GB&F June 2016

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JUNE 2016 / ISSUE 061 GH¢10.00

ICC g targetin ns a of Afric d at rejecte A GIMP confab

Branchless banking changing customers’ behaviour’

Ghana Entrepreneur Foundation honours great performers

Inesfly

fights malaria & boosts agric with new technology THE FIRST BUSINESS READ IN GHANA

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

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CONTENTS ISSUE 061 / JUNE 2016

on Oil, Gas and Power brought together many international and local government officials, experts, exhibitors and visitors to acquire and use the numerous latest products and services that were showcased.

22 Industry

Front Cover: Michael Sjodin CEO, Inesfly Africa

24 Science & Technology

6 Briefs

Snippets of business and financial news that occurred in Ghana, Africa and the rest of the world in May.

12 Economy

The informal economy in Ghana seems to be doing well despite the difficult economic situation. The fiscal and financial challenges are yet to break the back of informal sector operators.

In Ghana, banking halls are no longer the only locations where customers can access banking services. Money withdrawals, transfers, payments of utility and other services bills are now done via telephones and ATMs, especially telephones because of today’s high mobile telephony and Internet penetration.

What causes many companies to lose their sales professionals at such alarming rates? What are these companies doing wrong?

What can be done to curb the trend? These are some of the issues columnist Jerry N. Halm digs into.

One of the biggest mistakes most young traders focus on before venturing into foreign exchange trading is how to become a profitable trader faster.

20 Energy

The 7th annual Ghana Summit

48 Business & Management

Columnist Yaw Asamoah argues that, for Ghana to develop, Ghanaians need to ask themselves relevant attitudinal questions and then take action to change.

34 Agriculture

52 Perspective

Anthony Sedzro interviewed Michael Sjodin, the CEO of Inesfly Africa, and he revealed the potency of the company’s innovative ways of killing mosquitoes and insect pests with its micro-encapsulation technology.

Cocoa, according to a recent report by the United Nations Conference on Trade and Development (UNCTAD), is of increasing economic importance to both producing and consuming countries. For Ghana, cocoa generates export revenues, income, employment, supports education and more.

methods for treating biodegradable waste to create a marketable end-product that is easy to handle, store and use.

Compost is being accepted by the public.

40 SMEs & Microfinance

“Bootstrap financing is probably one of the best and most inexpensive routes SMEs can

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.

Japanese carmaker, Mitsubishi Motors, introduces onto the Ghanaian market its most technically advanced Sports Utility Vehicle (SUV) ever produced, the Pajero Sport. The Pajero Sport is classy, super-inviting; and assures driving comfort.

“We communicate daily with our clients, customers, work colleagues and family members.

We have to communicate to derive maximum benefit for our business and personal life,” notes Yvonne Ohui Maccarthy.

54 Events

38 Composting is one of several

Find us online at www.ghanabizfinance.com

JUNE 2016

GB&F editor Ayuureyisiya Kapini Atafori, in part one of this article, details the discussions held at a GIMPA confab on the International Criminal Court (ICC) and Africa. At the wellpatronised conference, the targeting of Africans by the ICC was rejected by majority of participants. The related ICCcontroversy contention is that Hissein Habre’s life imprisonment sentence makes a strong case for Africa to have its own Criminal Court.

50 Automobile

18 Finance

MTN unveiled a strategic plan to keep its lead in the telecoms market at the launch of its 20th anniversary.

42 International Law

30 Cover

16 Corporate Progress

Why is the sea water salty and how does it happen? Why is fresh water not salty? These questions are that columnist Dr Nana Ama Browne Klutse answered in her piece on the ocean and its saltiness.

26 Communications

14 Banking

The 7th Ghana Entrepreneur Awards recognised and honoured outstanding Ghanaian and nonGhanaian entrepreneurs to serve as a motivation for budding entrepreneurs.

explore when raising capital. It utilises unused opportunities that can be found within a business by simply managing your finances better,” suggests columnist Yaw Ohemeng Kyei.

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

56 Stats & Indices

Figures speak louder than words for Ghana’s economy.

58 Commodities

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

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

GHANA BUSINESS & FINANCE

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General Manager Josiah Spio-Garbrah jspiogarbrah@ghanabizfinance.com +233 264 510 396 Editor Ayuureyisiya Kapini Atafori editor@ghanabizfinance.com Columnists Jerry Halm Yaw Asamoah Dr Nana Ama Browne Klutse Yaw Ohemeng Kyei Contributors Martin Luther C. King Oppong Baah Anthony Sedzro Kennedy Addai Kuffour Adnan Adams Mohammed Ebenezer T. Hanson Design & Production Manager Benjamin Tetteh btetteh@ghanabizfinance.com Circulation & Subscription Ernest Awo subscription@ghanabizfinance.com Editorial Committee Prof. Paul N. Buatsi Prof. Kwame Addo Ms Johanna Awotwi Mr Gaddy Laryea Mr Ray de Bono Mr Nana Robert Mensah Mr Frederick Alipui Ms Dede-Esi Amanor-Wilks Ms Nana Spio-Garbrah Office Location Ghana Business & Finance African Business Media House No. 7 Lamb Street (off Farrar Avenue) Adabraka, Accra, Ghana Mailing Address P. O. Box O 772, Osu, Accra, Ghana Tel: +233 302 240 786 Fax: +233 302 240 783 enquiries@ghanabizfinance.com Brand Advisor Dmax Studios in Malta, EU. (www.dmax.tv) Credits GNA Daily Graphic radioxyzonline.com Mergermarket Group ghanabusinessnews.com

myjoyonline Bloomberg citifmonline Corporate Council on Africa

Ghana Business & Finance magazine is published by

“The essence of education…is the transmission of values, but values do not help us to pick our way through life unless they have become our own, a part, so to say, of our mental make-up. This means that they are more than mere formulae or dogmatic assertions that we think and feel with them, that they are the very instruments through which we look at, interpret, and experience the world.”

– Commentary on Ernst F. Schumacher’s ‘Small Is Beautiful’ The universal importance of Education is axiomatic. Thus Nelson Mandela says: “Education is the most powerful weapon which you can use to change the world.” “Education is the key to betterment in this modern times,” sings a young reggae musician. All over the world, Education is considered by many people as a socio-economic equaliser. Education has made many obscure persons prominent; and many poor persons rich.

What is education? Not to be technical, Ernst F. Schumacher’s dictum that “Education is what remains when everything else is taken away” may seem an understatement, but it is profoundly apposite. Not dissimilarly, Albert Einstein states: “Education is what remains after one has forgotten everything he learned in school.” Education involves teaching, training and learning – generally the transmission or impartation of facts, figures, concepts and ideas as knowledge and the transfer of skill to someone via a channel of communication.

Epistemologically, human beings also acquire knowledge through experience and experimentation. In the past, the human desire for, and quest for, order in society necessitated the methodically passing on of knowledge to individuals and groups, leading to the birth of formal schooling and pedagogy. The process of socialisation begins with parents at home but it is at school that the process is perfected and finalised.

It has been generally observed, and is accepted by many educationists and development experts, that the standard of education in Ghana has declined over the decades since independence. If you did not know this proven truism, then you have not interacted or worked with Gold Coasters who completed Standard Seven (my late father, Corporal (Rtd.) Joseph A. Atafori, was one) or who hold Cambridge O’Level and A’Level certificates. You can’t claim ignorance of this fact when you have been through Middle School or Preparatory School; completed Secondary School Form Five and obtained O’Level, and finished your secondary education and had A’Levels. When you, like my good self, have O’Levels and A’Levels and have taught students at the Junior and Senior Secondary schools, you won’t doubt that our standards of formal knowledge impartation, acquisition and application and transfer of skills has dwindled drastically.

The state of the education system in Ghana was aptly captured in an article titled ‘Is our educational system in shambles?’ authored by Dr Albert O. A. Tsolu and published in Daily Graphic of May 30, 2016. “Ghana’s education that was the envy/cynosure of Africa has dwindled chaotically with majority of students in many of our institutions hardly able to spell/pronounce words appropriately, do basic mathematics correctly and being oblivious of geographical locations due to wrong calculus in educational policy implementation over the years,” Dr Tsolu argues. In the same piece, he earlier succinctly points out: “Lackadaisical performance in public schools, in particular, hinges on lack of adequate supervision/inspection, seriousness and respect for teachers and education in general to encourage the downtrodden to pursue it.”

The well-known continuing, but worrying, performance dichotomy between the public schools (pejoratively called ‘cyto’) and their private counterparts in the country is a crystalclear indication of the malaise in the education system. It is disconcerting and dismal that the slope-wards trend is persisting despite the formulation and implementation of certain policies. It is sad and pitiful that politicians, policy-makers, technocrats, researchers, teachers and students are currently slipping down the education ravine together with the system to the abyss. Saddest part of it all is that the stakeholders and the public are complaining daily about the falling educational standards, but the more they complain the more things are getting worse.

Ghana is fortunate to have numerous educationists who have attained guru status in the field and study of Education like Senior Statesman K. B. Asante, Professor J.S. Djanmah, Prof. Ivan Addai Mensah, Prof. Jophus Anamuah-Mensah, Prof. D.E.K. Amenumey, Prof.

Christopher Ameyaw-Ekumfi, Prof. Dominic Fobih, Prof. Kwesi Yankah, Prof. Naana Jane Opoku-Agyemang, Dr Patrick Awuah, Anis Hafar and many others. With this high calibre of experts in education, why should our education system be wobbly, and wallow in disrepair?

The policy recommendations by the committees chaired by some of these teaching-learningand-research luminaries are spot on. The recommendations in the reports churned out by the committees have improved the education system to some extent, but not meaningfully and substantially. It is either that the policies are wrong in the first place, or their implementation is flawed- both omissions resulting in undesirable and deleterious consequences.

Ghana’s contemporary political and educational leaders owe it as a duty to the country to fix our failed education system now in order to open doors for personal and national development. Else, posterity shall judge them uncharitably and condemnably.

Ayuureyisiya Kapini Atafori Editor (+233 024 2385374)

JUNE 2016

Mail to the Editor

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

GHANA BUSINESS & FINANCE

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EDITOR’S SUITE

Fix our failed education system to open doors for personal & national development

GHANA BRIEFS

AfricaOnline’s new office to make it leading ISP AfricaOnline Ghana, the premier Internet Service Provider (ISP) in Ghana, has relocated its headquarters together with its core network and Data Centre facilities to Ridge Towers in Accra.

The move follows the company’s recent investment in the latest Radwin5000 Jet fixed broadband wireless access technology network in February. These changes are set to help maintain AfricaOnline’s position as a leading ISP, with over 20 years’ experience in serving businesses.

Kwadwo Ohemeng Asumaning, Managing Director of AfricaOnline, stated that “the new location on 9th floor of Ridge Tower, previously MTN’s offices, will ensure AfricaOnline is closer to its customers, can provide improved visibility as well as enable easy access to the offices for customers and stakeholders.” Asumaning noted: “AfricaOnline Ghana has further potential and the investment in the Radwin network as well as the brand and location changes have resulted in stable network improvement and strong brand positioning. We look forward to continued success and an increase in our market share within the ISP and managed services sector.”

AfricaOnline is part of Gondwana International Networks, a Pan-African communications service company and one of the largest VSAT operators in Africa through its operating brands, AfricaOnline and iWayAfrica. The consistent awardwinning group has a physical presence in 10 countries in Africa, and offers services in an additional 34 countries via its distributor channel partners.

Business delegation on maiden Mexico visit H.E. Maria de los Angeles Arriola, the Ambassador of Mexico to Ghana, held a reception for the members of the Ghanaian delegation to Mexico at her residence in Accra. The delegation was on visit to Mexico under the auspices of the Mexican embassy. In addition, the delegation visited two other countries of the Pacific Alliance which include Colombia and Peru.

On May 21-27, the mission, composed of 10 private business and government officials, including Mawuena Trebarh, the Chief Executive of the Ghana Investment Promotion Centre (GIPC). The delegation explored investment and business opportunities in Mexico in sectors such as automotive, airport services, advertising, construction, agriculture, agro-food processing and trade. The mission participated in the 2nd Mexico-Africa Business Forum organised by the Mexican business promotion agency, PROMEXICO, within the framework of the Week of Africa hosted by the Ministry of Foreign Affairs. In June, PROMEXICO, the counterpart of the GIPC, will lead the First Mexican Business Mission to make a reciprocal visit to Ghana.

Turkey Embassy exposes TUDEC’s activities The Embassy of Turkey has exposed the activities of the Ghana-Turkey Co-operation and Development Association (TUDEC) and Galaxy International School which the embassy deemed to be dubious. “Galaxy International School and TUDEC try to lure Ghanaian people and take advantage of them for their own interests. They offer scholarships and business opportunities to influence the decision makers in Ghana as well,” a recent press release issued by the embassy in Accra stated.

The release said the affiliated arm of the two organisations, TUSKON, is not active. It said they have been misleading the public through the media, but the embassy “deems it necessary to bring to the attention of the Ghanaian business people and public the true nature of Galaxy International School and TUDEC.

GNCCI to launch 5-year strategic plan

Turkish Airlines stages golf tournament in Accra Turkish Airlines has rewarded the first winner of its Golf World Cup tournament with a Business Class ticket to Beret, a coastal golf resort town in Turkey, in October this year. Single handicapper Yao Dogbe, who shot 46 points to take home the trophy, will participate in the World Gold Cup in Beret. The golf tournament, which was held at the Achimota Golf Club in Accra, saw many seasoned golfers and corporate executives taking part in highly competitive categories. The winner will also experience Turkish Airlines’ awardwinning Business Class services and enjoy eight nights’ accommodation in a 5-star resort in Belek, Turkey’s golf coast. Winners at the Grand Finals will go on to play in the Pro-Am at the Turkish Airlines Open. Present were Osagyefo Amoatia Ofori Panyin II, the Okyehene, H.E. Nesrin Bayazit, Turkish Ambassador to Ghana, and Dincer Eroglu, Country Director of Turkish Airlines, among others.

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GHANA BUSINESS & FINANCE

The Ghana National Chamber of Commerce and Industry (GNCCI) is set to outdoor a five-year strategic plan to support the industrial sector in Ghana. The strategic plan, which will be unveiled this June, is expected to position the country’s industrial sector as an attractive environment for businesses to thrive.

Nana Dr Appiagyei Dankawoso I, the President of the GNCCI, who revealed this at the inauguration of a new committee of the chamber in Accra, pledged the GNCCI’s commitment to help the government to fast-track the economic development of the country with a special focus on trade and the agricultural sector.

JUNE 2016

BANKING

Branchless banking to change customers’ behaviour

BY UTCHE OKWUOSAH

The sign of the times says that better days lie ahead for the banking industry if the promises of technology are anything to count on. As new technology continues to diminish physical and geographic boundaries in communication and interactive business transactions, the prospects of borderless rendering of services are brighter and brighter by the day. That is why online buying and selling have become a common marketing behaviour in the world, not to mention the now burgeoning mobile money services and the seeming pussy-footing online banking.

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n all these, in Africa mobile money or mobile financial services appear to be spearheading the advance into the new age digital reality. An overview of the African situation indicates that there are more than 411 million mobile money accounts in 93 countries. More people are now able to access financial services using basic technology than before, especially in Africa. That is, according to, the 2015 GSMA State of the Industry Report on Mobile Financial Services. The report states that the registered mobile money accounts worldwide grew by 31 per cent. Mobile money services providers process an average of 33 million transactions each day. These accounts are available in 85 per cent of the countries where most people lack access to a formal financial institution.

In a recent review of the GSMA 2015 Report by the MasterCard Foundation, three highlights were made about how the services offered by Mobile Network Operators (MNOs) are evolving. These are: Growth in active usage The number of people in developed

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countries who actively use digital account provided by an MNO grew from 103 million to 134 million last year. The share of people actively using these accounts increased in SubSaharan Africa, especially in West Africa, bringing the total number of active users there to 84.3 million.

More providers are offering services at scale: more than 30 services have over one million active users (compared to only 21 services a year ago); and seven services have more than four million active users.

Narrow use cases When measured in terms of value, most of the money moving through these accounts is used to buy airtime. But when measured in terms of frequency of usage, most people are using these accounts to send money to others. No doubt, the new technological pathway to extend financial services to those excluded from the formal financial service system opens a valuable vista to how the unbanked can easily be reached.

If this makes sense, then, according to the MasterCard Foundation, it sets the stage “for an increased emphasis

GHANA BUSINESS & FINANCE

on making e-wallet integrated into the economy and more useful for low income clients.� Now, could the need to exploit the lingering inability of banks to reach the growing number of the unbanked the motive behind the springing up of digital banks abroad in recent times? The pioneers of this new wave of banking are saying that, more than that, they are simply acting in sync with the technological realities of the times, and taking bold steps to make technology-driven branchless banking a living reality.

Late last year, Atom Bank, a British bank that is wholly digital, received its full licence to operate from the Bank of England. Over a year later, the non-traditional bank swung into operation in April 2016. Operating without any physical locations, Atom Bank offers services through an application via mobile, Internet, and eventually desktop computer services and wearable devices. The bank will offer a full range of consumer and business accounts, loans and savings products. It would provide a customer service team available via phone, email and social media. Users will be able to pay in cash

JUNE 2016

FINANCE us say you made 10 grand on a trade, how would you feel if you immediately gave that much money back? Well, if you are giving back US$100 winners on a small account, you would be giving back US$10,000 winners on a big account. You need to get all of these issues fixed before you trade bigger amounts of money. So once again, be glad that you do not have a big account yet. Yet focus on the process and on becoming a good trader.

Trading a small account is not a disadvantage, especially if you are relatively new to trading and you are not yet a consistent trader. How big your trading account is plays no importance in your overall trading performance or trading skill. Sure, if you have a bigger account you can trade larger position sizes and potentially make more money. But if you do not know HOW TO TRADE, all the money in the world would not do any good. So, learn how to trade first. Focus on the method and enjoy the journey. Stop worrying about making money fast or getting rich and quitting your job because the less you focus on those things, the more likely they are to happen. Forex trading needs a plan, a process watch and execution strategy and abiding by all these is what it takes to be a professional trader.

Try and have forex journals Try and have forex journals like the one below for easy guidance: THEN you are going to have to accept some realities of the situation. You would not be taking a lot of trades; instead you will be trading like a sniper. You will be trading small position sizes on a small account; that is if you want to manage risk properly. Trust us, you do want to do that. You NEED to do that to not only to build your account but to stick around long enough to learn proper trading skills.

Money cannot motivate you at this point. Instead, be motivated by learning proper trading processes and habits, i.e., staying disciplined and patient / following your trading strategy to the T. You cannot think about ‘recovering’ your losses…that’s the wrong mindset and it will only lead to more losses. Why it’s ‘so hard’ to build a small account.

Take one step forward As mentioned earlier, you probably feel like you need to take one step forward and two steps back sometimes with your trading. On a small account, this can be maddening because you feel like you are never going to build it. Well, you need to focus on holding onto profits. Do not give back your winnings on the very next trade because you over-traded and were greedy. Imagine you are trading a US$100,000 account. Let JUNE 2016

FOREX JOURNAL Date – Time Frame – Set up – Product –

Lots – Long/short – Tick value –

Price In – Price Out – Stop loss – wrong Profit & loss – Initial Risk in $ – R –

Date when your trade is entered The time frame you are entering on The trading set up that trigger your entry Financial product that you trade.

E. g. Apple, Gold, Eur/usd Position size you entered Direction of your trade Value per pip. E.g. 1 standard lot of Eur/usd is US$10/pip Price you enter your trade Price you exited at profit or loss Price where you will exit your trade if Profit or loss from this trade Nominal risk value of this trade Your initial risk of this trade.

E.g. If you made two times your initial risk, you made 2R.

Source: Media Team of Futurepip.

Mobile: +233 24533 1185; +233 57767 4904.

Tel: +233 302903053/+233 302 260 344; Fax: +233 302 258811/+501 2232143; Skype: micnii1; https://www.facebook.com/futurepipfx; https://twitter.com/futurepipgh, http://futurepip.tumblr.com, www.pinterest.com/futurepipgh. www.futurepip.net

GHANA BUSINESS & FINANCE

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INDUSTRY

7th Entrepreneur Awards honour outstanding performers

BY ANTHONY SEDZRO

The 7th Ghana Entrepreneur Awards was held at the Banquet Hall of the State House, Accra, last month to recognise and honour outstanding Ghanaian and non-Ghanaian entrepreneurs to serve as a motivation for budding Ghanaian entrepreneurs in the small, medium and large enterprises.

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he corporate-spirited event was themed ‘The Role of Entrepreneurship in Economic Growth and Private Sector Development.’

The awards ceremony is organised annually by the Entrepreneurs Foundation of Ghana (EFG). The initiative is endorsed and supported by the Ministries of Trade and Industry, and Finance.

The glitzy awards gala was graced by Dr Ekwow SpioGarbrah, the Minister for Trade and Industry, members of the diplomatic community, entrepreneurs, businesspeople and a section of the media.

High-level diplomats present included H.E. Jon Benjamin, the British High Commissioner to Ghana; H.E. Robert P. Jackson, the United States Ambassador; H.E. Sun Baohung, the Chinese Ambassador; and H.E. Nesrin Bayaz, the Turkish Ambassador. The other envoys were H.E. Laura Carpini, the Italian Ambassador to Ghana, 22

H.E. Irene Vida Gala; the Brazilian Ambassador and H.E. LyeoWoon Ki, the South Korean Ambassador.

The rest are H.E. Francois Pujolas, the Ambassador of France; and H.E. Adekundi Sonaike-Ayodeji, the Nigerian High Commissioner. A host of other high-profiled Ghanaian and foreign dignitaries were also in attendance.

Dr Spio-Garbrah, who was the guest of honour, seized the opportunity to repeat his Ministry’s pet advocacy for the judicious reduction of banks’ high interest rates and for the patronage of Made-in-Ghana products and services. He expressed worry about the prevailing excessively high interest rates on loans extended to entrepreneurs. He disclosed that a team of academics, economists, experienced business-people and policy makers had deliberated and produced a document on interest rates in Ghana. He said the document had been sent to Cabinet to deliberate on in order to help reduce

GHANA BUSINESS & FINANCE

the high interest rates in the country to cushion entrepreneurs.

Trade and Industry Minister’s speech The Trade and Industry Minister built his speech with an illustration on the acronym ‘PROFIT.’ He explained that ‘P’ represents ‘Profit.’ The overall goal of entrepreneurs is profit-making, and for this to be achieved, there ought to be entrepreneur-friendly policies which would help businesses to succeed. The letter ‘R’ is for ‘Regulation’ of the enterprises. The letter ‘O’ stands for the ‘Operational’ affairs of the business.

The letter ‘F’ stands for ‘Funding.’ Dr Spio-Garbrah said businesses needed adequate cash to operate, stressing that equity (shares) should be the preferred form of funding instead of debt (loans and debentures). He added that this thinking informed the government to establish a GHS10 million fund to support young entrepreneurs with innovative ideas for setting up start-up businesses. The letter ‘I’ is for ‘Interest JUNE 2016

COVER

Inesfly

fights malaria & boosts agric with new technology Malaria is one of the biggest causes of maladies in adults and children in Africa, and Ghana is not excluded. The search for a solution for preventing malaria, an ailment caused by protozoa called plasmodium which is carried by the female anopheles mosquito made Inesfly Africa, a wholly-owned Ghanaian company, to develop vector-specific products with its new technology which are helping prevent malaria.

ANTHONY SEDZRO interviewed Michael Sjodin, the CEO of Inesfly Africa, and he revealed the potency of the company’s innovative ways of killing mosquitoes and insect pests with micro-encapsulation technology.

From the interaction, the reader can understand that Inesfly’s products are a must use for every household in Ghana, and the rest of Africa.

GB&F: How did Inesfly Africa Limited start operations?

Michael Sjodin (MS): Our journey began in 1996 when a Spanish businessman called Santiago Mateo created INESBA (Industria Española de Barnices S.L.), a family company focused on high-quality lacquers and varnishes for furniture. Years later, the company incorporated a Research & Development (R&D) Department which was directed by Santiago´s daughter, Dr Pilar Mateo. From the beginning, Pilar´s aim was to research new technologies on paintings and coatings by applying her expertise on micro-encapsulation. As a result of these investigations, new products were invented by the company and a new name arose: Inesfly S.L. Its core mandate was to develop healthy products and engineer processes for controlling vectors that transmit endemic diseases in the world.

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Today, Inesfly is made up of a complex team of scientists, innovators, trailblazers and empathetic individuals who have a unified vision of bringing better health to humans all over the world. Due to the international success of our technologies, the head office in Spain was named Inesfly Corporation SL. As part of our expansion plans, Inesfly Africa started operations in Ghana in 2013. We launched our new state-of-theart factory in 2015.

We are a wholly-owned G h a n a i a n company, with 90 per cent ownership

by Mr Saeed Fakhry and Mr Hayssam Fakhry, who are also the owners of Interplast G h a n a Limited.

Inesfly Africa is a subsidiary of Interplast.

GHANA BUSINESS & FINANCE

JUNE 2016

AGRICULTURE

Cocoa farmers deserve government’s increased support

BY OPPONG BAAH

Cocoa, according to a recent report by the United Nations Conference on Trade and Development (UNCTAD), is of economic importance for producing and consuming countries. It generates export revenues, income and employment. Cocoa is an important ingredient in the confectionery, food and beverages, the pharmaceutical and cosmetics industries.

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nsuring sustainability of cocoa production is critical, particularly at a time when most young people do not consider farming, including cocoa farming, a viable business choice.

In the case of cocoa, this is probably due to the low profitability of farming and the relatively poor living standards of cocoa growers. In order to make cocoa farming a more viable source

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of livelihood so as to attract younger people and ensure a sustainable global cocoa economy, it is essential to reorganise the cocoa farming business to enable farmers to obtain higher prices.

Cocoa has been the mainstay of Ghana’s economy since decades, and the crop still is the lead agricultural export commodity. According to the Ministry of Finance, “cocoa has been

GHANA BUSINESS & FINANCE

the backbone of this country‘s economy for over a century” (Budget, 2014).

Cocoa production is predominantly dominated by rural folks who largely depend on its cultivation as their main source of livelihood. Cocoa cultivation has significantly increased household incomes and the economies of most rural communities. Cocoa cultivation spans two seasons – from October to June is the main crop season, and the

JUNE 2016

SMEs & MICROFINANCE

BOOTSTRAP FINANCING:

panacea to problems facing SMEs

BY YAW OHEMENG KYEI

Linda Fianko, 41, is a businesswoman who deals in hardware. Her shop is located at Nkawkaw, Eastern Region. She has been in business for 15 years but her business has not seen any relative progress. She is very honest and prides herself that she pays her debts to financial institutions on time. She has been taking loans from Buffett Microfinance for the past ten years and she spends almost all her profit paying for loans. Hence, the little progress in her business and life.

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inda thought her competitor was tormenting her because she was doing well in her business. Her competitor was doing well because she was basically employing bootstrap financing. But Linda, upon explaining her predicaments to a consultant, it came out that her problem is not that of an evil spirit as she thought.

It lies in her inability to use bootstrap financing in managing her business.

The consultant asked her to pay off all her debt and stop taking loans from the microfinance company. The consultant then negotiated with her suppliers who hither to were selling goods to her for cash. Now the suppliers decided to sell to her on credit for two weeks.

It came to light that the difference between credit and cash price was less than five per cent. The consultant also encouraged her to use cheques in all her transactions instead of cash since cheque could be stopped but cash cannot be stopped. He also helped her implement several other bootstrap financing strategies. After three months, her business experienced a boom. She did not have cash flow problems and she managed to expand her business.

She started enjoying the real fruit of her labour.

How many Linda Fiankos do we have in Ghana who are blaming their predicaments on competitors and other innocent people when, in most cases, the problem is very near them?

Bootstrap financing is a method that has worked for several business people within the SMEs sector. To be able to use the bootstrap financing strategy, one must be honest and trustworthy. When individuals are thinking about raising money for a business venture, one of the first things that they consider is whether to opt for internal or external funding. Because of the nature of the economy, most of 40

them end up using their own money and later consider bootstrap financing.

This is one of the most popular forms of internal funding because it relies on your ability to utilise all your company’s resources to free additional capital to launch a venture, meet operational needs or expand your business.

The best and most inexpensive routes Bootstrap financing is probably one of the best and most inexpensive routes SMEs can explore when raising capital. It utilises unused opportunities that can be found within a business by simply managing your finances better. Bootstrap financing is a way for pulling your business up without

GHANA BUSINESS & FINANCE

the help of others. Bootstrap financing can be defined as a creative way of extending credit as far as possible.

There are a number of advantages to using the various methods of bootstrap financing. Amongst them, firstly, it allows you to free yourself from paying huge interest associated with debt and its negative effect of financial distress and bankruptcy cost. The interest that would have been paid could be used to buy a fixed deposit or treasury bills or foreign currency to improve liquidity.

Secondly, bootstrap financing helps you to increase inventory at no direct cost to you, the business person. In this case, you don’t lose much because your business will be worth more because JUNE 2016

PERSPECTIVE

Communicate with the customer in mind

BY YVONNE OHUI MACCARTHY

As a general rule, we need to communicate with our clients and customers the way they want to be communicated with, and in a manner that benefits them. Personal interactions among families and work colleagues are getting tougher by the day. This is due to the excessive reliance on communicating through texts, emails and other non-personal ways of communicating.

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he constant use of these other ways of communicating has definitely played a role in the reduced quality of our face-to-face interactions and this greatly includes the way we interact with our customers. According to a Stanford University research, 25 years ago, 80 per cent of people were situationally shy. Now fast forward to recent times and you would realise that there has been an increase in that number. The latest research shows that 92 per cent of people are situationally shy. We are getting shyer because we are not practising the face-to-face interactions both with our relationships and with our clients. Because of this trend, it has become more and more important to look at the other ways in which we communicate to our clients even without meaning to or realising that we are saying something to them.

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Advertising campaigns and promotions are ways of promoting your business.

Often times we pay less attention to certain things that we really must pay more attention to. They range from the littlest things we do from day to day to some activities that we invest a lot of time and money in. Let’s look at your brand. Are you using your logo, your colours, your fonts, your ‘business personality’ – in other words, are you using your brand to communicate effectively? And what exactly does your brand choices communicate to your customers? Do you maintain your business standards? Does your staff adopt your standards and communicate them well to customer? Have you really decided how you want people to view your business? Being honest, known for great for bargains and high-end innovative products?

GHANA BUSINESS & FINANCE

Driving branded car This is where driving that branded car works either to your advantage or against you. Driving within the speed limits in your branded car communicates that your business respects the law and the other users on the road. And the same goes for leaving a branded car parked on a small road at the wrong spot while you pop into a shop for a loaf of bread. Dropping litter while wearing your logo shirt or uniform will attract the wrong sort of attention for your brand on the spot. The behaviour of employees communicates a lot to your customers and prospective customers outside working hours and even away from your primary business location.

Be careful what you are communicating about your business whenever the public may see, hear or even smell you!

JUNE 2016