Media and Democracy Institute Conference (AMDMCI)

The AMDMCI Conference is organized bi-annually and takes place in a selected African country; presentations at the conference are made by distinguished scholars and individuals from Africa and the rest of the world. The theme for the Accra Conference 2014 is ‘Media, Democracy & Development’. The Conference aims to examine the broad impact of the media on democracy.

Date: 6th – 9th August, 2014 Venue: NIC Conference Centre, Accra Contact: Mobile: + 233 20 0723197 or e-mail at info@amdmc.net

International Academic Conference in Paris (IACP)

This Conference seeks to elucidate a wealth of issues in all aspects of business management, health and social care sciences, management education, teaching and learning methodologies and many more. Contributions should therefore be of interest to scholars, practitioners and researchers in management in both developed and developing countries targeting a worldwide readership.

Date: 11-12th August, 2014 Venue: Hilton Paris Orly Airport Hotel, Orly Sud 267, Orly Aerogare Cedex, Paris, 94544 Contact: Call +0044208-8689883 or e-mail organizers at info@abrmr.com

Ghana Extractive Industry Safety Conference (GEISC) 2014

Ghana Extractive Industry Safety Conference (GEISC) 2014 has the central objective of identifying health and safety issues, risks and opportunities associated with the extractive industry, new trends, standard innovations and assessing their impacts on economic development using health and safety as a rally point, the conference will provide invaluable platform for networking and business opportunities in Ghana, West Africa and the world.

Date: 22nd – 24th of October Venue: Takoradi, Western Region, Ghana Contact: Call +233 20 4355249, +233 243362270 or email organizers at info@ghanasafetyconference.org

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International Congress on Economy, Finance and Business (ICEFB 2014)

The aim of the conference ICEFB 2014 is to offer a forum for honorable scholars and well-known professors to meet and discuss the cutting-edge researches on economy, finance, and business.

Date: September 8-10, 2014 Venue: ANA Crowne Plaza Hotel Grand Court Nagoya, 1-1-1 Kanayama-cho, Naka-ku, Nagoya 460-0023 Japan Contact: Contact organizers at CEFB.Conference@gmail.com

GHANA BUSINESS & FINANCE

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CONFERENCES & EVENTS

7th International Scientific Conference on Economic and Social Development

EXECUTIVE SELECTION Deputy General Manager, Commercial, Finance, Supply Chain & IS()

Legal Counsel, Corporate & Institutional Clients, West Africa (Standard Chartered Bank)

The holder of this position will oversee all aspects Finance, Commercial, Supply Chain and Information Systems Management. As part of the Leadership team in Ghana this role will form a key part of the Strategic Review Team in Ghana, and will be required to focus specifically on ensuring that these non-technical functions are given the focus required within the Business Unit to ensure that strategy is developed and executed in line with Group Strategy. The DGM will also play a vital supporting role in ensuring that their functional reports have the necessary challenge and support from the Group functional heads.

Location: Accra Minimum Qualification: Candidate must have a degree in Engineering, Science or Numerate degree with business/ commercial studies. He/she must have Extensive experience in the oil/gas sector with significant, demonstrable capability in general oil and gas management or a combination of the functions to be managed in this role.

Contact: Visit careers.tullowoil.com/talentcommunity to apply.

The role of the candidate would be to assist Corporate & Institutional client businesses execute transactions in Africa and to support products covered by the C&I segment (including Corporate Finance, Transaction Banking and Financial Markets). He/she is responsible for legal transactions and issues in relation to Corporate & Institutional client businesses. The role holder provides legal advice and transactional support to the relevant business and is responsible for driving the business forward. The role will have overlap with compliance elements and the role will require the candidate to provide compliance support on transactional and product matters together with compliance officers within the bank Location: Accra Minimum Qualification: Minimally, candidate must have a degree in Law and must also be a qualified lawyer, preferably in a common law jurisdiction. He/she must have experience in general commercial banking.

Contact: You can apply by visiting www.standardchartered. com and selecting Careers.

Senior Offshore Operations Superintendent, Petroplan Ltd - Ghana

Regional YALI Manager (Ghana) IREX

The candidate will be responsible for providing Coaching and Mentoring to the Offshore Facilities Leadership team in all aspects of their day to day business. This will include overseeing the safe and effective application of the facilities Safety Management System; ensuring the Management System is implemented safely; and effectively providing support for emergency response to the deputy OIM in the event that the Lead OIM is not available.

Location: Accra Minimum Qualification: Candidate must be analytical and personable with good Communication skills. He/she must have operations team leading / management experience as well as mentoring and training capabilities. He/she must also have a high level production and operational skills honed in national and international roles. Experience within West Africa would be beneficial.

Contact: Visit www.aplitrak.com to apply

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IREX seeks a Regional YALI Manager for Accra, Ghana to coordinate and manage activities for the USAID-funded Washington Fellowship for Young African Leaders program for West Africa. The purpose of this program to build the skills of young African leaders to improve the accountability and transparency of government, start and grow businesses, and serve their communities. This program will provide young Africa leaders across the continent with opportunities for professional development, networking, mentoring, and a range of support activities Location: Accra Minimum Qualification: At least 5 years of experience in international education and/or development with proven track record in successful program implementation and experience with USAID-funded programs preferred. Candidate must also have experience working in sub-Saharan Africa with youth development, education, and training programs.

Contact: Visit http://careers.irex.org/Openings.aspx to apply

GHANA BUSINESS & FINANCE

JULY 2014

OUTLOOK

Rivals Russia and China unite to end ‘The American Century’: An altered geopolitical landscape for emerging and frontier markets focused multinational companies and investors Recent developments in international politics have seen Russia and China moving closer together to present a united front which will effectively serve as a bulwark against United States and European intimidation and aggression.

Though experts believe this SinoRussian ‘union’ was always coming, the ongoing crisis in Ukraine which has seen the US and the EU slapping a number of sanctions against Russia has fast tracked this friendship. Damina Advisors, an independent international frontier markets risk research, due diligence and Africa focused M&A transactions consulting firm recently published a report forecasting how this new SinoRussian pact will shift the balance of power from the West to the East. GB&F presents excerpts of the report in this issue. eopolitical rivals Russia and China recently signed a number of historic strategic agreements that commits both governments and their key state-owned businesses to a series of coordinated intensive multi-decade actions to accelerate the end of the American-led unipolar geopolitical and economic world order.

Both countries seek a non US-led multi-peaked multipolar great power system where each major power’s respective traditional ‘spheres of influence’ are respected. India’s newly elected leader, who has previously vowed not to step foot in America except to attend the UN, together with Brazil, and South Africa may in coming months also possibly join this Russia-China anchored multi-polar axis.

An end to US hegemony will negatively affect western multinational corporations and investors. The sky high stock

prices of major global companies, premised on their global growth strategies, will have to re-adjust to a new hostile multipolar world order where some emerging and frontier markets could become permanently ‘closed.’ Western global multinational corporations and capital markets investors who have since the end of the Cold War in 1989 assumed a ‘flattening earth’ with predominant American-European political and economic values of liberal democracy, free trade, open capital markets, and laissez-faire capitalism, face an increasingly complex antagonistic competitive mercantilist business landscape. The 25-year surge in global multinational corporate revenues, since the fall of the Berlin Wall in 1989, which has sent the Dow Jones Index soaring over 520 percent (averaging a 20 percent yearly return), and the Nasdaq by over 840 percent (averaging a 33 percent yearly return) is set to reverse course in search of a new geopolitical equilibrium. cont’d on pg 54

JULY 2014

GHANA BUSINESS & FINANCE

53

OUTLOOK

sociopolitical system, value system and development path, of counteracting interference in other countries’ domestic affairs, of rejecting the language of unilateral sanctions, or organizing, aiding, financing or encouraging activity aimed at changing the constitutional system of another country or drawing it into any multilateral bloc or union.”

With the US financially beholden to Chinese savers, and Europe dependent on Russian energy supplies, the ultimate emergence of a multipolar order and the end of US global hegemony is not in doubt. The analytic question is “when” rather than “if.”

The Russia-China pact simply accelerates an oncoming natural historic geopolitical change in world affairs. Over the coming years, a multipolar world order with about ‘7 multipolar peaks’ The May 21 USD 400 billion 30-year gas deal between Russia’s is likely to emerge: (1) The US-EU-NATO, (2) Russia, (3) Gazprom and China’s China National Petroleum Corporation China, (4) India, (5) the African Union, (5) Brazil-Union of (CNPC), larger in value than the entire GDP of the United South American Nations and (6) Pakistan-Saudi Arabia-Egypt.

Arab Emirates, is just one node in a dramatically deepening web Unable to fit neatly within any regional geopolitical peak will of strategic accords which now binds both China and Russia are Japan, Iran and Israel, who will each remain independent to a coordinate diplomatic, military, geostrategic, economic, geopolitical outliers and epicenters of intra-peak geopolitical financial, technological and socio-cultural cooperation to tensions for years to come. While the operating software of catalyze the emergence of a non-US led multipolar world order. the US led unipolar order reflects domestic American liberal democratic, capitalist and free trade Russia and China, both ancient values, the emerging multipolar imperial powers on the economic “...the ultimate emergence system will also reflect the nonascendancy, seek an expanded of a multipolar order and liberal, non-democratic, protectionist, ‘lebensraum’ along their current authoritarian, traditional cultural borders - Russia in Eastern Europe the end of US global (Ukraine), and China in the South hegemony is not in doubt.” values of Russia and China.

China Sea. Together with other In the coming multipolar world order, BRICS allies, (India, Brazil and South companies who are not firmly aligned to and with their home Africa), China and Russia both aim to accelerate the emergence governments will suffer. Worse still, those whose, sales is almost of a non-American led multipolar world order where all major evenly divided among several geopolitically competing regions regional powers will have their historic ‘spheres of influence’ of the world. Most of the well-known global corporate brands respected by other major powers. The US as a matter of policy are set to face serious new headaches operating beyond their rejects the notion of ‘sphere of influence’ in its foreign policy home countries. The regulatory headaches that Silicon Valley doctrine. technology companies currently face in having to balance requests from the US National Security Agency (NSA) with The language accompanying the gas deal strongly suggests pressures from antagonistic foreign governments in Turkey, geopolitical considerations, “The parties (China and Russia) China and Russia to shut down websites will only intensify, and stress the necessity of respecting nations’ historic heritage, spread to other critical economic sectors. Will BP eventually their cultural traditions and their independent choice of quit Russia or stay?

Russian President Vladimir Putin & Chinese President Xi Jinping

BRICS leaders, from left, Indian Prime Minister Manmohan Singh, Chinese President Xi Jinping, South African President Jacob Zuma, Brazil's President Dilma Rousseff and Russian President Vladimir Putin.

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Will western banks join the EU and US in enforcing sanctions against Russia and China like they did on Iran? And at what price for their growth strategies? Will major international banks throw away their growth opportunities in India, China and Russia in order to remain complaint with US-EU regulations?

Simply put, the coming move in global geopolitics away from an American-led hegemonic predominance will have a major negative material consequence on the growth strategies and entry strategies of many of the world’s best-known brands.

GHANA BUSINESS & FINANCE

JULY 2014

Grab a copy of

GHANA’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

TOOL KIT

The 2014 Jeep Grand Cherokee EcoDiesel

If you’re looking for a midsize SUV that’s focused on fuel economy, you don’t have many options. If you go the hybrid route, there’s the Toyota Highlander Hybrid -and little else. Today’s diesel market consists almost entirely of the Volkswagen Touareg TDI. And while a few midsize SUVs offer gas-saving options, the gain in fuel economy usually comes at the expense of horsepower.

But for the 2014 model year, Jeep has rolled out a new choice for the fuel-conscious midsize SUV shopper: the Grand Cherokee EcoDiesel. t a quick glance, the 2014 Jeep Grand Cherokee EcoDiesel is a lot like any other Grand Cherokee.

But under the hood, it’s a world apart thanks to a 3-liter turbodiesel V6 that makes 240 hp and 420 lb-ft of torque.

While that makes the EcoDiesel less powerful than the gas-powered Grand Cherokee V6, the new engine has more torque than the Hemi-powered Grand Cherokee V8. In other words: It won’t feel slow when you put down your foot.

It will also return 21 miles per gallon city and 28 mpg highway -- far better than the V6’s 17 mpg city/25 mpg hwy.

So the Grand Cherokee EcoDiesel offers two main benefits: torque and fuel economy. But with that relatively low power figure, many shoppers may be concerned about how it drives. Our suggestion: Don’t be.

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That’s because the Grand Cherokee EcoDiesel drives just like the typical Pentastar-powered Grand Cherokee in most typical driving situations. In fact, it seems even quicker than the traditional V6 in city driving conditions, such as pulling away from a stoplight. Maybe its only drawback is on the highway, where passing can feel a bit labored.

But the new 8-speed automatic -- also now standard in the V6 -- helps to take care of that issue.

Of course, the Grand Cherokee EcoDiesel’s main purpose is fuel economy -- and that’s where it shines brightest. While the US Environmental Protection Agency says it’s capable of 28 mpg in 2- or 4-wheel-drive guise, it is in fact able to top 30 mpg while hypermiling on the highway -- a tactic that involves easing on to the brake and

GHANA BUSINESS & FINANCE

gas while staying at consistent cruising speeds.

But while the Grand Cherokee EcoDiesel can save you money at the pump, it’s not so wallet-friendly in the showroom. The problem: Jeep charges a $4,500 premium over the V6 engine and $2,300 extra on top of the V8.

To make matters worse, the EcoDiesel powerplant isn’t offered with the baselevel Laredo trim. That means drivers who want diesel have to step up to the luxurious Limited model, making the price of entry more than $41,000 with shipping.

For that money, drivers could have a Highlander Hybrid, which boasts better fuel economy and 3-row seating -- an important feature still not available in the Grand Cherokee. And while the Jeep will be better equipped, the Highlander comes standard with all-wheel drive, which is a pricey option in the Grand Cherokee.

The 2014 Jeep Grand Cherokee EcoDiesel is a highly capable entry in the world of fuel-efficient SUVs. Unfortunately, it’s priced closer to a luxury SUV than a regular midsize model. For drivers who don’t mind the $41,000-plus price tag, we suggest adding it to your shopping list. But for those who want to save money at the gas pump and at the dealership, we recommend shopping around.

JULY 2014

STATS & INDICES

Trading Results - GH Cedi as at Thursday 19th June, 2014 Share Code

Daily Interbank Forex Rates as at Friday 20th June, 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

3.0685

3.0711

Pound Sterling

GBPGHS

5.2306

5.2356

AYRTN 0.18 0 0.17

Swiss Franc

CHFGHS

3.4362

3.4384

BOPP 3.30 0 2.42

Australian Dollar

AUDGHS

2.8847

2.8895

Canadian Dollar

CADGHS

2.8347

2.8362

Danish Kroner

DKKGHS

.5604

0.5606

CPC 0.02 0 0.02

Japanese Yen

JPYGHS

0.0301

0.0301

EBG 7.98 0 7.10

New Zealand Dollar

NZDGHS

2.6739

2.6785

Norwegian Kroner

NOKGHS

.5006

0.5010

Swedish Kroner

SEKGHS

.4588

.4590

GCB

5.39 1,100 5.41

S/African Rand

ZARGHS

.2874

0.2875

GGBL

6.20 120,000 5.07

Euro

EURGHS 4.1791 4.1818

GLD

26.13 0 23.00

GOIL

1.00 2,000 0.95

Chinese Reminbi

CNYGHS

BCEAO

GHSXOF 156.86 156.96

GWEB 0.04 0 0.04

Dalasi

GHSGMD 13.05

13.06

HFC

Ouguiya

GHSMRO 96.34

96.42

Naira

GHSNGN 53.09

53.13

Leone

GHSSLL 1398.25 1399.44

PKL 0.06 0 0.06

WAUA

WAUGHS 0.1582 0.1582

PZC

0.79 100 0.57

SCB

20.56 920 18.09

0.4926

0.4930

AGA

37.00 0 37.00

ALW 0.06 0 0.05

CAL

1.04 8,700 0.87

CLYD 0.04 0 0.04 CMLT 0.16 0 0.15

EGL

2.50 17,100 1.80

ETI

0.25 7,300 0.25

FML 7.55 0 6.83

GSR 2.75 0 2.75

1.60 200 1.55

MAC 3.10 0 3.10 MLC 0.39 0 0.29 PBC 0.17 0 0.14

SCB PREF 0.52 0 0.55 SIC

Treasury Bill Rates

0.52 5,900 0.43

SOGEGH 1.17 400 0.85

as at Monday 16th June, 2014 to Friday 20th June, 2014

SPL 0.04 0 0.04 SWL 0.03 0 0.04

Period

Discount Rates Discount Rates

TBL

0.35 6,900 0.24

91 - Day

22.6907%

24.0552%

TLW

35.00 2,410 34.50

182 - Day

19.2342%

21.2808%

1 - Yr Note

-%

22.5000%

2 - Yr Fixed Rate Note

-%

23.0000%

JULY 2014

TOTAL 6.57 0 6.54 TRANSOL 0.03 0 0.03 UNIL 18.31 0 17.62 UTB

0.49 100 0.40

GHANA BUSINESS & FINANCE

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COMMODITIES

Month ending May 2014. Wholesale Prices (GH¢)

Unit Weight Accra Bawku Kumasi Tamale Techiman Takoradi Dambai this month last month Avg% Change Cassava(Fresh Tubers) Bag 91kg 61.00 N/A 34.00 80.00 36.00 62.40 50.00 53.90 54.42 -0.95 Cassava (Gari) Bag 68kg 108.00 115.20 169.00 116.00 76.40 130.00 116.00 118.66 119.18 -0.44 Cowpea (White) Bag 109kg 318.00 195.00 181.00 200.00 190.00 296.60 196.00 225.23 217.32 3.64 Groundnut (shelled) Bag 82kg 341.00 339.00 294.00 236.00 290.00 338.00 324.00 308.86 289.21 6.79 Maize (white, grain) Bag 100kg 110.00 65.00 102.00 57.60 79.40 107.20 76.00 85.31 79.61 7.17 Millet (grain) Bag 93kg 140.00 115.00 123.00 96.00 114.00 200.00 116.00 129.14 125.86 2.61 Rice (imported-unclesam) Bag 50kg 190.00 N/A 200.00 N/A 196.00 210.00 N/A 199.00 197.50 0.76 Rice (local-white) Bag 100kg 290.00 195.20 232.00 170.40 192.00 136.00 196.00 201.66 192.46 4.78 Soya Beans Bag 109kg 206.00 95.00 123.00 96.00 158.00 230.60 116.00 146.37 141.54 3.42 Tomato (cooking) Crate 52kg 420.00 75.00 166.00 97.60 207.20 396.00 108.60 210.06 151.29 38.85 Wheat (Grain) Bag 50kg 150.00 119.00 132.40 125.00 202.00 180.00 N/A 151.40 138.42 9.38 Yam (pona-medium) 100 tubers 250kg 344.00 250.00 246.00 167.00 284.00 396.00 232.00 274.14 291.00 -5.79

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

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

Groundnut (Shelled) The 82kg bag of groundnut continued its upward trend this month. A bag of the commodity was sold between GHc 236.00 and GHc 341.00 on the Tamale and Accra markets respectively. The average percentage change for the month of May was 6.79 over that of last month. The average price of the commodity was sold for an average of GHc 308.86 from last months GHc 289.21. The supply to the market has reduced because the commodity is in the lean season, This has caused the high prices.

Maize Maize recorded an average price of between GHc 57.60 to GHc 110.00 on the Tamale and Accra markets. The average percentage change for the month for maize was 7.17 percent higher than that of the previous month.The commodity to

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closed the month at GHc 85.31 from last months GHc 79.61.

May supply to the market has reduce, because farmers are cultivating the major season maize.

Tomato Average price of the 52 kg crate of tomato was sold between GHc 75.00 and GHc 420.00 on the Bawku and Accra markets respectively for the month of May. Generally tomato on the Ghanaian markets are still imported from neighbouring Burkina Faso. This has made the prices of the commodity relatively higher on the markets. Although traders have started bringing some of the local tomatoes to the market the quantities are not enough to cause any change in the prices across the markets. On the average tomatoes gained 38.85 percent to close the month at GHc 210.06 per crate from last months GHc 151.29.

GHANA BUSINESS & FINANCE

JULY 2014

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