GB&F September 2013 by Ghana Business & Finance

SEPTEMBER 2013 / ISSUE 029 GH¢10.00

Election Petition verdict out

MELCOM REDEFINES CSR

- Let’s now count the economic cost Special Supplementary on Automobile

USA....................... $5.00 UK......................... £3.00 EUROPE................. €4.00 AUSTRALIA.......... A$7.50

CFA ZONE....... CFA 2,500 NIGERIA.................. N500 SOUTH AFRICA......... R25 SOUTHERN AFRICA... R25

THE FIRST BUSINESS READ IN GHANA

- as it gives back generously to society

overly suspicious of players in that sector to the current dispensation where the private sector is now a partner of choice for development. Martin C. Lutherking takes a look at Ghana’s model of the PublicPrivate-Partnership as a model for development.

GB&F General Manager Andrew Padi Jnr andrewpadi@gmail.com Editor Eric Kwame Amesimeku eric_kwame@yahoo.ca

18... Economic Cost of the Election Petition

Contributors A. Kapini Atafori Martin Luther King Head - Business Development Josiah Spio-Garbrah kojosegu@yahoo.co.uk Deputy Manager, Marketing Michael Kouassigan mkouassigan@ghanabizmedia.com Editorial Committee Prof. Paul N. Buatsi Prof. Kwame Addo Ms. Johanna Awotwi Mr. Gaddy Laryea Nana Robert Mensah Mr. Frederick Alipui Ms. Dede-Esi Amanor-Wilks Nana Spio-Garbrah Art Director, Design Benjamin Tetteh Design & Production Daniel Sackey Yobo Office Location Ghana Business & Finance African Business Media House No. 7 Lamb Street (off Farrar Avenue) Adabraka, Accra Ghana Mailing Address P.O. Box 0772, Osu, Accra, Ghana Tel: +233 302 240 786 Fax: +233 302 240 783 editor@ghanabizmedia.com adverts@ghanabizmedia.com subscriptions@ghanabizmedia.com info@ghanabizmedia.com Credits GNA myjoyonline Daily Graphic Blommberg Forbes citifmonline ghanabusinessnews.com

SEPTEMBER 2013 / ISSUE 029 Front Cover: Mr Bhagwan Khubchandani Chairman, Melcom

Contents 5...

Editor’s Suite

6...

News in Brief

Catch all the news updates from the shores of Ghana

12... Cover (Melcom)

Most corporate entities are only bent on making profits and expanding their businesses without giving real thought to the needs of those it serves. But one corporate body that has taken the needs of its customers at heart in Ghana is the Melcom Group.The Group through its charity arm,the Melcom Care Foundation is giving real meaning to Corporate Social Responsibility. Find out how.

15... Economy Public Private Partnership (PPP)

The price of Democracy could seem worthless until when the state degenerates into chaos and anarchy. That is why Ghana’s choice of the court system to settle electoral disputes has been welcomed by all.But at what cost to the nation,in terms of its economy,can the recent Election Petition filed by the Opposition New Patriotic Party be measured? Eric Kwame Amesimeku makes an attempt to assess the cost of the recent Election Petition.

21... Special Feature on Ghana’s Automobile Industry

With an expanding economy and an auto industry that keeps on generating interest from investors, GB&F throws a spotlight on the Auto industry in Ghana. contents continued overleaf

Economy: Public Private Partnership. Page 15

There is a paradigm shift in the way Governments perceive the private sector now - from being

Subscribe 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.

SEPTEMBER 2013

Automobile: Special feature on Automobile. Page 21

GHANA BUSINESS & FINANCE

Letters to the Editor send your letters to the editor at kwame.eric@gmail.com

linkedin.com/GhanaBusiness&Finance facebook.com/GBandF www.twitter.com/ghanabusfinance

33... Africa Briefs

This column provides you with all the important news updates from across the continent of Africa. News from Mali,where the successful organisation of fresh elections has led pundits re-writing their notes about the stability of that state,to news of Wal-Mart Africa spreading its tentacles into the Kenyan market, are all covered here.

36... Aviation

Get updates from the world of aviation

38... Excerpts from the EIU report on Ghana

The discovery of oil and other mineral resources, for many countries, has been a curse rather than a blessing.In these excerpts from an EIU report on Ghnaaâ&#x20AC;&#x2122;s Natural Resources,an indepth look is taken at how Ghana is managing its mineral resources and whether the country could make the most out of its oil fields as compared to other African countries whose resources have been used to fuel wars and civil strifes.

40... Events & Conferences

The events plate serves you with all the scheduled events in the next two months from across the globe. A very important page for the businessman and woman seeking to build on his/her network of acquaintances and explore the world of business.

44... Agriculture

Though Ghana has attained a middle income status, and in a way turning into an economy driven more by the services sector and industry,agriculture continues to be the mainstay of over 70 per cent of the rural economy. Kapini A. Atafori takes a peep into Ghanaâ&#x20AC;&#x2122;s agriculture sector and makes a strong case for modernisation in the sector.

46... Banking and Finance

Banks entering the Ghanaian banking scene now need a minimum operating capital of GHC 120 million.Is this a move in the right direction for the banking industry in Ghana? Martin C. Lutherking sets out for some answers.

48... World Outlook

There is turbulence in the emerging markets as Gold makes a somewhat strong attempt at reversing its downward ride in recent months.Meanwhile food prices, according to the World Bank continues to drop,helping poor countries in their ability to feed their citizens.

50... SME

GB&F continues to support the growth of the SME sector in Ghana. In this edition,the resilience of a certain woman who has been playing on the

turf of men,catches the attention of the magazine. Find out who and what the woman has been doing.

52... Feature

An interesting piece on the culture of Consumerism that has gradually become a way of life of most people in Africa.But could Africans be blamed in a world where materialism has become the order of the day? The article makes such a nice read,enjoy your read.

54... Mergers & Acquisitions

Commercial banks in the country could soon be merging- find out why? Meanwhile the Ghanaian Government is also looking for strategic partners to take over the operations of one of its assets which could hold so much profit potentials for any investor.You might want to know which asset it is. Read on.

56... Markets

Here, we feed you with all the numbers you need to have from stock trading on the Ghanaian bourse.

57... Job Openings

The Job board features top-ofthe range job openings on the Ghanaian job market. The best place for all those looking for a change in their job life.

41... Pensions

We continue with the second part in a series of articles looking at the Pensions Reform project embarked on by the Government of Ghana.This is a piece from an insider, Daniel Aidoo Mensah,a former Acting CEO of the Pensions Regulatory Authority,and you would not want to miss.

Modernizing Agriculture: Page 44

Management: Culture of Consumerism. Page 52

GHANA BUSINESS & FINANCE

SEPTEMBER 2013

EDITOR’S SUITE

“Sometimes the thing that brings us together also pulls us apart. Sort of like a zipper.” - Jarod Kintz

o much for Democracy, for all its drags and pulls. Democracy, might not be the most perfect form of governance for us, but it is the ideal. Because if for nothing at all, it affords everyone the chance to play his part and be part of the decision-making process. It is Democracy that brings us together in times of grief, and it is this same Democracy that threatens to break us apart in times of dispute. Over the course of the last eight months, the nation has witnessed one of the biggest tests to its democratic experiment to the point where the very fabric of the nation’s existence seemed to be bursting at the seams .Indeed, the political Cassandras and pessimists thought Ghana would break up, but once again, Ghanaians can beat their chest and say that “We have done it again!” We have proven to the world that when disputes arise on our journey to a perfect state, we can depend on our formulated Constitution and resort to the institutions established by this Constitution. The State, next to our individual interests, must survive!

Eric Kwame Amesimeku Editor Tel: 0244 985 098 Email: eric_kwame@yahoo.ca

SEPTEMBER 2013

GHANA BUSINESS & FINANCE

NEWS IN BRIEF

Ghana begins to build $11m fish processing plant at Elmina President John Dramani Mahama, has cut the sod for the construction of a $11 million fish processing plant at Elmina in the Komenda-Edina-EguafoAbrem (KEEA) district of the Central Region. The project, to be executed by the Ministry of Food and Agriculture, in collaboration with Expotec International, an Indian Company, would take 18 months to complete. It will have facilities such as a fish waste processing section, offices, canteen, cold stores and a packaging section. The 100 metric-tonne capacity plant would be used to process fish to add value to it for export, whilst the waste from the fish would also be processed into fish-feed for the poultry industry. The ceremony coincided with a special programme organised by the fishing communities along the country’s coastal stretch to observe the one year anniversary of the late President, Professor John Evans Atta Mills. Representatives of the fishermen from the Volta, Greater

Accra, Western and Central Regions attended the programme. President Mahama said the project formed part of the numerous projects the late President pledged to carry out to boost the fishing industry and gave the assurance that he would endeavour to bring all of them to fruition. He promised to break grounds for the construction of a fishing harbour at Elmina and Jamestown in Accra before the end of this year. He said plans were also far-advanced to construct modern fish landing bays attached with cold stores and parking lounges for canoe and boats at all the beaches. Touching on the issue of pair trawling, the President announced that an interim measure had been put in place where fast patrol marine boats on the country’s high seas would check illegal fishing activities. The Ministry of Fisheries would soon be set up with an enforcement Unit, which would comprise the Navy, Air force and Marine Police to arrest and prosecute trawlers, which fish closer than the expected 30 nautical miles. This is because, the demarcated zone for artisanal fishing must be respected, President Mahama indicated, and warned that it was wrong for pair trawlers to fish in such zones. The President promised the fishermen that illegal fishing activities will soon end on the country’s marine waters with the coming into force of the Unit. Mr Nayon Bilijo Minister of Food and Agriculture in charge of Fisheries, re-

Tullow taps Modec for TEN FPSO offshore Ghana Tullow Oil and its partners in the TEN development offshore Ghana have selected Modec to provide the project’s FPSO, a crude oil tanker conversion scheduled for delivery in 2016.

Holdings (3.825%), and the Ghana National Petroleum Corporation (15%).

Modec has not disclosed the contract’s value. The FPSO will draw production from the Tweneboa, Enyenra, and Ntomme fields in the Deepwater Tano area offshore Ghana. Water depths at the site average 1,500 m (4,921 ft). Tullow operates the development with 47.175% interest.

SOFEC will design and provide the mooring system. MODEC will convert the VLCC Centennial J into an FPSO capable of handling expected plateau production of 80,000 bb/d of oil, 170 MMcf/d of gas, and will have storage for 1.7 MMbbl of total fluids. The vessel is designed for a field life of up to 20 years.

Partners are Kosmos Energy (17%), Anadarko Petroleum (17%), Petro SA subsidiary Sabre Oil & Gas

MODEC is responsible for the engineering, procurement, construction, mobilization and operation of the FPSO, including topsides processing equipment as well as hull and marine systems.

Modec is currently operating the Kwame Nkrumah MV21 FPSO for Tullow at the Jubilee field off

echoed plans to provide modern fish landing bays with the requisite facilities for the various beaches, to enhance fish handling and avoid post-harvest losses in the country. The chief fisherman of Moree, Nana kwegya, on behalf of the all fishing communities along the coast expressed gratitude to the President for his concern for the fishing industry and appealed to him as a matter of urgency, to address the problem of pair trawling in the country. He said the activities of the pair trawlers were affecting their business seriously, with the majority of them being out of business, in addition to their huge debts, through loans they took from the banks.

ACEP questions propriety of GNPC in AGM Agreement Africa Centre for Energy Policy (ACEP), energy and research think-tank has questioned the purported legitimacy and propriety of the Ghana National Petroleum Corporation (GNPC) agreement with the AGM Petroleum Ghana Limited for its genuineness. The ACEP is worried that the choice of the Joint Operating Partners and the Petroleum Agreements GNPC negotiated on behalf of the country with AGM Petroleum Ghana “stinks badly and must not be allowed to pass without serious Parliamentary scrutiny. This was contained in a release signed by Mr Mohammed Adam Amin, Executive Director of ACEP. It alleges that the AGM Petroleum Ghana Limited is an unknown Company in the global oil and gas industry and especially with no upstream experience. “Our investigations shows that AGM Petroleum Ghana firm has no evidential record of raising as much capital as may be required for exploring and developing of Ghana’s deposit oil block (South Deep Tano block of about 3,000 metres depth) and again ill-experienced in deepwater exploration,” it said. The statement said ACEP is worried that the technical partners and financing plan behind this deal considering that major partners in the joint venture, the GNPC, is unable to raise such a colossal capital requirement for this operation as confirmed by GNPC itself, citing its lack of security and control over its carried and participating interests in the Jubilee project.

GHANA BUSINESS & FINANCE

SEPTEMBER 2013

Whitewall Properties is a real estate development company that provides high quality apartments and townhouses for the high-end Ghanaian market. We develop world class real estate in prime locations around Accra targeted at the buy-to-rent buyer at competitive prices. Our target market comprises private business people, professionals working in selected high profile industries like petroleum, oil exploration, insurance, telecommunication, financial services, international footballers, and Ghanaians living abroad. Maple Court is our current development. It is an 18-unit residential facility centrally located in the heart of East Legon, Accra. The project construction, which began in May 2013, is projected to be completed in April 2014. Maple Court is comprised of 12 apartments and 6 townhouses with top line interior finishing and an exterior of lush greenery. The offering includes 2,664 square meters of residential space, or an average of 153 square meters per unit. Similar to all Whitewall developments, Maple Court is equipped with great amenities and services which include a playground, gym, swimming pool, free parking, 24/7 security, and backup utilities. The Propertyâ&#x20AC;&#x2122;s location provides its residents convenient access to a large concentration of offices, retail stores, entertainment, fine dining, and healthcare complexes. East Legon, 13km northeast of the city center, is noted for its sophisticated modern low-rise apartment blocks and detached houses. The area is sparsely populated and home to mainly high-income individuals and foreigners.

ADVERTORIAL

The Whitewall Advantage

NEWS IN BRIEF

It is also worried the country could be shortchanged by the potential abuse of “Ghanaian Company” principle to justify a patronage system in the oil and gas industry - as a company becomes Ghanaian, if it is incorporated in Ghana and with a minimum of 51 percent ownership is held as such. The statement therefore challenges the qualification of AGM Petroleum Ghana as a Ghanaian company as checks have revealed that AGM Petroleum Ghana is wholly owned by AGM Gibraltar and is also identified as a daughter company of Minexco Petroleum, all foreign entities. It fingered government for its impatience in rushing to negotiate this agreement in six months under circumstances that could give rise to abuse of processes sidestepping the application of open and competitive bidding process as prescribed in the new Petroleum (Exploration and Production) Bill to be passed soon. The statement called on Parliament to thoroughly examine the Petroleum

agreement when it appears for business in the House urging them to check the beneficial owners of AGM Petroleum Ghana Limited and the financial and technical capacities of the Companies in this agreement. It further suggested scrutiny of the role of GNPC in the negotiation, the role of the Petroleum Commission in processing the agreement and circumstances leading to approval by Cabinet. “ACEP entreats Parliament to publish the agreement approved by Cabinet, when it is laid before it and invite public memoranda to help scrutinise the agreement and ensure the country’s interest is protected and the industry not subjected to costly experimentation.” It called on government to place the Petroleum Bill before Parliament for expeditious considerations and passage. The statement however commended GNPC for outdooring its exploration and production subsidiary, EXPLORCO in the Petroleum agreement over the South Deepwater Tano Block negotiated between GNPC, its subsidiary and the AGM Petroleum Ghana Limited.

a profit-making position, although, marginal. “In 2010, the ECG made a marginal profit of about USD 4 million partly as a result of the upward tariff adjustment. In 2011, and 2012, the Company made losses of USD 16 million and USD 26 million respectively,” it added.

Proposed tariffs increase by ECG too high - TUC The Trades Union Congress (TUC) has said the proposed tariff increase of 166 per cent by the Electricity Company of Ghana (ECG) was too high and unacceptable given the fact that Ghanaians were already over-stretched. The Union said failure to allow the automatic adjustment mechanism to work as agreed among the stakeholders in 2010 was the prime reason why the ECG was asking for a high increase. A statement released by the TUC and signed by Mr Kofi Asamoah, General Secretary of TUC, said any attempt to further over-burden Ghanaians could have undesirable social and political implications. It said the ECG proposed increase would allow the company to move from a loss making position to

The statement said failure to automatically adjust tariffs could be part of the reasons for the losses and that given the economic situation Ghanaians were facing, the TUC would recommend that ECG rather aimed at cutting losses or at best, breaking even. It said on June 12, 2013, the Steering Committee of the TUC met all the players organised by the Public Utilities Regulatory Commission (PURC) to justify their proposals for increases in utility tariffs. The statement said at the meeting, the Volta River Authority asked the PURC to increase its tariff by 137.5 per cent, the GRIDCO asked for an upward adjustment of 39.36 per cent, the ECG asked for 166 per cent increase in electricity tariff across board and the Ghana Water asked for an increase of 99.39 per cent. It said experience over the past few years had shown that just raising tariffs unaccompanied by other measures that

New fund in the offing for agricultural financing in Ghana The Venture Capital Trust Fund (VCTF) has disclosed the setting up of an Agricultural Fund to be operational by end of this year. Chief Executive Officer, Daniel Duku, told the media the facility is tailored

addressed the systemic challenges had failed to improve the situation. It further said low tariffs had been cited by the utility companies and the managers of the economy as the most important constraint that inhibited quality service delivery. The TUC believes that many Ghanaians are not enthused about the proposed upward tariff adjustments when they are unable to provide quality service to its customers. It said the ECG continued to report systems losses in excess of 20 per cent and that the World Bank Report in the last quarter of 2012, stated that the systems loss was about 27 per cent. The report said 10 per cent reduction in such losses could earn the ECG some USD 85 million, more than enough to wipe out the losses incurred in 2011 and 2012. “About 51 per cent of ECG’s customers are lifeline consumers and domestic consumers account for 84 per cent of the customers of Ghana Water, therefore, with the level of incomes prevailing in the country, it will be highly unrealistic to think that realistic utility pricing will occur anytime soon,” the statement said.

GHANA BUSINESS & FINANCE

SEPTEMBER 2013

“post harvest investment in agricultural products is a viable venture” Smallholder farmers and other actors in the sector are constrained throughout the production, marketing and distribution stages of their operations. There have been calls for government to incorporate farmers’ access to financial service into national policies. Targeted financing, especially with the reformed Export Development and Agricultural Investment Fund (EDAIF) is a step to

propel the growth of Ghana’s agriculture and food processing industry. But such interventions have yet to rake in the desired impact. Dr. Robert Kwabena Asubuah, a Director at the Grains and Legumes Development Board of the Ministry of Food and Agriculture, said there are opportunities for the private sector in agricultural financing. “Everybody always talks about government investing but right now the private sector has a big role to play to take up some of the agricultural investments that are now available for them to make all the money they want”, he stated. He cited post harvest investment in agricultural products is a viable venture. The VCTF has a mandate to provide low-cost long term financing to small and medium scale enterprises, including agriculture. CEO, Daniel Duku,

USD 45m to create Pan-African University for Science, Technology and Innovation knowledge. The PAU will establish an academic network of already existing post-graduate and research institutions intended to serve all African countries.

The African Development Bank´s (AfDB) Board of Executive Directors has approved an African Development Fund (ADF) grant of USD 45 million to support the creation of a Pan-African University (PAU). The university, consisting of five Pan-African Institutes, will focus mainly on science, technology and innovation. The new university would be a groundbreaking step in strengthening higher education and building human capital in Africa. Africa has been slow to develop its science and technology sectors and commercialize its innovations. Currently the best African university ranks just 113th globally. Of the 400 top universities worldwide, only four are in Africa, all of which are in the Republic of South Africa. Also, while Africa accounts for 13.4 per cent of the world’s population, it produces only 1.1 per cent of world’s scientific

Consisting of five thematic institutes based in East, West, Central, North and Southern Africa, the PAU will deliver programs in: Basic sciences, Technology and Innovation (East Africa); Earth and Life Sciences including Health and Agriculture (West Africa); Governance, Humanities and Social Sciences (Central Africa); Water and Energy Sciences including Climate Change (North Africa); Space Sciences (Southern Africa). “Thousands of students all over Africa will benefit from this project. This is truly an amazing regional effort to help African universities achieve worldclass status. It will increase the pool of African scientists and researchers not only to serve the needs of the continent but to help youth become competitive in international labour markets,” said Agnes Soucat, Director of the Human Development Department, AfDB. The project will contribute to the skills needed by African countries to add value to their natural resources and

SEPTEMBER 2013

said about 70 applications have been approved and supported. He however said applications for financing have been skewed towards investors in the Greater Accra Region. He expects investors in Ashanti region to take advantage of the VCTF’s office set up in Kumasi to explore opportunities, especially under the proposed agricultural fund. Ashanti regional chair of the Association of Ghana Industries, Robert Nketia, is cautiously optimistic of the Fund’s renewed drive to support agriculture. “Most of the already existing investments went to other sectors, neglecting the agricultural and agro-processing. But they’ve now realized their mistake and now focusing on agriculture which will have an impact in creating employment and making it possible that the rural areas are also opened up”, he opined.

enhance competitiveness and youth employment contributing to the AfDB’s overall objectives of inclusive and green growth. The PAU is also major step towards establishing the African Higher Education and Research Space by contributing to efficient regional higher education governance system; improved quality of higher education at the regional level creating strong links with the labour market; equitable access to quality higher education in science, technology and engineering fields; and increased number of institutions achieving worldclass status. This project will also help set up the governance structure of the PAU at central and country levels as well as academic and research capacity. The first three PAU thematic institutes will be based in Kenya, Nigeria and Cameroon - PAU Institute for Basic Sciences, Technology and Innovation (Kenya, PAU Institute for Life and Earth Sciences (Nigeria), PAU Institute for Governance, Humanities and Social Sciences (Cameroon). This important operation is a response to a request from the African Union for technical assistance and financial resources for the design and operation of a network of hubs of excellence in higher education to help meet the need for education, training and research in five key areas of African development.

GHANA BUSINESS & FINANCE

NEWS IN BRIEF

to finance agriculture related projects, from production to supply-chain and value addition.Sustainable financing of agriculture investments constitutes a critical factor in enhancing operations of Ghanaian farmers.

NEWS IN BRIEF

DaMina Advisors launches an electronic platform to help distressed mining firms in Africa DaMina Advisors, an Africa-focused independent frontier markets political and regulatory risk research and consulting firm providing highlytailored, regulatory and political risk advisory and consulting services to a range of multinationals and investment firms with investments in Africa has launched the first ever global offshore electronic platform to aid Mergers and Acquisition (M&A) deals for impaired African mining assets. With the total value of global mining sector write-downs likely to top $60bn by the end of 2013, and traditional sources of capital for the global mining sector dried up and hesitant to reinvest, DaMina Advisors initiative to help mining companies gain new lease of financial life is a timely intervention. The vetted site, africaminingasset.com, will help distressed miners advertise and offload their impaired African mining assets to interested nontraditional mining sector investors globally. africaminingasset.com clients can draw upon DaMina Advisors respected senior global advisory team which includes several former African mining ministers, a former prime minister, several former senior corporate executives and many former senior cabinet officials. DaMina Advisors will assist africamininigasset. com clients to gain the necessary pre-and post merger and acquisition clearances

regulatory approvals in Africa. Using DaMina’s unique risk methodologies, proprietary Africa risk research analytics, and drawing upon a combined senior government experience of over 360 years, DaMina will provide all africaminingasset.com clients with high level due diligence and regulatory risk counsel during all stages of the M&A process in Africa. While the scope and scale of the multibillion dollar impaired African mining assets will vary by country, company, commodity and regulatory complexity, the presence of significant political and regulatory risk factors in all the major African mining nations such as Guinea, DR Congo, Zambia, Zimbabwe, Mozambique, South Africa, Ghana, Burkina Faso, Egypt, Libya, Sudan, Mali etc. presents new obstacles for potential foreign buyers of impaired assets. Without proper high level political and regulatory risk counsel during the entire M&A process, many of the impaired African assets will continue to remain unsold. africaminingasset.com in addition to providing the vetted secure offshore electronic platform to aid the M&A process will conduct high-level due diligence for clients; help gain the necessary domestic regulatory and political approval to restructure the impaired African mining assets; and advertise listed impaired African mining assets to a proprietary global database of over 6,000 global investors in Africa among others.

Innovative way of learning ‘Twi’ developed An innovative educational DVD ‘Listen Speak & Learn’ that uses oral and visual techniques to teach children and adults the basics of speaking and understanding the Ghanaian language of ‘Twi’ has been developed. It was created by Michael Richardson, after he couldn’t find a comprehensive educational tool to teach his two young children their mother tongue. “When looking for resources to aid my wife and I to teach our children about our cultural heritage and learning our native tongue, I struggled finding readily available resources that would capture the children’s imaginations whilst engaging them, so decided to do something about it. My new journey started from that simple desire and need”. The DVD is an excellent foundation block and gateway to this vibrant language, which is spoken by almost 60% of Ghanaians living at home and abroad. Listen Speak & Learn not only educates, it is also an entertaining way to learn Twi that’s easy to absorb. Its videos are broken down into sections, starting with simple sentences, and use familiarisation techniques to build up your vocabulary. In today’s society, where so few Ghanaians in the diaspora speak their native language, teaching children Twi has slowly become an afterthought. Listen Speak & Learn aims to change all that by providing an exciting, intuitive and relaxed way for the entire family to learn. The DVD successfully captures children’s attention by using fun things like the popular nursery rhyme ‘Head, shoulders, knees and toes’ to help them pick up new words andenjoy learning.

Hellofood Partners iPay Hellofood, an electronic platform that allows customers to order food from restaurants and caterers in their city with a presence in six African countries and over 25 other countries across the globe has announced a partnership with iPay, an electronic payment platform to enable customers make payments using their mobile money wallet or bank accounts online. This comes just months after becoming the number 1 food app in Ghana, and after announcing its cooperation with Tigo and Tigo Cash. With the introduction of iPay, Hellofood Customers can now make payments using their mobile money wallet or bank accounts on Hellofood.com.gh, reaffirming Hellofood’s brand promise of making food ordering as easy as pie. With access to iPay’s payment platform, ordering food online is now easier than ever before. iPay ensures easy, safe, speedy and reliable payment on your mobile phone and online. Hellofood’s online meal ordering and delivery platform is the market leader, and relies on outstanding partners to maintain a fantastic service and thus a dependable and convenient payment method is therefore crucial. The partnership between these two important Ghanaian companies will enable all Ghanaians to simply pay for their Hello food order by transferring money from their mobile device to Hellofood’s Customer Service numbers in 2 easy steps namely: depositing cash at any cash agent’s office/ bank nearby; and accessing your mobile money option on your handset and transferring money using credentials: Nickname: iPay & Reference ID: 00000000(8 Zero digits). Joe Falter, Hellofood Africa CEO in a chat with the media says “We are incredibly excited about this opportunity to make life even easier for our thousands of loyal Hellofoodies in Accra. iPay have developed a great name in reliability and user experience, so our goals are 100% aligned. Together we can better serve our customers, who have come to expect a hitech and convenient experience on www.hellofood.com. gh.” Currently working with over 600 restaurants, Hellofood is the first place that customers think of when they are hungry.

GHANA BUSINESS & FINANCE

SEPTEMBER 2013

These companies are rising to the Challenge of improving the productivity & quality of life of Ghana’s human resources:

Accraexpat • Accu-computers • Ashesi University • Axis Human Capital • Barry Callebaut • Busyinternet • DreamOval • Denys • East Airport Int’l School • Eni • German Swiss School • Ghana Home Loans • GLICO • Global Media Alliance • Golden Royal Construction Works • Labadi Beach Hotel • Lincoln School • Meltwater Entrepreneurial School • Metropolitan Insurance • Mitsui-Osk Lines (MOL Shipping) • MS Business Enterprise • Newmont Ghana Gold • Teshie North Methodist Keepfit Club • PriceWaterhouseCoopers • Vitamilk

Join them in AIMing your employees and members for fun & fitness in the 7th Annual Accra International Marathon (AIM), featuring 5K, 10K, 21K, 42K distances and the Challenge for Fun™ Relay. Afterwards, enjoy free massages, food, drinks, music and entertainment at the fabulous 5-star Labadi Beach Hotel. Free race souvenirs to registered participants: customized event shirt; finisher’s medal, filled goody bags, raffle prizes and special promotions from our sponsors. Prizes include: Half Marathon prize purse of $3,000 • Keepfit Club & Schools Relay Winners—GHS1,000 per team • Corporate Relay Winners— Free nights at Labadi Beach Hotel + AXIS HCL services • Trophies • Many more prizes! Vitamilk Special: Cash, Year’s supply of Vitamilk and trophies for three top 10K finishers, age 50+

Visit www.aimghana.com or call 026 243 8348 for more details.

Sponsorship opportunities still available.

White text above F4l = Produced by

Mr Bhagwan Khubchandani (Melcom chairman)

COVER STORY

Business is all about touching lives The Generous Side of Melcom Revealedâ&#x20AC;Ś 12

GHANA BUSINESS & FINANCE

SEPTEMBER 2013

elcom, since its establishment in 1991, when the primary shop of the company was opened in Accra Central, has been at the forefront of catering for the needs of not just its customers, but the larger public as well. The Melcom Group which consists of Ghana’s largest retail chain of stores, Melcom Limited, Century Industries Limited, Crownstar Electronic Industries Limited and Melcom Travel & Tours Limited in furtherance of its avowed objective of ensuring that society in general feels the ‘Melcom Touch’ has established the Melcom Care Foundation, the Charity division, and it is this arm of the Group that oversees all the CSR activities of the Group. MELCOM COMMISERATES WITH FIRE VICTIMS In one of its numerous CSR activities recently, the Foundation supported victims of the recent market fire disasters by making a huge donation to the Accra Metropolitan Assembly (A.M.A). Making the donation at the A.M.A offices in Accra, the Director of Communications of the Melcom Group, Mr. Godwin Avenorgbo expressed worry at the spate and currency of fires in markets around the country and called on all stakeholders to

COVER STORY

Corporate organisations the world over have now embraced Corporate Social Responsibility (CSR) as an important tool to furthering the social good of consumers, the environment, stakeholders, and all other members of the public sphere. Indeed CSR has become the most efficient communication tool for the corporate firm as it seeks to paint an image of an entity whose sole aim is not necessarily in amassing wealth and making profits but also catering to the needs of those affected by its activities. It is a way of giving back to society.

rise to the occasion, identify whatever problem there was and address it quickly to save life and property. He said “The loss of investment to the traders is quite agonizing and painfullydestructive whilst the state also loses infrastructure that is basic to our economic development.” The donation, which he described as “Seed money of Twenty thousand Ghana Cedis,” was meant to help the A.M.A do two things: assist in alleviating the pain of loss of investment suffered by the traders and help re-build the markets for economic activities to resume. Receiving the donation, the Metropolitan Chief Executive of Accra, Dr. Alfred Oko Vanderpuije expressed the Assembly’s appreciation to Melcom Care Foundation and pledged to put the money to good use. Present at the ceremony were some Assembly members and A.M.A Officials. Others were Mr. Atul Dave, Administrative Manager and Mr. Stephen Tetteh-Hago, Communications Manager all of Melcom Group of Companies. MELCOM ORGANIZES NATIONWIDE BLOOD DONATION EXERCISE The Foundation has also identified a pressing need in society and that is in the area of health. A worthy course by all standards, the Foundation has, as part of supporting the health delivery system of the country, been organizing blood donation exercises around the country. On 5th June, 2013 the Foundation successfully organized a nationwide blood donation campaign to help fill the blood banks of the nation’s hospitals. Twelve of the Melcom shops across the country were selected for the exercise.

AMA Chief Executive receiving a cheque from Melcom Group Director of Communications

These were the Accra Central Shop, Teshie, Kaneshie Melcom Plus, Tamale, Tema, Koforidua, Bolga, Sunyani, Takoradi, Cape Coast, Hohoe and Ho.In spite of the heavy down pour in some parts of the country which delayed the commencement of the exercise particularly in Bolga the exercise registered some gains for the benefit of the Blood Bank.

SEPTEMBER 2013

GHANA BUSINESS & FINANCE

COVER STORY

In his remarks, the Chief, Mohammed Alhassan Dawuni expressed his profound appreciation to the Chairman and the entire staff of the company and commended the Communications Director for honoring his word. He also said that he is acting on the late President’s instructions by giving out lands for business purposes and not for personal use. He therefore assured Melcom that he will consider the Chairman’s request for allocation of land to construct a Melcom Plus. GULKPE NAA CHIEF PALACE

Volunteers being bled at a Melcom Shop for the Blood Bank

The first three shops that chalked the highest patronage of donors were the Koforidua branch which crowned the list with 73 donors, followed by the Sunyani branch ending the day with 67 donors, and then Tamale followed with 60 donors. Melcom, at the end of the exercise, reciprocated the selfless attitude exhibited by the donors by presenting them with well-packaged hampers. MELCOM HONORS ROYALS AND MUSLIMS IN TAMALE In a bid to touch base with customers in their areas of operation, a management team led by the Director of Communications Mr. Godwin Avenorgbo extended a hand of friendship and appreciation to some key stakeholders in the Northern Region.

The entourage also paid a courtesy call to the Palace of the Gulkpe Naa. Here, the linguist and elders welcomed the Director of Communications, Mr. Godwin Avenorgbo and the Communications Manager Mr. Stephen Tetteh-Hago on behalf of the Paramount Chief, who was out of town. Mr. Godwin Avenorgbo, on behalf of the entourage made a donation to the palace. In his remarks he commended the people in the community for praying for the peace and unity of Ghana. The Elders, on their part, expressed their profound gratitude to Melcom for their kind gesture. REGIONAL POLICE HEADQUARTERS

The first point of call was the Palace of the Dakpema who is the Development Chief of Tamale. Here the Director of Communications presented to the Chief a refrigerator and hamper. He commended the Chief for his leadership in the development of Tamale, adding that his visit to the Palace is to inform the Dakpema that the Chairman of the Melcom Group of Companies Mr. Bhagwan Ramchand Khubchandani has confirmed his willingness to invest in the Kaladan Redevelopment Project in Tamale.

Direcotor of Communications, Godwin Avenorgbo with DCOP Mr. Ken Yeboah

At the Northern Regional Police Headquarters the Director of Communications told the Commander that “paying courtesy calls on the Chiefs of the land without considering the Regional Police Headquarters would not have made the visit a complete one.” He added that “the security of the region rests in the hands of the police and that their work is indeed commendable in the maintenance of peace and order in the region.” The Deputy Commissioner of Police (DCOP), Mr. Ken Yeboah in his remarks said that the presence of Melcom in the region was serving a very good purpose by bringing services closer to the people of the North.

Chief Imam Tamale Central Mosque receiving donation from Melcom Director of Communications

Melcom currently operates an extensive retail market network with a network of twenty-six retail outlets spread all over Ghana.

GHANA BUSINESS & FINANCE

SEPTEMBER 2013

ECONOMY

The PublicPrivate Partnership challenge Torn between ever increasing demands for social infrastructure and a resource base still struggling to get ahead, Ghana is increasingly looking to the private sector through Public-Private Partnerships (PPP, or P3) to bridge the shortfall in funding for vital social infrastructure. public–private partnership (PPP) is a government service or private business venture which is funded and operated through a partnership of government and one or more private sector companies. PPP involves a contract between a public sector authority and a private party, in which the private party provides a public service or project and assumes substantial financial, technical and operational risk in the project. In some types of PPP, the cost of using the service is borne exclusively by the users of the service and not by the taxpayer. In other types (notably the private finance initiative), capital investment is made by the private sector on the basis of a contract with government to provide agreed services and the cost of providing the service is borne wholly or in part by the government. Government contributions to a PPP may also be in kind (notably the transfer of existing assets). In projects that are aimed at creating public goods like in the infrastructure sector, the government may provide a capital subsidy in the form of a one-time grant, so as to make it more attractive to the private investors. In some other cases, the government may support the project by providing revenue subsidies, including tax breaks or by removing guaranteed annual revenues for a fixed time period.

or, what has come to be referred to as ‘briberization’ in many parts of the world. The Ghana Youth Employment and Entrepreneurship Agency (GYEEDA), formerly the Ghana Youth Employment Programme (NYEP) is one of such programs. Established in 2006, GYEEDA’s mandate is to help curtail the rising youth unemployment in the country. Part of the program which started with an initial intake of 40,000 beneficiaries in 2006 but has since increased to over 400,000, has evolved around the training modules and empowerment of Youth in Community Health Extension Workers, Youth in Security Services, Youth in Community Education Teaching Assistants, Youth in Paid Interns, Waste and Sanitation and Trades and Vocation among others. The GYEEDA modules which are managed by Zoomlion under the auspices of the Ministry of Youth and Sports has

Presently, PPP arrangements have been replicated in virtually all sectors of the country’s economy, from youth employment to sanitation, and from road construction to provision of housing for the citizenry. Analysts, however, warn that PPPs offer far greater latitude for manipulation by foreign or local firms or government officials that are hard for the public and anti-corruption systems to spot;

SEPTEMBER 2013

GHANA BUSINESS & FINANCE

ECONOMY

special arrangements to help the beneficiaries to get permanent engagements by their institutions and private organizations such as clinics, private hospitals, private schools and private security agencies. But today, the GYEEDA is deeply mired in various allegations of financial malpractices.

a PPP project. The brochure launching Hope City says this US$10 billion project is being done ‘in collaboration with the Government of Ghana, as part of the National Development Policy Framework’. “The Danquah Institute is calling on the government to make the content of the partnership public, to enable transparency and accountability throughout the project,’’ the Danquah Institute, a policy think tank linked to the opposition New Patriotic Party, said in a statement.

Another PPP, the Savannah Accelerated Development Authority (SADA), established to help fast-track the development of the northern parts of Ghana, has not been spared a similar fate. Recently, however, SADA has been mired in controversies over a GH¢ 15 million “But a common guinea fowl and another GH¢ 33 million problem with PPP forestation projects, a development that sends strong signals to all prospective projects, analysts say, PPP participants, especially public sector is that private investors parties that PPPs will not benefit from the popular support and citizen ownerships obtained a rate of return they need, if the processes remain that was higher than opaque and extractive. Only openness; will insulate the implementation of such the government’s bond policies from the vagaries of suspicion rate, even though most and apathy.

Successive Ghanaian governments have openly acknowledged the role of private politics referred to as “the private sector” in their efforts to bring development to the people. In the Kufuor administration, a whole ministry for private sector development was set up to make it a capable partner to government for national development.

In the 2004 Public Private Partnership (PPP) policy guidelines, which attempted to officially integrate the two sectors in the or all of the income risk development process, the private sector was Similarly, a subsisting Memorandum positioned as Ghana’s “engine of growth” associated with the of Understanding (MOU) was signed to indicate its importance. Unfortunately, project was borne by between the government of Ghana and failure to fully operationalize the guidelines Queiroz Galvao, a Brazilian construction denied the sector, the needed energy and the public sector.” firm for the upgrade of the Tamale capacity (fuel, body and tyres) to drive Airport into an international airport. The the economy to the envisaged destination. partnership involved a sum of $174 million. Queiroz Galvao is In the Atta-Mills administration, the initiative was maintained, into another MOU with the Ghanaian government to redesign leading to the launch of another national policy document on and rebuild the strategic and popular Nkrumah Circle in Accra PPP in June 2011, by then Minister of Finance and Economic under a similar PPP arrangement. Analysts however criticize Planning Dr. Kwabena Duffuor. both arrangements as unfavorable to Ghana and attempts to hand over both projects to foreigners through the back door. But a common problem with PPP projects, analysts say, is that private investors obtained a rate of return that was higher than the government’s bond rate, even though most or all of the income risk associated with the project was borne by the public sector. It is certainly the case that government debt is cheaper than the debt provided to finance PFI (Private Finance Initiatives) projects, and cheaper still than the overall cost of finance for PFI projects, such as the Weighted Average Cost of Capital (WACC). This is of course to attempt to compare incompatible and incomplete economic circumstances. It ignores the position of taxpayers who play the role of equity in this financing structure. Making a simple comparison, however, between the governments’s cost of debt and the private-sector. WACC implies that the government can sustainably fund projects at a cost of finance equal to its risk-free borrowing rate. This would be true only if existing borrowing levels were below prudent limits. The constraints on Also, government’s involvement in the development of the Hope public borrowing suggest, nevertheless, that borrowing levels City project of local telecommunications giant, rLG has raised are not currently too low in most countries. These constraints some eyebrows. The Ghanaian government has been asked exist because government borrowing must ultimately be funded to clarify the Public-Private Partnership (PPP) agreement for by the taxpayer. the Hope City project, set to house the country’s ICT sector. The US$10 billion project aims to construct a hub where the That being the case, time may have come to replace the publiccountry’s ICT sector will grow and flourish. private partnership model with the Public–Private Community Partnership (PPCP) model, wherein both the government and But observers have asked that government clarify the nature private players work together for social welfare, eliminating the of the PPP since, according to them, there were other similar prime focus of private players on profit. projects that got bungled. The Hope City project is said to be

GHANA BUSINESS & FINANCE

SEPTEMBER 2013

ECONOMY

In Pursuit of Justice - at what cost to economic growth and development? by Eric Kwame Amesimeku

Yet again Ghana achieves another first in the Sub-Saharan Africa region being the first country that has tested its democratic credentials to what could be described as ‘the breaking point level’ - by resorting to the Justice system instead of the path of violence in resolving an electoral dispute keenly-contested 2012 Presidential and Parliamentary elections which resulted in a nearsplit of the votes cast, saw the defeated New Patriotic Party Presidential candidate, Nana Addo Dankwa Akufo Addo and his running mate Dr. Mahamudu Bawumia with the party’s National Chairman, Jake Obetsebi Lamptey filing a petition at the Supreme Court of the land challenging the validity of the election of John Dramani Mahama as President of the land. The process lasted for over eight months and apart from the thick aura of anxiety that hang over the nation throughout this period and threats of violence, the cost to the nation’s economy cannot be overemphasized. Throughout the nation’s democratic experiment since 1992, every year after elections has witnessed a near-meltdown of the nation’s economy thanks largely to the unguarded expenses by the keepers of the nation’s purse during the preceding election year. For instance, in 2001 after the 2000 elections, all the economic indices were pointing to a downward trend in economic growth. Fast Forward to 2009 after the 2008 elections and one would not be far from right in praising the nation’s leaders for their consistency in being imprudent d u r i n g electioneering years - inflation stood at 19.86 as at February that

year, the highest at the time since January 2004 according to figures released by the Statistical Service; the country’s budget deficit for 2008 had reached a staggering 24.2 percent of Gross Domestic Product (GDP) after debts of 1.7 billion cedis ($1.16 million) were included, Finance Minister Kwabena Duffuor disclosed at the time; foreign reserves tumbled to 2.4 months of import cover against a depreciating Cedi which had lost about half of its value against the dollar in the first half of 2009. Was it just meant to be a challenging year for Ghana? Not that 2013 was any exception from the other after-election years cited, but the only difference this time was that after months of sitting on tenterhooks with most able-bodied people glued to their Television sets, most of the productive hours in the first two quarters of the year were lost to following the Election Petition in court by people eager to satisfy their curiosity. The figures point this out - inflation has been on the rise and currently stands at 11.40 per cent, the nation’s economic growth rate, in spite of a booming oil industry stood at 6.7 per cent as at the end of the Second Quarter. Investor confidence in the country had tumbled down due to the fact that most investors were waiting to see the outcome of the Election Petition before throwing their monies in the country, of course mindful of the unstable region Ghana is located. According to the Bank of Ghana, in a release by the Governor, Dr. Kofi Wampah “Business sentiments softened with the Bank’s Composite Index of Economic Activity (CIEA) declining from 99.0 in March to 92.4 in June 2013. And even the President of the land, whose legitimacy was being challenged, had a course to retort at a point that he “couldn’t wait to see the Petition end and everything brought to a close” underlining the cagey situation he found himself in. These sentiments of a declining business confidence is indeed shared by industry as well. Seth Twum Akwaboah, Executive

GHANA BUSINESS & FINANCE

SEPTEMBER 2013

verdict. And thus in anticipation of this,they were making preparations for their trips outside the country. Which way - economic success or a deepening of democratic practice? But whereas the pursuit of economic growth leading to prosperity and meaningful livelihoods for the citizenry should preoccupy the leadership of the nation, this obviously cannot be done at the expense of a deepening of the nation’s democratic and governance systems. Indeed, the diligent discharge of duty by the Justices of the Supreme Court of the land also shows to a large extent a growing practice in the country where institutions are now being allowed to work and operate freely, a development that is in sync with the call by President Barack Obama of the United States of America, when he visited Ghana in his first term in office and admonished African leaders to “Build strong institutions and not personalities.” Thus, whilst the economy might have seen a bumpy ride in the first two quarters of the year during which the Election Petition was being heard, the cost to the nation’s democratic experiment and stability would have been greater had the three petitioners decided on an alternate course, which in this part of the world would have been institutions and - civil strife and violence!

Secretary of the Association of Ghana “The Industries (AGI), in a quick chat with individuals that support GB&F revealed that the Association’s Indeed, Dr Michael Abu Sakara, the Business Barometer Indicator (BBI), the country’s economy presidential candidate of the Convention an index that measures the general People’s Party (CPP)) for the 2012 are holding back to sentiments of industry on the nation’s elections, is reported to have described see the outcome of the economy, “Dropped significantly in the the election petition case as an investment first quarter of 2013 and marginally in in Ghana’s democracy and long term election petition before the second quarter,” though he was In his words “the Supreme Court they commit their input.” stability. quick to add that this could not be case is an important landmark and could attributed to the election Petition as mark the beginning of an entire new era the Association does not look at such political developments in Ghana’s democracy.” in undertaking its research.According to Mr Akwaboah, “This year has been a very challenging year for industry” citing the Needless to say that whatever cost has been incurred by the energy crisis as “the major contributor to the decline in business Election Petition to the nation’s economy, the nation has come confidence in the economy on the BBI.” Other contributors out ‘bruised in terms of its economic fortunes, but better in which drove down the index included cost and access to credit terms of its adherence to the tenets of democracy.’ Indeed, the for the business community. consequence of an alternative Groups like the Trade Unions Congress (TUC) have however blamed the Election Petition for the nation’s faltering economic fortunes in the year. According to Kofi Asamoah, the SecretaryGeneral of the TUC in a release “The economy in the last five years has made an aggregate improvement as measured by the 8.7% increase in the GDP and the relative stability in the inflation rate which shot up from 8.8% in January this year to 10.6% in April.” The General Secretary added that “The institutions and individuals that support the country’s economy are holding back to see the outcome of the election petition before they commit their input.”

action to the court petition would have been dire than the country could bear.

The banking sector,a critical sector in the nation’s economy also took a hit as reports of customers making huge withdrawals from their savings was an all too common occurrence during the closing stages of the Petition hearing. These withdrawals,according to banking sources who had spoken to some of the clients,were

SEPTEMBER 2013

GHANA BUSINESS & FINANCE

ECONOMY

occasioned by the fear and anxiety of those customers that the nation would degenerate into chaos and anarchy after the

ADVERTORIAL

AFRICA HOSPITALITY SHOW

frica is undoubtedly endowed with human, cultural and natural attractions. It is the cradle of civilization and huge repository of tourist attractions in different geographical locations with varying cultural heritages. Over the years, people from all over the world travel to this magical and charming continent to engage and interact with the people, living in different places with fascinating cultures. Every country in Africa has very unique identities, cultures and attractions. These have helped in generating revenue for the countries and the people who are the custodians of these attractions. Africa Hospitality Show is an annual event to showcase the attractions, engage stakeholders and governments, and bring all the industry players, stakeholders and partners from all over Africa and the world together. Attractions which appeal to tourists and earn more revenues must be paid the needed attention on such platform. It will bring industry players under one roof where they can engage more actively and productively. Industry players, tourists, stakeholders, policy makers and governments from all over Africa and the world are expected to be active participants of this prestigious tourism development event. Africa Hospitality Show 2013 is a whole marketplace in one place, at one time. The show is a congregation of suppliers, buyers, consultants and the media, all coming together to give your business the versatile marketing platform to build on. We will also provide you with several excellent networking opportunities with your clients and prospects, including those from our neighboring countries and the rest of the world.

GHANA BUSINESS & FINANCE

SEPTEMBER 2013

presents

y r a t n e m e l p p u a special s e l i b o m o t u A s ’ a on Ghan 1 t r a p y r t s u Ind

SEPTEMBER 2013

GHANA BUSINESS & FINANCE

SPECIAL FEATURE

Meet the All-New Tata Indica Vista

built with a touch of class It’s a new way to look at style, comfort, performance and life itself. Discover how it changes everything. Let us look around what it has to offer: Stylish Look The Indica Vista is bigger in size and interior space. It has a sporty frontal look with distinctive petal-shaped headlamps and pronounced signature Tata grill. The look is accentuated by muscular wheel arches blending with contoured surfaces along its flanks. The characteristic vertically stacked tail lamps are unique in its class. Efficient Engineering The Indica Vista is powered by an all new 1.4 litre Safire gasoline engine which has comes with: • Port- deactivation to vary the size of the port according to the load and speed for the maximum power with optimum fuel usage. • Continuous variable cam which varies the engine timing to perfectly suit the drive conditions thus giving better fuel economy with great performance. • Drive-by-wire for accurate throttle inputs for great response. The stiffer front suspension subframe with strut mounted anti roll bars and a new semi-independent twist beam near the suspension with gas charged dampers isolate noise and vibration while improving ride quality.

Suspension Details • Twist beam rear suspension The front and rear suspension combination gives you a comfortable ride and good handling, while the twist beam in the rear also ensures a good load ability. • Front & rear gas dampers The gas dampers used all round on the Vista provide excellent damping ability and offer miles after miles of service. • Strut-mounted anti-roll bar The strut mounted anti-roll bar is performance car-inspired and ensures a more direct action thus delivering sharp turn-in and handling characteristics.It has turning radius of 5m and ground clearance of 165 MM which is among the best in its class.

Comfortable Interiors To complement the exterior, the Indica Vista has a combination of stylish two tone interiors characterized by clean surfaces with an emphasis on simplicity and utility. The Mp3 CD player music system and the break-through central instrument cluster draw you into the Indica Vista experience.

SEPTEMBER 2013

Comfort and Convenience The vehicle is packed with numerous convenience features such as HVAC, Power windows, Power Steering, Remote central locking with immobilizer and remote integrated in the key itself. Other features include the tilt adjustable feature of the steering wheel in conjunction with a height adjustable driver’s seat which ensures correct driving position, illuminated vanity Mirror, an all-new console which comes with well-designed utility spaces and a large deep glove box that can even accommodate a compact laptop and 231 Litres of boot space with 60: 40 split of rear sets. Safety The Vista has been designed with an Driver Airbag as a passive safety feature along with a host of active safety features namely Child Lock, Rear Demister and wiper, Immobilizer.

Specifications Engine Cylinders 4 Capacity (cm3) 1368 Valves (per cylinder) 2 ( 8 Valves) Power Output (kW@r/ 55 @ 6000 min) Torque (Nm@r/min) 114 @ 3250 Fuel Injection MPFI Emissions Level EU 3

GHANA BUSINESS & FINANCE

SPECIAL FEATURE

Toyota gives meaning to customer satisfaction Launches Express Maintenance service in Tema him, “Egypt, Algeria and Morocco are the only other countries in Africa which currently provide the EM service.” The Minister for Employment and Labour Relations,Nii Armah Ashietey,who was the special guest of honour at the launch,expressed the government’s gratitude to Toyota Ghana limited “For not only providing the best of vehicles to the Ghanaian market but for also giving real meaning to Corporate Social Responsibility.” “Toyota Ghana” according to the Minister, “Has provided potable water for the people of Afuaman in the Ga West District and has also refurbished the TB/HIV unit of the Kaneshie Polyclinic,a feat worth emulating by other auto companies in the country.”

Toyota Ghana limited, a leader in the automobile industry in Ghana has yet again set another benchmark for customer service delivery as it launches its Express Maintenance (EM) Service for its customers in Tema and its environs. The service which forms part of the Toyota Customer Service Workshop Management Programme introduced by Toyota globally in 2001, has at its core, an objective to improve customer satisfaction and guarantee prompt and timely delivery of serviced vehicles within a stipulated time. The Tema facility, equipped with state-of-the-art equipment, guarantees customers a lead-time of approximately 60 minutes from reception to vehicle delivery, and is the third of such EM service centres in Ghana after the introduction of the service in the Accra and Kumasi branches of the company. He entreated companies like Toyota Ghana to create adequate room for students in the country’s technical institutions to undertake attachments in their companies to not only acquire the needed practical skills set needed for their future endeavours,but also to serve as breeding grounds for such companies to unearth budding talents. Currently, some of the model line-up of Toyota such as its saloon cars,SUVs,the Land Cruiser series,Prado,Fortuner and the Hiace bus can all enjoy the Express Maintenance service of the company.

Launching the EM service, the Managing Director of Toyota Ghana Limited, Mr Takahiko Takabayashi, underscored Toyota’s commitment to ensuring the safety and convenience of its clientele and thus the introduction of this programme to the Ghanaian market. “The objective of the EM Programme is to improve customer satisfaction.” Mr. Takahiko pointed out. “Customer convenience is achieved by drastically reducing the service lead-time of periodic maintenance,” he added.

The automobile industry in Ghana is gradually becoming a very competitive arena with various players always innovating and introducing new services in order to guarantee satisfaction for its clientele and by so doing increase their market share ,and Toyota Ghana has been at the forefront of offering fast,efficient and reliable services to its clients.

Tadashi Anazawa, Field Operations Manager, Bahrain representative office of Toyota Motor Corporation who witnessed the launch of the EM service of Toyota Ghana at its Tema branch emphasised the importance of the Ghana market to the operations of the Toyota Corporation. This, he revealed,underlined the choice of Ghana to be the first beneficiary of the EM service in the Sub-Saharan Africa region.According to

GHANA BUSINESS & FINANCE

SEPTEMBER 2013

SPECIAL FEATURE

Mercedes Benz CLS CLASS The Mercedes CLS class is a gussied-up E-class that manages to be much more than the sum of its parts. The CLS looks like a coupe, but retains four doors and nearly all of the practicality. Puts a little sex-appeal back into the Merc range without ending up at the door of the SLR.

Comfort A touch firm if you’re old, but for most rational humans the CLS feels pretty much spot-on. There is a decent chunck of cruising ability woven into the mix and apart from a bit of tyre roar if you have a big wheels , little intrusion. Strangely the standard coil springs are comfortable than the higher-spec and AMG models and their air-suspension. Performance There three petrol engines on offer for the CLS –a 3.5- litre with 292bhp, a five-litre with 388bhp and a 6.3-Litre AMG with a heart stopping 514bhpplus a three litre disel. The 3.5 is quick, but is more relaxed, less hurried, more genteel. The V8s have enormous power and make the the CLS into a pukka sippercar, especially the 6.3- litre AMG. It is good for 514bhp, 464lb ft of torque and the sort of acceleration that instills in you an overwhelming paranoia about Plid. You drive the CLS 63 AMG like

a caricature of criminality, shiftily searching this way and that for a safe moment to plant your right foot. The 62mph benchmark is dispatched in 4.5 seconds, the limiter set at 155mph. But it’s what goes on in between that which really gets the guilt pulsing through your veins. There’s so much seamless grunt through the seven-speed auto ‘box that it’s nigh on impossible to avoid some major law breaking in your own street. Cool Very cool. Even when you know what it really is. Quality Extremely, well put together and containing some great materials and design. Proven and solid drivetrains and engines-this is a car that will uphold the Merc’s reputation. Handling The Mercedes CLS uses the same chassis

SEPTEMBER 2013

as the E-Class, albeit a lowered and firmed up version. So the car is sharper through the corners, is more competent with the flatter ride and has less body roll. The standard version’s normal coilsprings have a much nicer ride than the AMG with its air suspension which feels more of the bumps. Practicality The coupe like shape means that rear seat passengers inevitably have less space than in the equivalent E-class, but its pretty big in there. Trouble is the doors are quite too small and the sills high – so there are some access issues. The boot’s big and useful at 505 litres. Running Costs The CLS suffers from high company car tax liabilities and poor fuel economy meaning it won’t be a cheap car to run. However, for private buyers the car’s huge desirability should see it keeping its values well.

GHANA BUSINESS & FINANCE

SPECIAL FEATURE

Particularly charming: the new Passat The new Passat offers more of everything: more comfort, more driving fun, more character. Whether for an exciting family or a demanding professional life, its everyday usefulness is outstanding. Get in and see for yourself the elegant interior with its high-quality equipment. Impressively elegant: the design Its performance is brilliant. The design of the new Passat convinces with refined details like the chrome strip on the tailgate, the elegant surrounds of the headlamps and fog lamps, and the slim side mirrors. While the distinctive radiator grille with chrome strips on the fins emphasizes its dynamic proportions. A captivating sight. Inviting style: the interior Wellness begins when boarding: The ergonomically designed front seats available with electric 12-way adjustment - offer particularly excellent long-distance comfort. Let yourself gaze calmly. The optional panoramic sunroof gives the new Passat a very special atmosphere, creating a coupe-like sense of space. Great generosity: the boot The new Passat Variant can be proud of its spacious luggage compartment. If you choose, you get a baggage management

package with compartment divider for additional storage space that extends to the spare wheel section (where you can store fragile luggage), as well as the sliding cargo floor to carry heavy objects safely. Pleasantly calm: the ride The new Passat is exceptionally quiet. This contributes significantly to the driving comfort. With the optional multi-color multi-function display “premium” you also have all the important vehicle information at a glance, so you can fully relax and concentrate on the road. And from the equipment package “Comfortline” the standard fatigue detection recommends a break where necessary. Certainly helps: the driver assistance systems The new Passat not only looks good but is also well thought out. Because it offers cutting-edge technologies, such as automatic distance control with the environment monitoring system “Front Assist”. Here is the brand new integrated city emergency brake. Using a radar sensor it observes the traffic ahead and helps prevent rear-end collisions effectively.

GHANA BUSINESS & FINANCE

SEPTEMBER 2013

SPECIAL FEATURE

2013 Land Rover Range Rover Evoque

The 2013 Land Rover Range Rover Evoque is one of the most expensive models in the class, but according to reviewers, it’s worth the money. All 2013 Range Rover Evoque models come with a turbocharged, four-cylinder engine, a six-speed automatic transmission, allwheel drive and Land Rover’s Terrain Response system. Terrain Response adjusts the engine, transmission and traction settings to accommodate paved, grassy, gravely, snowy, muddy, rutty and sandy conditions. With this system, test drivers say the Range Rover Evoque excels off-road. Although many luxury compact SUVs offer V6 engines, reviewers are quite satisfied with the turbocharged engine’s performance. Reviewers agree that the Range Rover Evoque’s front seats are spacious and comfortable, but they think the Range Rover Evoque’s exterior design hampers

rear visibility. Also, they mention that the sloping roof decreases rear-seat headroom in the two-door model. Range Rover Evoque in five door form offers breathtaking contemporary kinetic design with added practicality, superb accessibility and extraordinary versatility. Bold and compact, Range Rover Evoque uses the latest materials and technology to help make it the most efficient Land Rover vehicle ever. There is even an eD4 2WD Diesel engine to further help optimise fuel economy.

Pure - the purest expression of the Range Rover Evoque design form and intent. Prestige - the ultimate in Range Rover Evoque luxury with a distinct exterior design and an opportunity for greater individuality for the interior. Dynamic - the boldest expression of Range Rover Evoque with sports interior themes and Gloss Black detailing.

Range Rover Evoque also gives you the opportunity to create precisely the vehicle you want with an extensive selection of exciting colours, materials, finishes and luxury options, all based on 3 stunning, totally individual design themes: RANGE ROVER EVOQUE DYNAMIC PLUS INTERIOR DESIGN THEMES Taking Range Rover Evoque to a superior level is Dynamic Plus which adds an optional interior package that now includes three stunning sports design themes – new Accolade, as well as Agility and Velocity – with unique one-piece sports seats, premium leather and special metal finishers. Accolade and Velocity themes are also available with standard seats. This is Dynamic Plus. ACCESSORIES It’s your Range Rover Evoque. Unmistakably so with a range of exclusive accessories that reflects your lifestyle and your personality. Importantly, Range Rover Evoque exclusive accessories can be added at any stage during the vehicle’s life… not just when it’s new. A selection of accessories is illustrated here. Range Rover exclusive accessories are designed and manufactured to the same exacting standards as the original equipment fitted to your vehicle. Visit www.landrover.com for more information.

GHANA BUSINESS & FINANCE

SEPTEMBER 2013

PHOTO GALLERY

TOYOTA GHANA LAUNCHES EXPRESS MAINTENANCE SERVICE 1

2 3

1. Mr Takahiko Takabayashi, MD of toyota ghana cutting the tape looking on is Honorable Nii Armah Ashitey, minister for employment and labor relations 2. Dignitaries at the high table during the launch 3. Dignitries at the event watching the service men at work 4. Cross section of invited guests at the Launch 5. Toyota mentainance Service men at work 6. the plaque which was being unveiled by MD of Toyota 7. Introduction of the Toyota mentainance men 8. Cross section of the waiting lounge 7

GHANA BUSINESS & FINANCE

SEPTEMBER 2013

PHOTO GALLERY

LAUNCH OF THE GHANA DIRECTORY OF SCHOLARSHIPS & FINANCIAL ASSISTANCE

1 3

1. Registration at the Launch 2. Cross section of Invited guests in attendance 3. Hon. Professor Naana Opoku-Agyeman Minister for Education at the event making her speech 4. Dr Ekwow Spio-Garbrah (r) with Deputy Minister for education (l) having a discussion 5. Bishop James Saah, Senior Bishop of Action Chapel represented Archbishop also buying some of the books 5

SEPTEMBER 2013

GHANA BUSINESS & FINANCE

PHOTOGALLERY

BAYPORT REBRANDING 1

2 3

1. Invited guests at the launch 2. Cross section of Bayport staff 3. Short play at the launch 4. Mr. Pianim, Chairman of Bayport delivering his speech 5. Kwame Sefa Kayi (r) and Yeboah of Bayport having a chit-chat 6. The display of the financial need concept 7. Cross section of dignitaries at the high table 8. The old brand 9. The new brand 7

GHANA BUSINESS & FINANCE

SEPTEMBER 2013

one of the world’s poorest countries. “My family and I went to congratulate Mr Keita, the future president of Mali, on his victory. May God bless Mali,” Cisse, a former finance minister, said on his official Twitter feed. A spokesman for Cisse, who comes from northern Mali, said his candidate had admitted defeat after it became clear Keita had won even in Gao, the largest town in the north.

Ibrahim Boubacar Keita, President Elect of Mali

Ibrahim Boubacar Keita, an ex-prime minister with a reputation for firmness, won Mali’s presidential election after his rival conceded defeat in a poll meant to draw a line under more than a year of turmoil. Keita, 68, universally known by his initials IBK, will now have access to $4 billion in international development aid to rebuild the West African country after a French military intervention in January ended Islamist rebels’ occupation of the northern two-thirds of Mali. He inherits a broken nation and must move quickly to overhaul the armed forces, tackle ingrained graft and negotiate peace with northern Tuareg fighters clamoring for more autonomy from the southern capital Bamako, Reuters reports. The concession by his rival Soumaila Cisse, who had complained only hours earlier that the second-round vote had been marred by fraud, hands Keita a strong mandate to undertake reform in the landlocked former French colony,

Massmart looks at Kenyan acquisition Massmart Holdings Ltd., South Africa’s biggest food and household-goods wholesaler, said it has met “several important players” in Kenya’s retail industry as the unit of Wal-Mart Stores Inc. seeks expansion abroad. “Massmart’s interest in investing in Kenya is well known,” Chief Executive Officer, Grant Pattison said in an

Keita, who earned his reputation for firmness by crushing student protests as prime minister in the 1990s, had been widely expected to clinch the runoff. He swept a July 28 first round with nearly 40 percent of votes on a ticket to restore dignity and order to a nation once regarded as a model for democracy in a turbulent region. International and local observers said that, barring some small irregularities, the election was exemplary. France had pressed for the vote to go ahead quickly as it draws down its 3,000 remaining troops in Mali and hands over to a U.N. peacekeeping mission, despite fears a rushed process might undermine the legitimacy of a new president. “This election, from a democratic standards point of view, is a success,” said the head of a European Union observer mission, Louis Michel. “It is an election that allows Mali now to start finishing the process that it has begun: the return to a normal democracy.” Keita has said his top priority will be to secure lasting peace for northern Mali, which has been racked by five bloody rebellions since independence from France in 1960. Light-skinned Tuaregs have accused successive black

e-mailed response to questions. “We don’t however, comment on acquisitions, potential, speculative or otherwise.” Business Daily, a Nairobi-based newspaper, reported the South African company’s meetings earlier in August this year saying that among possible targets in Kenya, Massmart’s potential interest triggered a dispute about whether to sell among investors at family-controlled Naivas Supermarket Ltd. Nakumatt Holdings Ltd., East Africa’s largest retail chain by sales with a network of 40 outlets, said on July 25 that there are no plans to sell its shares. Tuskys, a

SEPTEMBER 2013

African governments in the south of marginalising the underdeveloped region. Tuaregs took up arms again early last year, alleging Bamako had violated a 2006 peace accord meant to develop the north. Former President Amadou Toumani Toure’s failure to tackle that revolt led to the coup which tipped the country into chaos. Keita has promised to open inclusive talks with all the peoples of northern Mali – black African, Arab and Tuareg - but many in the south are hostile to funneling more of Mali’s scarce resources to a region they see as responsible for the country’s plight. “There is a challenge of national reconciliation,” said Chris Fomunyoh, senior associate for Africa at the National Democratic Institute in Washington. “There is a lot of unease between ethnic groups, not just north versus south, but even within the north itself.” The 12,600-strong U.N. peacekeeping mission being deployed will take over responsibility for security as France whittles down its contingent to just 1,000 troops – a rapid reaction force meant to tackle any outbreaks of Islamist violence. A EU mission is also retraining and equipping Mali’s armed forces, demoralised by last year’s defeats at the hands of the Tuaregs and al Qaedalinked Islamist rebels. MUJWA, one of three Islamist groups which seized control of northern Mali last year, had threatened to carry out attacks on polling stations in northern Mali before the July 28 first round but the electoral process passed off without any violence.

Nairobi-based retailer with 42 stores in Kenya and six in Uganda, hasn’t held any talks with Massmart, a company official, speaking on condition that he not be identified, said by phone. Tuskys sees prospects of opening more outlets in the near future and entering nearby countries, according to its website. Wal-Mart, the world’s largest retailer, has a 52 percent stake in Johannesburgbased Massmart. The South African company has said that its first-half sales growth slowed to 5.5 percent, from 7.3 percent in the six months through December 2012, as rising unemployment discouraged spending by consumers.

GHANA BUSINESS & FINANCE

AFRICA BRIEFS

Keita wins Mali presidential vote after rival admits defeat

AFRICA BRIEFS

Ivory Coast to audit no-bid government deals, may cancel some Ivory Coast will launch an audit of no-bid public procurement contracts and may cancel those which failed to follow tendering procedures amid donor concern that a lack of transparency in government deals may deter investors.

sole-sourced, according to ANRMP statistics. The figure rose to over 57 percent, or nearly 77 billion CFA francs, in the first three months of this year, according to data presented at a recent cabinet meeting. Open tenders accounted for just 16 percent. The government has rejected criticisms that the large number of untendered deals has led to a lack of transparency in public procurement, saying they are necessary if Ivory Coast is to rapidly implement its reconstruction policy.

President AlassaneOuattara

President Alassane Ouattara has won praise for rapidly reviving the economy of the world’s top cocoa grower after a decade-long political crisis that ended in a brief 2011 war. The West African nation posted GDP growth of 9.8 percent last year and is projected to be one of Africa’s best economic performers in the years to come, Reuters reports. Ivory Coast has earmarked 1.03 trillion CFA francs ($2.1 billion) – or more than a quarter of this year’s budget – for investment spending, up from 620 billion in 2012. But as the country rebuilds, the number of solesource contracts – deals in which only one bidder is solicited – has spiked. “We’re seeing that more deals are done under sole-source contracts than through open tender,” Non Karna Coulibaly, president of the National Public Procurement Regulating Authority (ANRMP) which is commissioning the audit, has said. “Right now we’re not judging. We just want to see why it has developed this way,” he said. Coulibaly said the agency, which was established in 2009 to independently monitor public procurement, will review solesource contracts awarded from 2011 to 2013 in three yet-to-be announced sectors. The audit is due to be completed by the end of the year with results to be published in the first half of 2014. By value, around 40 percent of all contracts awarded in 2012 were

Donors however had expected the number of such contracts to decrease with time. Many now worry that the potential for corruption could cause investors to stay away from Ivory Coast at a time when it is in desperate need of financing.

“The desire for expediency in post-war reconstruction doesn’t explain away the fact that contracts worth hundreds of millions of dollars are being handed out in a very questionable manner,” “This is damaging investor confidence and Ouattara’s international reputation,” one western diplomat told Reuters, requesting not to be identified. “The desire for expediency in post-war reconstruction doesn’t explain away the fact that contracts worth hundreds of millions of dollars are being handed out in a very questionable manner,” he said. Coulibaly said the audit will look at various ways to curtail the number of untendered deals and foster transparency, possibly recommending a cap on the number of sole-source contracts ministries can award.

Sifiso Dabengwa, CEO-MTN Group, South Africa

MTN profit rises, beating estimates, as it gains more subscribers MTN Group Ltd., Africa’s largest wireless network operator, said first-half profit rose 22 percent, exceeding estimates, after subscriber numbers increased in fast-growing markets including Nigeria and Ghana. Sales advanced 9.8 percent to 65.2 billion rand ($6.5 billion), the Johannesburg-based company said in a statement. So-called headline earnings per share, which exclude one-time items, were 6.54 rand for the six months through June, compared with 5.36 rand a year earlier, beating the 6.49 rand median profit estimate by four analysts in a Bloomberg survey. Total subscribers increased 6.5 percent to 201.5 million, supported by 7.8 million net additions in Nigeria and further growth in smaller African markets such as Sudan and Ivory Coast. South African customer numbers declined slightly after weak consumer spending and tough competition hampered the business in Africa’s largest economy. MTN plans to add 21.1 million subscribers in the full year, the company said. “MTN will try to lower its cost base in South Africa in order to compete with aggressive rivals,” Chief Financial Officer Brett Goschen told reporters at a press conference. “Savings will probably come from a reduction in distribution and procurement costs, while the company is reviewing its headcount,” he said.

He said the agency would also weigh possible sanctions against companies and individuals found to have circumvented proper procedures in order to obtain contracts.

MTN has expressed interest in expanding into other markets such as Madagascar, according to people familiar with the matter. A move into India is also “worth considering”, Chief Executive Officer Sifiso Dabengwa told reporters. The company has held talks about a potential tie-up with Reliance Communications Ltd. of India this year, three people familiar with the matter said in May.

While the presidential order creating the ANRMP provides it with the authority to punish abuse, it is still awaiting a decree from the finance ministry outlining its powers.

MTN plans to pay a gross dividend of 3.70 rand a share. The company said on Aug. 1 it made a currency gain of about 1 billion rand during the six-month period, compared with a 1.5 billionrand loss the previous year.

GHANA BUSINESS & FINANCE

SEPTEMBER 2013

AVIATION

SAA scoops more awards South African Airways (SAA),the official flag carrier of South Africa has been named the winner in the Airline Consumer category at the recent Sunday Times Top Brands Awards 2013. This award, according to Suretha Cruse, a Customer Service and Loyalty executive shows “That we have much to be proud of as...our valued customers, chose us as their number one airline of choice.” “We were also voted amongst the top five companies in the Business to Customer Most Desired Company to work for, sharing the stage with companies such as Eskom, Coca Cola and Telkom,” she added.

Meanwhile in another positive development, SAA has outdoored a payment plan through which customers can make payments for their tickets through Stanbic bank. The new arrangement, according to the airline,is to create an easy and hasslefree payment system for customers of the airline.

SAA also dominated the awards at the second Annual Business Traveller Africa Awards, which was held in association with ABSA at the Maslow Hotel in Sandton, Johannesburg. SAA was awarded the top award in other categories: Best African Regional Short-Haul Airline;Best African Long-Haul Airline;Best Business Class. Adding these latest awards to its record of excellence, SAA has won eleven awards so far this year. In June this year, SAA celebrated its eleventh Best Airline in Africa Skytrax Award in a Row.

GHANA BUSINESS & FINANCE

SEPTEMBER 2013

AVIATION

FLIGHT SCHEDULES 388,800 People used domestic airlines in first half

Airline

Service

Origin

GMT

Code No. TYPE

SUNDAY Kenya Airways KQ

508

738

Nairobi

13:10

More than 388,800 people travelled by air within the country in the first six months of the year, data from the Ghana Airports Company Limited (GACL) have showed. Within the period, May recorded the highest monthly air traffic of 69,844 people while February had the lowest passenger throughput of 53,289 people.

Emirates

Virgin

VS 657/8 343 Heathrow 5:25

The data showed further that Antrak Air dominated operations in the first half of the year with 40 per cent market share. This was followed by Starbow. Its passenger throughput within the period represented 34 per cent of the total air traffic and was only six per cent behind the market leader, Antrak Air. Fly 540 also recorded air traffic of 66,695 people, representing 18 per cent of total air traffic within the period under review. About 29,067 people also used the services of African World Airlines (AWA), indicating that the airline which started domestic airline operations in late last year controlled seven per cent of the market share in the first half of the year.

Egypt Air

The remaining one per cent of the period’s passenger throughput was shared by Belgian-based domestic airline operator, Noordzee Helikopters Vlaanderen (NHV), and charter flights.

EK 787/788 777 Abidjan 17:20

MONDAY Kenya Airways KQ Emirates

508/509

738

Nairobi

13:10

EK 787/788 777 Abidjan 17:20 881/2

738

Cairo

13:00

TUESDAY Kenya Airways KQ Emirates

508/509 508/509

Nairobi

13:10

EK 787/788 777 Abidjan 17:20

Virgin

VS 657/8 343 Heathrow 5:25

Egypt Air

881/2

738

Cairo

13:00

508/509

738

Nairobi

13:10

WEDNESDAY Kenya Airways KQ Emirates

EK 787/788 777 Abidjan 17:20

Virgin

VS 657/8 343 Heathrow 5:25

Egypt Air

881/2

738

Cairo

13:00

508/509

738

Nairobi

13:10

THURSDAY Kenya Airways KQ Emirates

EK 787/788 777 Abidjan 17:20

Ghana, Brazilian firm sign $100m agreement to upgrade Tamale Airport

Egypt Air

The Ministry of Transport has signed an agreement with Geiroz Galvao Construction, a Brazilian construction company, for the upgrading of the Tamale Airport to meet international standards.

Emirates

EK 787/788 777 Abidjan 17:20

Virgin

VS 657/8 343 Heathrow 5:25

Egypt Air

The airport, which would be constructed with a loan facility from the Brazilian Government would serve as an alternative airport to the Kotoka International Airport, in Accra.

Kenya Airways KQ

Speaking at the signing ceremony in Accra, Mrs Doreen OwusuFianko, Managing Director of Ghana Airport Company Limited (GACL), said Tamale was chosen for the project because “Hajj has become big business nowadays, and the upgrading the Tamale Airport would enable pilgrims to embark on their journeys from Tamale instead of traveling to Accra”. Although the total amount earmarked for the project was not given, Mrs Fianko said the construction of the runway alone would cost about $100 million. Mrs Dzifa Attivor, Minister of Transport, who signed for Ghana, pledged the ministry’s commitment towards the aviation sector. Mr Marcos Silva, Managing Director of Gueiroz Galvao, who signed for his company, said the company had more than 60 years experience in the construction sector and had offices in more than 40 countries across the world.

881/2

738

Cairo

13:00

508/509

738

Nairobi

13:10

FRIDAY Kenya Airways KQ

881/2

738

Cairo

13:00

508/509

738

Nairobi

13:10

SATURDAY Emirates

EK 787/788 777 Abidjan 17:20

Virgin

VS 657/8 343 Heathrow 5:25

Egypt Air

881/2

738

Cairo

13:00

South African Airways (Accra to Johannesburg) DAYS Monday

TIME (departure)

Arrival

22: 30 pm

6:30 am

Tuesday

22: 30 pm

6:30 am

Wednesday

22: 30 pm

6:30 am

Thursday

22: 30 pm

6:30 am

Friday

22: 30 pm

6:30 am

22: 30 pm

6:30 am

22: 30 pm

6:30 am

Saturday Sunday

Source: http://www.ghanaairports.com.gh/FlightSchedules.htm

SEPTEMBER 2013

GHANA BUSINESS & FINANCE

EIU REPORT

Excerpts from the EIU report on natural resources in Ghana The management of Ghana’s natural resources, to a very large extent, has been nothing but abysmal, as managers have failed in coming up with effective policies that will inure some benefits to the general populace. For instance, for over a century now gold has been mined in the pits of towns like Obuasi, but the transformation that a city like Johannesburg in South Africa has seen, a mining town/city just like Obuasi, cannot be compared to the dusty roads deplorable amenities that Obuasi has. Against the recent discovery and production of crude oil in commercial quantities, it is pertinent to ensure that the new-found wealth is not managed in a similar fashion as happened to gold. We publish here excerpts from the Economic Intelligence Unit’s Report on Ghana’s Natural Resources. MANAGEMENT OF NATURAL RESOURCES Ghana’s parliament passed the Petroleum Revenue Management Bill in April 2011. This was four months after oil production commenced, six months after the final draft was introduced to legislators and a year after the first draft was introduced, reflecting lengthy debates, as well as the generally slow pace of policy implementation in Ghana. However, while lengthy, the development of the bill included wide-ranging consultation processes and technical assistance from donors, such as Norway, as the Ghanaian government was keen to adopt best practice (while at the same time learning from the mistakes made in countries such as Nigeria). Indeed, passage of the bill, while belated, has gone a long way towards addressing concerns that the administration may take a lax approach to the management of what is likely to become very substantial oil revenue. However, a number of concerns remain. The government hoped that passage of the legislation would help address complaints that it is not wholly committed to the transparent and effective management of oil revenue. However, some critics argue that, because the measure allows the authorities to use up to 70% of oil revenue as collateral for external loans, part of the battle to manage the revenue responsibly has already been lost. Certainly, there is a long history of regional oil producers, such as Angola, Nigeria, Equatorial Guinea and Congo (Brazzaville), managing oil-backed loans poorly, thereby denying the country vital resources for social and economic development well into the future. Indeed, the oil curse is a recognised phenomenon, with the start-up of oil flows

potentially leading to serious mismanagement and corruption, and even a downturn in economic growth. In addition, while the passage of the Petroleum Revenue Management Bill is a positive step, a second key piece of oil sector-related legislation—the Oil Exploration and Production Bill—has yet to be passed. This second bill is designed to address regulatory issues in the sector, including environmental and safety concerns, and the award of exploration blocks. Some civil society organisations allege that the system is overly opaque, while, in a late 2010 report, the Environment Ministry concluded that the environmental protection agency lacks the technical and mechanical capacity to regulate the offshore oil sector or deal with potential spills. Although the passage of the Petroleum Revenue Management Bill is to be welcomed, the failure to establish proper regulatory guidelines and capable institutions to carry out regulatory functions will remain a worry for both donors and oil-industry investors.

Sovereign Wealth Funds The final version of the Petroleum Revenue Management Bill mandates that 70% of revenue accruing to the state should be channelled to the government budget and the remainder to heritage and stabilisation funds, Ghana’s sovereign wealth funds (SWFs). The heritage and stabilisation funds will serve different purposes, with the former intended to smooth government spending in the short term and the latter designed to provide returns for future generations through investment and savings schemes. The rules governing the movement of revenue into and out of the petroleum funds clearly define under what circumstances transfers to the consolidated budget can be made, in what amounts and at what frequency. For example, when oil revenue falls below budget, perhaps owing to a fall in prices, the amount and frequency of funds that can be drawn from the stabilisation account to make up for the shortfall are clearly defined.

GHANA BUSINESS & FINANCE

SEPTEMBER 2013

The traditional role of the agricultural sector as the engine of growth has changed over the past two decades, with agriculture’s share of GDP falling from 40% in the mid-90s to around 25% currently. The industrial and services sectors have become the main drivers of growth. This was compounded in 2011 when the impact of the onset of oil production saw industry growth surge by over 40%, contributing to overall real GDP growth of 14.4%. Such a rate of growth was one-off in nature, but political stability and a generally favourable business environment should ensure that growth remains round the 7-7.5% level in the medium term.

The business environment Land laws are deficient, even by African standards. Land ownership is vested in local chiefs, who are responsible for allocating its use. It is not covered by normal legal convention, but by statutory and customary law. Therefore, while the allocation of land is theoretically clear, in practice land deals have often become very messy and transactions often fall through, even when a substantial sum has been paid as a deposit. Recovering this money through the courts is difficult. Firms wishing to acquire land must be prepared to face a drawn-out and expensive procedure. The government has shown a renewed commitment to tackling the issues in recent times.

1990s, which heralded an era of strong subscription growth and fierce competition between a number of privately owned service providers. Although competition has been good for consumers, bringing prices down, it has eroded the operators’ margins. Average revenue per user (ARPU) fell from US$9.7/ month in 2008 to US$6/month in 2010, according to the Ghana Statistical Service (GSS) and is estimated to have been around US$5/month in 2012. Meanwhile, according to the International Telecommunication Union (ITU), Ghana has had the highest investment/revenue ratio as operators attempt to develop their networks. The increased saturation of the market, combined with the tightening of margins, is likely to mean that the sector’s contribution to overall economic growth will slow in the coming years. There is evidence that this is already happening: the information and communication subsector of GDP recorded real growth of 24.5% in 2010, 17% in 2011 and an estimated 12.1% in 2012, according to the GSS. However, this does not mean that the era of double-digit growth is over. Rather, the Economist Intelligence Unit expects that competition and market growth will increasingly hinge on trends in mobile Internet use.

The Minister of Lands and Natural Resources committed the government to long-term land administration reform in February 2013, while the Canadian government announced in January that it would help Ghana reform land ownerships issues. Nevertheless, historically, rhetoric has not matched reality.

Real GDP growth (% change, year on year)

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Total GDP

5.9 6.2 6.5 7.1 6.5 8.4 4.0 8.0 14.4 7.1

Agriculture

4.7 5.6 2.8 3.2 -1.7 7.4 7.2 5.3 0.8 2.6

Industry

4.5 4.3 7.0 8.9 6.1 15.1 4.5 6.9 41.1 7.0

Services

11.0 11.2 13.4 6.2 7.7 8.0 5.6 9.8 8.3 8.8

Sources: Ghanaian authorities; The Economist Intelligence Unit.

Since January 2005 Ghana has moved towards adopting the common tariff structure for the Economic Community for West Africa States (ECOWAS). Progress has been slow, although, ultimately, this should simplify the importation of goods into Ghana. However, it is unlikely to resolve the problems of delays and corruption at the country’s ports, which are issues for both importers and exporters. These problems can be magnified if the goods are for trans-shipment to a country in the interior. Although most traditional methods of trade finance are acceptable when dealing with Ghanaian companies (notably, letters of credit and funds transfer), there have been incidents of fraud.

Ghana: A potential African leader in technology? Ghana’s mobile telecommunications sector is among the most developed in Africa, benefiting from deregulation in the late

The ITU already credits Ghanaians with having the deepest mobile Internet penetration in Africa, but there is still a long way to go; just 14% of Ghanaians were Internet users in 2011, up from 10% in 2010. Ghana enjoys some of the fastest Internet speeds in Africa, ahead of both Kenya and South Africa in 2012 according to US-based network testing company, Ookla, with an increasing number of ‘techpreneurs’ taking advantage of this situation. In March 2013 ambitious plans were announced for the construction of a new tech-hub in Ghana, dubbed Hope City. The US$10bn project aims to provide working and living space for up to 75,000 people. While we have doubts as to whether such an ambitious project will get off the ground, that it is being planned illustrates the optimism in this key sector of the economy.

SEPTEMBER 2013

GHANA BUSINESS & FINANCE

EIU REPORT

This should ensure that the government can maintain its spending commitments, while avoiding the temptation to scale up expenditure for reasons of political expediency.

CONFERENCES & EVENTS

2ND GHANA ECONOMIC OUTLOOK AND BUSINESS STRATEGY CONFERENCE (EOBS)

With the blessings of the Government of Ghana and the full participation of the President of the Republic, this conference creates a single one-of-a-kind platform for decision makers from both the public and private sectors of Ghana’s economy to meet and deliberate on the challenges facing the country’s economy and strategize on the way forward. Venue: Best Western Hotel, Accra Date: 20th November, 2013 Contact: Gloria (0302-240786)

7TH ANNUAL GLOBAL PROCUREMENT AND SUPPLY CHAIN MANAGEMENT FORUM FOR THE OIL & GAS INDUSTRY

This leading industry forum will address strategies to mitigate the impact of the oil price changes, as well as optimising the supplier-operator relationship and supply chain sustainability. Share best practices with leading global procurement and supply chain professionals; gain an insight into strategic sourcing strategies; mitigate risks in contract management; understand the impact of exploring new frontiers on procurement; and optimise the supplier-operator relationship. Venue: Novotel, Barcelona City, Spain Date: 25th-27th September, 2013 Contact: Visit www.marcusevansconferences-paneuropean.com to register

TELECOM OSS/BSS WORLD SUMMIT 2013

OSS/BSS World Summit 2013 is a worldclass, exclusive telecoms summit, for operations support systems and business support systems in telecoms. Based in London, it lays the roadmap for the year ahead in OSS BSS + telecom billing for mobile operators in telecommunications sector globally. Venue: Marriott London Grosvenor Square, London, UK Date: 26th-27th September, 2013 Contact: Visit www.ossbssworld.com to register

5TH WORLD CONFERENCE ON ECOLOGICAL RESTORATION

The SER2013 World Conference on Ecological Restoration: Reflections on the Past, Directions for the Future will bring together more than 1,200 delegates from around the world interested in the science and practice of ecological restoration as it relates to natural resource management, climate change responses, biodiversity conservation, local and indigenous communities, environmental policy and sustainable livelihoods. Venue: Madison Wisconsin, USA Date: 6th-11th October, 2013 Contact: Society for Ecological Restoration Email: info@ser2013.org

INTERNATIONAL RESEARCH CONFERENCE ON E-BUSINESS MANAGEMENT 2013 (IRCEBM’13)

International Research Conference on E-Business Management (IRCEBM) 2013 is a premier event in the field of EBusiness Management which includes, E- Business, E-Finance, E-Human Behaviour Management, E-Marketing & E-Tailing. IRCEBM 2013 is an international research conference and it is focused on exchanging the knowledge of e-business among researchers, developers, and practitioners. Venue: Holiday Inn Dubai Al Barsha, UAE Date: 25-26 September, 2013 Contact: Visit www.ircebm.com to register

30TH QUALITY OF SERVICE DEVELOPMENT GROUP (QSDG) MEETING ITU-T STUDY GROUP 12

This conference,targeted at players in the telecoms industry,is aimed at ensuring customer satisfaction in the industry. Venue: La Palm Royal Hotel,Accra Date: 16th-20th September, 2013 Contact: derek@telecomchamber.org, or umutoniyvonne@gmail.com

1ST GHANA DISASTER RISK REDUCTION CONFERENCE AND EXHIBITION

This will be the premier national platform to discuss ways of reducing human induced and natural disasters in Ghana. Venue: Accra International Conference Centre Date: 22nd October, 2013 Contact: Livingston (0244-050320) Email: ghanadisasterprevention2013@ gmail.com

THE GHANA SUMMIT

The Ghana Summit will openly explore the risks and opportunities - tensions and compromises - that are facing this thriving global African economy. It will bring together over 150 leaders from government, business and finance who are invested or otherwise interested in Ghana’s future. Venue: Movenpick Ambassador Hotel, Accra Date: 29th-30th October, 2013 Contact: Visit www.economist.com/ events-conferences to register

COMMONWEALTH BUSINESS FORUM 2013

The Commonwealth Business Forum (CBF) will take place with the Commonwealth Heads of Government Meeting (CHOGM). The Forum is the premier business event in the Commonwealth bringing together Heads of Government, Ministers, and top business leaders from around the world and will be attended by over a thousand delegates. Venue: Colombo, Sri Lanka Date: 12th-14th, November 2013 Contact: Visit www.cbcglobal.org/events to register

GHANA BUSINESS & FINANCE

SEPTEMBER 2013

FEATURE

Pension reform in Ghana The story so far by an insider (2) By Daniel Aidoo Mensah In the first of these incisive write-ups on the Pensions Reform in Ghana, the writer gave a general background to the Pensions Reform process. In this second article, he delves into the rationale for the introduction of the new Three-tier Pension Scheme. Rationale for the New Three-Tier Pension Scheme The main goal of every retirement income arrangement is to ensure that employees obtain a reasonably adequate level of retirement income. During the Pension Commission’s work the major issue in the submissions and memoranda received from organized labour, pensioners and public servants was the inadequacy of pensions and gratuities; in particular the cash lumpsum paid under the Social Security Scheme. This constituted a major source of grievance for public sector employees and pensioners. To recommend a new pension system that will ensure retirement income security for the Ghanaian worker, the Commission first examined the adequacy of existing pension schemes.

GH¢1, 000 and his monthly retirement income is GH¢650; we will say his income replacement ratio is 65%. At the global level, the resultant “net income replacement ratio” is rarely 100%. This is because it is expected that income needs in retirement are usually lower than when one is in regular employment, as expenses incurred on commuting to work, cost of meals away from home and on office attire are normally excluded. However, the universally agreed position is that “the target replacement rate” should be higher for low income workers than for high income workers, since the consumption of low income workers constitutes a higher percentage of their income. As a rough guide and taking into account work-related expenses (such as clothing and transportation), income tax deductions and social security contributions, approximately 60% to 80% of pre-retirement income is required by pensioners to ensure that they enjoy comparable standards of living as they had prior to retirement. The global standard for income replacement ratio is about 67%. The above notwithstanding, the Commission took cognisance of the fact that in the Ghanaian circumstance, the needs of the individual rather increase on retirement as a result of the demands emanating from our traditional norms and customs, i.e. family engagements, funeral attendance, family leadership and other social responsibilities. Additionally, in the absence of well-structured socio-economic systems, individuals on retirement need a certain quantum of money to provide facilities which ordinarily should have been made available to them during their working life, e.g. houses, vehicles, health insurance, etc. The Commission considered that the peculiarities of our socio cultural environmental demands make it necessary for the income replacement ratio to remain at a level which enables the retiree to meet the additional social responsibilities and concluded that any pension scheme for Ghana which ignores this social factor will fall short of pensioners’ expectations. An income replacement ratio above 67% was therefore recommended for the Ghanaian circumstance. Following the Commission’s in-depth analysis of the key issues and socio-cultural environment, it was concluded that existing pension schemes will not deliver benefits that will allow for adequate and sustainable income security.

Adequacy of Pension Benefits Adequacy is normally measured as the ratio of a worker’s retirement income to the level of his or her earnings just prior to retirement. The resultant ratio is termed “income replacement ratio”. For example, if a worker’s monthly salary just before retirement was

To improve benefits and ensure retirement income security for Ghanaian workers, therefore, the Commission proposed a threetier pension structure, comprising two mandatory schemes and a voluntary scheme. An adequacy test on the new 3-tier pension scheme indicates that the first and second tier mandatory schemes will give an income replacement ratio of between 74% and 79%.

SEPTEMBER 2013

GHANA BUSINESS & FINANCE

FEATURE

A voluntary contribution of 5% to the third tier voluntary scheme will give an additional replacement rate of between 20% and 25%. Overall, a worker who participates in the third voluntary scheme will end up with an income replacement rate of about 100%. Those who put in more than 5% contribution will end up with over 100% of their income replaced in retirement. This should be the goal of every worker in this country! Pension Reform Implementation Committee (PRIC) As mentioned earlier, the Presidential Commission on Pensions (The Bediako Commission) presented a 221-Final Report to the President in March 2006 which contained details of the its findings, analysis and recommendations for a sustainable pension scheme(s) which would ensure retirement income security for Ghanaian workers in both the public and private sector. Following consideration of that report, the Government issued a White Paper in July 2006, which accepted almost all of the Commission’s recommendations. The main recommendation of the Commission was the creation of a new Contributory three-tier pension system for Ghana comprising two mandatory schemes and a voluntary scheme. In October, 2006, the Government, appointed an 8 member Pension Reform Implementation Committee and a Consultant to on the new the pension system and pension reforms, There implement the recommendations of the Presidential Commission was general acceptance and positive perception of the new on Pensions approved by Government in its White Paper No. contributory three-tier system. 1/2006 of July 2006. The Implementation Committee was made up four original members of the Presidential Commission and One remarkable achievement was the four new members representing the ministries development of the National Pension of Finance, Public Sector Reforms, Manpower Reform Bill and Basic National Social and the Attorney General’s Department. The One remarkable Security Bill which were submitted to writer, who was a member of the Presidential achievement was Government in August 2007. It is pertinent Commission, was appointed the Consultant to note that two separate Bills were the development of to the Implementation Committee. submitted to Cabinet- the parent National Pension Reform Bill and the Basic National The Committee commenced work in the National Pension Social Security Bill which was a subsidiary November, 2006 and its major mandate was Reform Bill and legislation to the parent Bill. However, in to facilitate the drafting of a new Pension line with the Attorney General’s policy of Reform Bill that will give legal backing to Basic National Social consolidating legislation, the two Pensions the recommendations requiring the passage Bills were consolidated. of laws. The Committee was also mandated Security Bill which to provide guidance and direction on were submitted to The consolidated National Pension transitional matters, in both the public and private sectors that needed to be resolved Government in August Reform Bill was laid in Parliament by the then Minister of Finance, late Hon. Baah to ensure the smooth take-off of the new Wiredu. The Bill was eventually passed by pension scheme. This included restructuring 2007 Parliament into law in October, 2008. It of Social Security and National Insurance received Presidential assent on 4th December, 2008 and gazette Trust (SSNIT), a review of the SSNIT Law and decentralization notification on 12th December, 2008 as The National Pensions of CAP 30 Management. Finally, the Committee was to establish Act, 2008 (Act 766). the administrative structures of a Pension Regulatory Body which will prepare the legislative Instrument and oversee the The National Pensions Act, 2008 (Act 766) caters for the operation of the new Pension Reform Law; provide information establishment of a new contributory three-tier pension scheme and education program on the new Pension Reform Law; and with a National Pension Regulatory Authority to oversee the to undertake a comprehensive study to facilitate the setting-up efficient administration of the composite pension scheme. of special scheme(s) for the Informal Sector. Work of the Implementation Committee As part of the Implementation Plan, the PRIC established five (5) Sub-Committees based on strategic stakeholders interests and expertise to advise the Main Committee on specific areas in the Government White Paper. The Sub-committees were the Legal, SSNIT Restructuring, CAP 30 Restructuring, Administrative and Public Relations, and Informal Sector Sub-Committees. The Committee carried out a number of activities in 2007 including sensitisation and public education, especially for stakeholders

In the next article the writer will give an overview of the National Pensions Act, 2008(Act 766).

The writer is a former Ag. CEO of the National Pensions Regulatory Authority Managing and currently, a Consultant & CEO, Aidoo Mensah & Associates

GHANA BUSINESS & FINANCE

SEPTEMBER 2013

www.mtn.com.gh

Dial

*515# Unique offers just for you! MTN Just4u. Enjoy internet, airtime and SMS offers.

facebook.com/mtn.gh twitter.com/mtnghana

youtube.com/mtnghana

Welcome to the New World Scancom Ltd. A member of the MTN Group.

AGRICULTURE

Modernizing agriculture is the best catalyst for accelerated growth (1) by Ayuureyisiya Kapini Atafori

For Ghana, the rapid modernization of agriculture is non-negotiable. The country’s economic growth will be stunted when agriculture remains unmodernized. Without a modernization-driven agricultural programme that will engender a Green Revolution, Ghana will not be able to consolidate its gains to become a fully-fledged middle income country in the next decade. isheartening, it is, that the immediate past governments had paid lip-service to the modernization of agriculture. These governments toyed with agricultural modernization for political gains without concretely implementing policies that would really transform the country’s agricultural sector. There is still no meaningful change from the centuries-old cutlass-and-hoe type of agriculture which depends on traditional methods of crop farming, animal husbandry and fishing. Subsistence smallholder agriculture predominates while large-scale commercial farming is at the rudimentary stage as well poses a threat to the survival of peasants and small-scale farmers. Ghana’s politicians make the modernization of agriculture to appear as a luxury when they can easily revolutionize agriculture via the use of the latest machines. No need to underscore that the modernization of agriculture is a sine qua non for industrialization in the country. The Kuffour and the Mills-Mahama administrations had pledged to modernize agriculture in their respective policy statements. After the expiration of President John Agyekum Kuffuor’s two terms which started in 2001 and ended in 2008, nothing substantial could be shown to prove unarguably that the New Patriotic Party government had laid a good foundation for the transformation of agriculture. Modernization of agriculture was one of the main campaign promises of the National Democratic Congress (NDC) when the party’s presidential candidate, Professor John Atta Mills, was soliciting for votes from the electorate in 2008. But when given the nod to govern in 2009,

by the end of the first term of the NDC government in 2012, no serious sign of the modernization of agriculture was visible. Yet the advantages of the modernization of agriculture have not been lost on the NDC. The party’s manifesto for the 2012 elections underlines the importance of the modernization of agriculture: “The accelerated modernization of the agriculture sector is one of the major pillars in our economic transformation agenda, propelled by two main strategies - Food and Agricultural Sector Development Policy and the corresponding investment plan as detailed in the Medium-Term Agriculture Sector Investment Plan.” The key elements of the party’s promised agricultural strategy include transformation of the sector from a resource-based to a technology-based industry and the provision of subsidies for inputs. The government has put in place good policies to modernize agriculture. What is, however, worrying is the trend of nonimplementation, and the slow pace of implementation, of the projects and programs that seek to achieve the objectives of the laudable policies. Attempting to actualize its manifesto pledge, the NDC government has outlined plans to modernize agriculture in the 2013 budget. The strategies are, however, not far-reaching enough to lay the basis for the take off of the modernization of agriculture. Under the Accra Plains program, the government will begin work on a 11,000-hectares agricultural estate to facilitate sustainable

GHANA BUSINESS & FINANCE

SEPTEMBER 2013

It is good news that the Ghana Irrigation Development Authority (GIDA), through its CEO, Dr Ben Nyamadi, announced in late July 2013 that the GIDA would build low technology irrigation infrastructure in lowland areas of the the droughtprone and hunger-stricken three northern regions to harvest and manage rainwater for rice cultivation. The schemes will ensure all-year availability of water for agriculture and reduce the overdependence on rainfall for farming. According to a Daily Graphic report, Dr Nyamadi stated: “We are targeting 100,000 hectares of lowland areas.” He noted that Ghana was underutilizing its irrigation potentials due to low sectoral investments. “We have 1.9 million hectares of potential irrigable land and only 200,000 hectares, representing about five per cent, has been developed,” he observed. The creation of the Ministry of Fisheries and Aquaculture Development is to refocus more attention on the promotion of the fisheries sub-sector. According to the Fisheries and Aquaculture Sector Development Plan (2010–2015), aquaculture production is targeted to increase to 35,000 metric tons per annum in 2015. The budget intends that the government pursues an accelerated aquaculture development strategy to fill the gap in fish supply. Officialdom claims that improved aquaculture development packages such as feed and credit will be rolled out to farmers.

Further, the government undertakes to train farmers to increase fish pond productivity from 1.5 metric tons/ha to 2.5 metric tons/ha. Thus, doubling output from the current 20,000 metric tons to 40,000 metric tons within this The government plans to commence year. When that tonnage is produced, it “We have 1.9 million construction works on the Accra Plains means 5,000 metric tons more than the Irrigation Project covering an area of 11,000 hectares of potential 2015 target has been clocked in 2013. To hectares. A dam is to be constructed in achieve the goal, the government has a Mprumen. Three dams will be built in Koori, irrigable land and only social contract with the governed to equip Zuedem and Tankasa in the Builsa District 200,000 hectares, operators in the fishing industry with skills of the Upper East Region (UER). The Vea in sustainable fishing practices. Therefore, Irrigation Scheme in the UER, the Dawa representing about the government commits to continue with dam and 10 dams in the Volta and Greater the construction of the administration Accra regions will also be rehabilitated. The five per cent, has been block, hostels, laboratories and lecture government pledged to increase Agricultural developed” halls for the Fisheries College at Anomabo, Mechanization Service Centers (AMSECs) which is affiliated to University of Cape to cover at least 170 districts in order to provide services to Coast. farmers who cannot afford their own machines. In addition, the government says it will procure a thousand tractors, 100 maize planters, 50 seed drills, 50 boom sprayers, 10 maize/soya harvesters, 50 rice threshers, 100 shellers and 50 dryers to support the AMSECs, individual farmers and processors, among others. Government will also finance the construction and mechanization of 500 boreholes on farmer fields for irrigation, animal watering and agro-processing. With the advent of climate change and the resultant floods and droughts, no expert needs to tell the government and public officials responsible for the sector that massive irrigation is one of the best ways to modernize agriculture. A recent aide memoire of a project titled: “Enhancing the Adaption of Smallholder Farmers, especially Women, to Climate Change for Improved Agricultural Production in Ghana” undertaken by Alliance for Green Revolution in Africa (AGRA) and the Science and Technology Policy Research Institute in Ghana, has a profound opening: “Climate change and weather variability is having negative impacts on agricultural productivity in Ghana. The problem is exacerbated by policy gaps and low awareness levels both within government officials, policy makers, farmers and other stakeholders.”

But the question that begs itself is: How the powers-that-be will get the required wherewithal to implement this, and other project(s), to fruition, with the prevailing financial constraints? The inadequate availability of the inputs for the sub-sector have been a perennial challenge that the Minister for Fisheries and Aquaculture must tackle, if the government really wants to succeed in improving the sub-sector, and thereby increasing productivity, by collaborating with the relevant Ministries and agencies like Transport, MoFA and Fisheries Commission to steer the projects to completion. The production of a new smart strategic plan for fisheries and aquaculture is imperative.

SEPTEMBER 2013

GHANA BUSINESS & FINANCE

AGRICULTURE

agricultural production and provide employment. The budget promises that graduates from agriculture tertiary institutions will be encouraged to participate in the program. How the graduates will be encouraged has not been stated. “Government through the Ministry of Food and Agriculture [MoFA] will coordinate the procurement and distribution of 180,000mt subsidized fertilizer to farmers. In addition, web-based software for the smooth implementation and management of fertilizer and seed subsidy programme will be introduced,” Finance Minister Seth Terkper said in the budget statement in Parliament on March 5, 2013.

BANKING & FINANCE

BoG’s new capital requirement a move in the right direction? By Martin-Luther C. King

New banks entering Ghana’s banking industry now need a minimum capital of GHC 120 million Cedis to operate, up from the current GHC 60 million, said the Bank of Ghana (BoG).

Foreign banks that pre- dated the policy were given up to 31st he bank has also revised upwards new capital requirements for other financial institutions, December, 2009 to recapitalize whilst banks that were licensed including savings and loans companies which are after the announcement of the policy had to start with the new now being required to have GH¢ 15 million as their capitalization. All foreign banks that existed before the policy new minimum capital, up from the GH¢ 7 million; met their obligations at the completion point in 2009. Their indigenous counterparts similarly met the 2012 target date. rural and community banks have also had their base capital increased to GH¢ 300, 000 from GH¢ 150, 000. The increases are part of measures by the Bank of Ghana But despite these recapitalization (BoG) to consolidate the existing laws measures Ghanaian banks are yet to “no Ghanaian bank governing the country’s banking and nonfind a spot in the ranks of Africa’s biggest banks. For instance, no bank financial Institutions, said the bank’s made the awardee list Deputy Governor Millison Narh. They Ghanaian bank made the awardee of top banks in Africa at are also to ensure a strong financial system list of top banks in Africa at the last to support the real sector of the economy, the last African Bankers African Bankers Award held on the provide the institutions with the muscle sidelines of the annual meetings of the African Development Bank (AfDB) to undertake big-ticket deals to support Award held on the the growth of the private sector and to in Marrakech, Morocco in May this sidelines of the annual serve as a capital cushion for absorbing year. unexpected losses that may arise in the meetings of the African normal course of business.”We envisaged Twenty-one awards were at stake at Development Bank (AfDB) the awards that was dominated by that these initiatives would remove any potential vulnerabilities in the banking in Marrakech, Morocco in South African banks. From West landscape to ensure a safe and sound Africa, however, Nigeria’s Guarantee banking practices across the industry,” May this year.” Trust Bank (total assets US$9.874 said Narh. billion) scooped the prize for African Bank of the Year while the Best Bank Ostensibly driven by the desire to promote prudent management in West Africa went to First Bank (total assets of US$17.383 of banks in the country, the BoG had in 2007 started a bank billion), also of Nigeria; and, Ecobank Transnational, Togo got recapitalization policy which required universal banks operating the award for innovation in banking. in Ghana to recapitalize from GH¢7 million to GH¢ 60 million Ghana Commercial Bank came in as the 121st bank on the (approximately US$ 60 million at the time) by the end of 2012. Two roadmaps were set for the implementation of this continent with total assets of US$1.502 billion while Barclays new policy. All majority locally-owned banks were given up Bank of Ghana took the 133rd position with total assets of to December, 31, 2010 to achieve minimum capitalization of US$1.163 billion. GH¢ 25 million, and December, 31, 2012 to recapitalize fully. 46

GHANA BUSINESS & FINANCE

SEPTEMBER 2013

The IMF also called on the Ghanaian central banker to divest its financial stake in the banking sector and resolve as yet unnamed weak banks in the sector. While commending the central bank’s ongoing efforts to improve the banking system, the IMF insisted that the BoG’s role as a shareholder and a regulator created a conflict of interest and undermined its supervision of the industry. The BoG owns 48 percent of the Agricultural Development Bank and has a stake in the National Investment Bank as well. Though the BoG has created a trust to manage its portfolio, it still did not address the conflict of interest, according to the IMF. The Fund pointed out that while the economy’s growth momentum has continued into 2013, non-oil growth, which was 7.8 per cent last year, was likely to decelerate due to energy disruptions and high real interest rates. The high interest rates, which were initially engineered by the BoG to arrest the freefall of the cedi in the first half of 2012, have been sustained in 2013 by the re-emergence of a large fiscal deficit and rising public debt.

Dr. Henry Kofi Wampah, Governor, Bank of Ghana

Ghana’s 28 commercial banks, made up of eleven foreign and seventeen indigenous banks, are largely privately owned with just a few being controlled by government and other state institutions. Of that number, only seven are listed on the Ghana Stock Exchange (GSE), a reality the Bank of (BoG) is trying strenuously

Still the fund underscored the need for “decisive action to rebuild fiscal and external buffers and reduce public debt, and in particular stressed the importance of regaining control over the public wage bill”. But the BoG’s latest raise in banks’ capital requirement may yet be Ghana’s best chance not only to rebuild fiscal and external buffers but also to raise banks strong enough to effectively play in the country’s budding oil economy as well as have continental reach.

SEPTEMBER 2013

GHANA BUSINESS & FINANCE

BANKING & FINANCE

to change. But the central bank wants more of them to list on Even more revealing is the fact that total assets of the entire the GSE because a successful harnessing of the capital markets banking industry in Ghana stood at GH¢ 29.6 billion (about US$14.8 billion) at the end of April 2013, as against GH¢ 23.2 demands owners of businesses to have an attitudinal change, a billion in April 2012, according to the latest Monetary Policy desire to share ownership and the ability to think big, said the Committee report of the Bank of Ghana. central bank governor Dr. Henry Kofi Wampah. According to the report this was driven “Thinking big means entrepreneurs must look mainly by advances which accounted for 42.5 “...the IMF insisted beyond their immediate means and seek to tap per cent of the total assets. The asset growth that the BoG’s role into capital from the wider public. This call for was funded by deposits which recorded an a desire to share management and to be subject annual growth of 22.4 per cent to GH¢ 20.7 as a shareholder to public scrutiny”, adding that, “this message billion at the end of April 2013. is key to unlocking the potential of our capital and a regulator markets”. The figures reveal that Ghanaian banks are created a conflict not yet among the big players in African But the latest raise in minimum capital banking despite previous recapitalisation of interest and requirement may have come at the promptings programmes initiated by the Bank of Ghana undermined its of the International Monetary Fund (IMF) to strengthen the sector; and that, as a result, which last June had urged the Ghanaian central the local banking sector cannot also fund supervision of the bank to further raise banks’ minimum capital long-term, large-scale capital projects. requirements to absorb shocks in the industry. industry.” The IMF had “recommended higher minimum Truth is that until the local banks take a lead capital buffers to contain vulnerabilities, role in the oil and gas industry, the cocoa as well as the mining including the risk of increasing non-performing loans” in sectors which control the bulk of the economy, nothing much Ghana’s banking sector. could be achieved in terms of growth and development of the Ghanaian economy. While it praised the rapid growth and competition in the banking industry, the IMF nonetheless worried that high domestic interest rates, driven by excessive government borrowing, could curtail the economy’s growth momentum.

WORLD OUTLOOK

Core debt yields rise,

knocking emerging markets ising expectations the Federal Reserve will soon scale back its stimulus drove German and U.S. bond yields to multi-month highs and dealt a blow to emerging markets, with India’s rupee cartwheeling to historic lows. Minutes from the last Fed meeting could offer hints on when the U.S. central bank will taper its bond-buying and up-to-date sentiment indicators will help track momentum in the reviving euro zone. Gains in U.S. yields were not tracked by the dollar, which traded little changed against its currency basket. “What you are seeing at the moment in a way is central bankers versus the markets,” said ABN Amro economist Nick Kounis. “The markets are pushing up the rate (increase) expectations and central bankers have been trying to pour cold water on the moves, but it is proving more difficult against a background of stronger economic data.” German 10-year yields rose 3.6 basis points to 1.91 percent, having hit their highest since March 2012 at 1.924 percent at the open. Their U.S. counterparts hit fresh two-year highs of 2.871 percent. “(Bunds are still driven) by the recovery story,” said Marius Daheim, chief strategist at Bayerische Landesbank. “It looks like the next mark for Bund yields is this psychologically important 2 percent level.” Emerging Turbulence As rising core debt yields make it harder for developing nations to fund widening current account deficits, emerging markets - whose economies are heavily linked to U.S. fortunes and the dollar - took a spill. The Indian rupee slid as far as 62.50 per dollar, emphatically breaching the previous low of 62.03. The country’s share market NSEI lost 1.4 percent.The country’s central bank has tried to restrict how much Indian residents and companies can send offshore, but that only raised fears of outright capital controls that would further undermine the confidence of foreign investors”. The foreign investor community wants tangible and ambitious reforms that look and feel like a worthy

‘second generation’ to the fundamental measures adopted in the early 1990s,” Westpac analysts said in a note. There was turbulence elsewhere too. Indonesia’s rupiah shed 0.9 percent to four-year lows at 10,475 per dollar. The strain showed in MSCI’s broadest index of Asia-Pacific shares outside Japan. MIAPJ0000PUS which fell 0.5 percent. It had ended last week with gains of 1.45 percent, but that merely recovered ground lost during the previous two weeks. Crucial later in the week will be an early reading on Chinese manufacturing from HSBC. Recent data suggested the economy might be stabilizing and any improvement in the purchasing manager index will be welcomed by Asian investors. Gold on Roll Tokyo’s Nikkei share average N225 went its own way and rose 0.8 percent, brushing aside data showing the third-largest trade deficit on record as imports rose even faster than exports. Wall Street was expected to open little changed later. In the currency market the dollar gave up early, modest gains to stand at $1.3326 per euro. Against the yen it pulled back to 97.54, while the dollar index was a shade firmer at 81.287 DXY. The dollar has been in gradual decline for the past few weeks, in part on concerns the prospect of Fed tapering would scare foreign investors out of U.S. bonds. But at some point yields should reach levels that are attractive to investors. Hopes for a pick-up in growth globally have also supported commodities. Copper slid 0.7 percent to $7,359 a ton after hitting a 10-week peak of $7,420 recently. Gold and platinum have gained as well, though they could be threatened if the Fed does wind down its stimulus. Gold hit a fresh two-month high of $1,384.10 an ounce before dipping back to $1,374. Brent crude futures for October were little changed at $110.38 a barrel.

GHANA BUSINESS & FINANCE

SEPTEMBER 2013

WORLD OUTLOOK

FOOD PRICE WATCH: Prices continue to drop, but food subsidies a concern

domestic policy decisions among key food producers warrant close scrutiny. Domestic policies worth watching include public procurement policies, but also consumer price subsidies, which, far from being a thing of the past, continue to be used – even though subsidies often bring meager benefits to the poor, high fiscal costs, corruption episodes and unproven nutritional effects.

• Food prices remain high even after prices of internationally traded food decreased between February and June 2013, the third consecutive quarterly decline. • Higher production, declining imports “...long-held consensus and increasing stocks pushed down export prices. regarding consumer • Uncertain weather conditions and food subsidies, just as domestic policy decisions still warrant with electricity and fuel close monitoring going forward.

Recent decisions by the governments of India, Indonesia and Benin to extend consumer food subsidies indicate that such policies remain in vogue.

Between the 1950s and 1970s, developing countries used universal food subsidies as major components of their poverty alleviation strategies. Lately, rising food prices and recurring price spikes have revived the popularity of such subsidies, leading countries with high poverty and weak safety nets to make food available at below-market prices – for example by subsidizing imports or giving vulnerable groups access to food discount stores.

subsidies, is that when untargeted and poorly implemented, they are not effective in helping the poor.

Prices of internationally traded food declined for the third consecutive quarter since their historical peak in August of 2012. Increased production, declining imports and increasing stocks are exerting downward pressure on export prices, but international prices remain tight for maize. Prices remain high and with recent price increases in May and June, uncertainties surrounding unstable weather conditions and The World Bank’s Food Price Index

Yet, the long-held consensus regarding consumer food subsidies, just as with electricity and fuel subsidies, is that when untargeted and poorly implemented, they are not effective in helping the poor. They can also distort market prices and agricultural production, while leaving nations with a hefty fiscal bill. Data from the Middle East and North Africa, the region most dependent on generalized subsidies, illustrate the harmful equity and fiscal implications of consumer subsidies. According the International Monetary Fund estimates, only 35 percent of the amount spent on subsidies there reaches the bottom 40 percent of the population. Country-specific estimates also confirm that the share of benefits from food subsidies reaching the poor is a fraction of total benefits.

SEPTEMBER 2013

GHANA BUSINESS & FINANCE

ADVERTORIAL

DHL Express offers a helping hand

- creates access to SMEs to take advantage of global market opportunities by Josiah Spio-Garbrah DHL Express has reaffirmed its commitments to use Ghana as a strategic business hub within the Sub Saharan African Region as part of its continual expansion and strategic investment drive within its worldwide operations and has also expressed a high confidence level in the potential of the local small/ medium businesses in Ghana and across Africa to grow beyond their current markets. Briefing the media at a press conference in Accra, Charles Brewer, DHL Express Sub-Saharan Managing Director, announced that DHL Express is ready to facilitate and provide access for SME’s to take up business opportunities in the global market. Ghana’s favourable economic indices and its relatively matured stable political environment, together with the newly discovered crude oil resources makes it more attractive as a destination of choice to serve as a hub for DHL Express future expansion and activities across the Sub-Saharan Africa.

multimodal access to SMEs would be to motivate and equip them at no cost and shall be open to all categories of SMEs,” he stated. With a firm focus of building a talented workforce of leaders across the globe, DHL employs over 4000 across Africa and with about 110 in Ghana. Currently DHL Express has 76 retail outlets nationwide – which are expected to be increased to 100 by end of 2013. On his part, Kader Coulibaly, DHL Express Country Manager for Ghana, said “People are at the core of our business. It is through these motivated people that we will continue to add value to our customers and help create a sustainable and improving economy.

He said “Ghana is an attractive market for DHL and with a GDP rate of 7 per cent, the country presents a major opportunity. The opportunity is for us to expand our footprint within the country and service semi-urban and rural areas so that anyone - from students to a small businesses – can access our network in the over 220 countries and destination that we serve”. To help SME’s attain some level of sustainable growth and venture into in the global market space, DHL Express would in partnership with other key identifiable bodies and stakeholders like Governmental Agencies and Institutions, various Associations and NGOs within the country, offer technical training in information technology know-how, application of ICT skills and knowledge of global business opportunities. Brewer added, “There are hundreds of SMEs in Ghana and we need to provide easy access and a team of highly trained Certified International Specialist to lead them to the very obvious opportunities that trading with the world can present”. “This

L-R. Charles Brewer, Managing Director, Sub-Saharan Africa and Kader O. Coulibaly, Country Manager

GHANA BUSINESS & FINANCE

SEPTEMBER 2013

SME

As part of GB&F’s objective to promote the growth and expansion of Small and Medium scale Enterprises (SMEs) in Ghana,the magazine turns its lenses on a company with its story woven around the personality of a dedicated, hardworking woman, and whose survival and growth are attributed to the woman’s resolve to succeed.

Swimming against the tide

- one woman’s resolve to succeed against all the odds Whereas most women shy away from entering into politics or taking up leadership roles in society; others hatch excellent business ideas and these ideas stay on the drawing boards and only remain dreams. For most of these otherwise enterprising women,the fear of failure in the public office or in the business venture is not so much a problem to deal with as compared to the stereotypical hurdles and challenges as well as victimisation, posed by their chauvinist male counterparts that they have to contend with. Not for Bridget Markwei, the Chief Executive Officer (CEO) of Mibes Hospitality Travel and Tours, a very strong character who has had to deal with all the challenges of managing one of the best Travel and Tour companies in the country for the last twelve years.For her,she has had to learn life’s lessons the hard way as she had to deal with numerous male counterparts who, more often than not, tried to take advantage of her because of her gender. Mibes Hospitality Travel and Tours agency,has been consistent in providing quality tour services to its clientele and it is all because of the penchant to succeed by one woman. Bridget’s desire to succeed spurred her on to groom her company to its current state,even in the face of numerous ominous challenges she had to deal with.According to her, “Most of the challenges i encountered only strengthened me and propelled me on.” Services With a portfolio of clientele that includes some of the biggest names in Corporate Ghana, Mibes Hospitality Travel and Tour has made it a duty to provide excellent customised services to each of its clients.The company is accredited by the International Air Transport Association and provides services such as Air Protocol Services,Shuttle services,Travel management consultancy services,Visa processing facilitation,Customised Tour packages and a host of other services for anyone wishing to explore Ghana. Whilst the hospitable nature of Ghanaians has been used as a powerful tool to attract tourists into the country,it is worth noting that sometimes the hospitality of the locals or those within whose lands the tour attractions are located, are abused.People’s pleasures and curiosities are sometimes given premium over the preservation of the environment, and it is in this regards that Mibes Hospitality Travel and Tours stands out among the pack with their ‘Responsible Tourism’ package. With this service,not only are tourists sent to the various attractions around the

country to feast their eyes on the beauties of the land,but these tourists also embark on such responsible activities as greening the environment through tree planting activities, and helping cater for the social needs of the locals by making donations to schools and hospitals in these localities. Succeeding in the face of challenges When GB&F had the opportunity to sit with Bridget for a quick chat,it became clear that this was a woman on a mission to succeed.But success, as is common knowledge,does not come easy,and in a sector which brings in millions of dollars of foreign exchange into Ghana’s economy,but which receives a relatively less attention,Bridget had to brace herself up.Asked how the industry was faring,she retorted that “it was doing fine”,but she underscored the need for Government and the regulators of the tourism industry to to give some level of attention to the tourism industry as it brings in so much revenue for the country. According to Bridget, “Bad infrastructure and lack of access to some of the nation’s famous attractions” are but a few of the challenges that a tour company like hers have to deal with. In her view,other countries that are reaping so much from tourism put in a little investment for the benefits they are enjoying currently. She cites “Kenya and even Gambia,a relatively smaller country,are attracting thousands of tourists into their country because they have invested in the industry.” “Gambia has not got as ,much attractions as Ghana does,but yet tourist troop into that country in droves” she adds. Bridget believes that, driving tourists traffic into the country would also mean that the high visa charges plus the relatively high airfares would have to be looked at,as Ghana’s prevailing airfare regime seem high, relative to the what pertains in for instance, the West African Sub-region. Mibes in the Future Notwithstanding the hurdles Mibes Hospitality Travel and Tour has to deal with,the company has set its eyes on an even bigger future.The company intends acquiring its own fleet of vehicles and putting up accommodation facilities at tour attraction sites. Maybe that sounds a bit lofty for a tour company,but the strides made and the successes chalked by Bridget and her team show that with a little push and support in addition to serious policy interventions from Government,anything is achievable.

SEPTEMBER 2013

GHANA BUSINESS & FINANCE

FEATURE

Consumerism

Threat to Africa’s Development by Julius Caesar-Tokoli

nce tagged the Dark Continent mainly because of the mystery surrounding its hinterlands, Africa is now the ‘light’ of the world in many respects. For one thing, Africa, in spite of its being assaulted by colonialism and bad governance spanning centuries still has quite a sizeable amount of the world’s natural resource reserves, including precious minerals, oil and timber.

by 2020.”—Wikipedia. Further, according to Wikipedia, “A consumer class is also emerging in Africa and is expected to keep booming. Africa has around 90 million people with household incomes exceeding $5,000, meaning that they can direct more than half of their income towards discretionary spending rather than necessities. This number could reach a projected 128 million by 2020.”

Another thing is that political stability, more relative peace and more focused efforts at good economic management have made the continent more favourable for business, winning it the accolade the ‘Lion Markets’ by Mckinsey & Company; plus its population of about 1.1 billion makes it a very definitive market.

All this is good news and paints a positive outlook for the African continent. That notwithstanding, there are real dangers staring at the continent. And it would take good leadership to stave off these dangers. One of those veritable dangers is consumerism—a spirit which can negate the gains that will be achieved in economic development.

Regarding the economy of Sub-Saharan Africa, the IMF reports that, “Growth remained strong in the region in 2012, with regional GDP rates increasing in most countries (excluding Nigeria and South Africa). Projections point to a moderate, broad-based acceleration in growth to around 5½ percent in 2013-14, reflecting a gradually strengthening global economy and robust domestic demand. Investment in export-oriented sectors remains an important economic driver, and an agriculture rebound in drought-affected areas will also help growth. Uncertainties in the global economy are the main risk to the region’s outlook, but plausible adverse shocks would likely not have a large effect on the region’s overall performance.”

Blindly copying the West According to Merriam-Webster dictionary, consumerism is “the theory that an increasing consumption of goods is economically desirable; also: a preoccupation with and an inclination toward the buying of consumer goods”. It is this spirit of consumerism that evidently propelled the development of the West.

But most importantly the quality of Africa’s human resources keeps improving. “It is becoming a more educated labour force, with nearly half expected to have some secondary-level education

For instance consider the current global financial turmoil. It all came about as a result of excess consumption. Since the capitalist system projects materialism as success and links that to happiness, people are encouraged to spend. Those that do not have enough to spend are still at liberty to spend way beyond their earnings through credit cards. Mortgages allow people to live in palatial homes that they could otherwise hardly afford to build themselves. “Live tomorrow today” is the way of life. And through such consumerism, business is fueled and the economy

GHANA BUSINESS & FINANCE

SEPTEMBER 2013

Yet, significantly, since the developing world looks up to western hegemony for development, they are also falling into that same trend.

industry, commerce and the corporate world are able to eschew their own greed first and thus set the right example for the rest and really educate them effectively, much of the greed would be curtailed. It is only then that conservation can take root. Then, natural resources, instead of being greedily exploited to import more consumer goods would be preserved for the moderate use of future generations.

In Ghana for instance, many things that used to be considered as luxuries have become necessities. Examples are mobile phones, When Economics is redefined by Africa and greed is tampered, computers, home stereo systems, blenders, rice cookers, television while conservation and preservation are espoused and cultivated, sets and automobiles. Those that can’t immediately afford them that would have a positive impact on society. People would see are given loans to acquire them. At the end of the day, many their value and that of others not so much in what they possess salaried workers have found themselves but in who they really are. Thus there in a cycle of debts since they are living would be more meaningful relationships. tomorrow today. This has significantly “...is it development This would be reflected in 1) the family and placed a strain on families since spouses when there are plush 2) society as a whole. and parents have to work longer and harder. It has also led to dissatisfaction neighborhoods and In the family, spouses would not go after among employees, leading to industrial high rise buildings with so much material goods that would compel unrests and lower productivity. them to work harder and longer and strain beautifully paved roads their relationships. Parents would also Meanwhile, assess the use of these gadgets: make time for their children to train them but people can’t walk they all require electricity to function. To well, helping them to become responsible produce more energy, more fossil fuel about even in the day members of society. This would make the has to be burnt, we need more dams home more of a haven than a hotel. and all of these negatively impact on the without fear of crime?” environment. In society, people would become less stressed, less animalistic and thus friendlier. Behind consumerism For example, before the creation of the Akosombo Dam, the is the obnoxious evolutionary doctrine of survival of the fittest flow of the Volta River along with its current controlled the which tends to stir up the spirit of competition in people, an tide of the sea. With its creation the amount of water moving animalistic tendency. And this has led to people viewing each downstream has reduced, thus allowing the waves of the sea to other more as competitors than partners and friends. This is steadily erode the land, with an estimated 1/3 of the original found in business, in politics, in school and even in religion. township already submerged. Gradually, this is spreading to It breeds mistrust and mutual suspicion. A society that is rife affect yet other coastal areas such as Accra and Cape Coast—all with such traits, irrespective of its high GDP per capita cannot in the name of development. be said to be developed. At best, it is backward. At worst, it is barbaric. Thus as Africa craves to develop, it is important for leadership to re-define development. The kind of development of the west The redefinition of economics would also promote good health is pseudo-development. For example, is it development when which cannot be gained in consumerism. Today, the food we there are plush neighborhoods and high rise buildings with eat, animal and vegetable, is no longer healthful because of beautifully paved roads but people can’t walk about even in the chemicals that are used to produce them. The idea is to make day without fear of crime? Is it development when greenhouse them grow faster to feed a hungry population that does not gas is continually released into the atmosphere, causing global cultivate their own food. Further, due to stress, people tend to warming and the melting of arctic ice causing a rise in sea resort to junk food. This has led to the emergence of diseases levels? Is it development where people decide to communicate previously unknown; with either no cure or incurring expensive though gadgets instead of face-to-face? Is it development when medical bills. previously-cherished values and norms that provided a level of stability to society have been eroded and replaced by the ‘me Also, due to consumerism, we walk less than we used to first attitude’ and ‘everything is fine, judge no one’? So what is since we are always either riding in our own cars or on public true development? transportation. That has made many of us to adopt a sedentary lifestyle, leading to obesity with its associated high blood pressure, Redefine Economics diabetes and stroke. The basic step to take towards redefining development is to redefine economics itself. The problem of economics as is It may seem then that Africa is the ‘light’ for the world in the 21st upheld and which influences the extraction and application of century. That seems to paint a glowing picture. But the insidious resources has it as scarcity. But I have a difficulty with that. nature of western-style development is real. If not properly When I observe nature, I realize that we have more than enough managed, it would be the case of the proverbial blind leading to be content with life—there is enough water, enough land, the blind—both will fall into a ditch! And the result would be enough food—indeed more than enough of everything. Why catastrophic. I am not a pessimist. Nor am I a doomsayer. I am then are some poor and so can’t even afford food, yet others have only a realist. If you are too, you may see things even deeper than more than what they can eat? While it is true that factors such I do. It would only take good leadership to forestall calamity. as lack of knowledge, deprivation and laziness play a role, the But do we have such leaders? real culprit is greed. Greed has led to most of us, in the name of development, scrambling for more than what we need. And The Author is CEO/Managing Partner at Soleil Consults; that is basically what consumerism means. The real problem Management, Strategy & ICT Consultants of economics then is greed. If African leaders in government, (www.soleilvision.com).

SEPTEMBER 2013

GHANA BUSINESS & FINANCE

FEATURE

booms. But how long could that be sustained? And I wonder if the lessons have been learned.

MERGERS & ACQUISITIONS

Govt seeks strategic investors to revive trade fair Government is seeking strategic investors, both locally and foreign, to partner it to restore the deteriorating Trade Fair Centre in Accra to its former glory. According to the Director of Communication at the Ministry of Trade and Industry, Nana Akrasi Sarpong, the move forms part of the government’s Public Private Partnership programme. He was answering questions at a budget advocacy programme organised by the Institute of Financial and Economic Journalists (IFEJ) and supported by Star Ghana. “While the government awaits the strategic investor, the ministry has secured some US$5 million to kick-start some major rehabilitation works at the site in preparation for the hosting of the next ECOWAS Trade Fair later in the year,” he said. The Ghana Trade Fair Centre, the once magnificent edifice meant to host major local and international fairs has been left to rot, a situation which makes it unattractive and safe to host any major fair or exhibition. Built some five decades ago, the Centre, which is placed in the care of the Ghana Trade Fair Company under the Ministry of Trade and Industry, was meant to be a site to showcase the works of industrialists in the country as part of efforts to promote made-in-Ghana goods as well as serve as a platform for other countries, mostly from the subregion to exhibit their products and services to promote the sub regional integration agenda. The roofs of the main two main pavilions (A/B) right after the entrance of the Centre are virtually coming off making it virtually impossible to host any major event, particularly during the rainy season. Again, the wooden structures erected around those two pavilions to accommodate mainly small exhibitors

such as traders in handicraft and members of the National Board for Small Scale Industries (NBSSI) are also rotting off because of lack of painting to hold the structures together and prevent the attacks of termites among other things.

Dubai-based Abraaj sells stake in Ghana’s HFC Bank Dubai-based private equity firm, Abraaj Group has sold its stakes in HFC Bank Ghana, the company announced in late July, 2013. The Group sold the stake to the Republic Bank of Trinidad and Tobago who in December 2012 purchased 8.9% shares

in HFC Bank for an amount of $8 million. “The Group sold its stake in HFC to Republic Bank Limited,” Abraaj said in a statement without giving details of the transaction. The Abraaj Group, through one of its Funds, acquired an initial stake in HFC in 2010 and made an additional investment in 2012. “Our investment in HFC was well timed as we capitalized on the rapid growth in the banking sector in Ghana. With the support of the other stakeholders, the Bank executed a successful strategy which has attracted a lot of strategic interest. This created the opportunity for our successful exit. We believe that the new partnership being forged with RepBank will propel HFC to the next level of its growth,” Jacob Kholi, Partner, The Abraaj Group, commented on the deal. HFC Bank was formed in 1990, listing on the Ghana Stock Exchange in 1995.

Mergers and acquisitions to hit banks Following the Bank of Ghana’s decision to increase the minimum capital requirement of banks to 120 million Ghana Cedis, the banking industry could witness some mergers and acquisition this time around. First Deputy Governor, Millison Narh recently announced that new entrants into the banking industry will be required to have a stated capital of 120 million Ghana Cedis.

provide a leeway for the players in the banking industry to merge. The new requirement will see rural banks having a minimum capital of 300,000 Ghana Cedis, a 100 percent increment. Nonbank financial institutions would also shore up their capital from 7 million Ghana Cedis to 15 million Ghana Cedis.

However, the Central Bank is silent on the definite time for introducing the new requirement. No acquisition was witnessed when the Central Bank of Ghana shored up the capital of banks to 60 million Ghana Cedis in 2009. Experts believe the new guidelines for mergers and acquisition will

GHANA BUSINESS & FINANCE

SEPTEMBER 2013

connecting your world

Connecting Your World! Satellite ServiceS in Sub-Saharan africa: low-coSt vSat broadband internet acceSS, voiP telePhony and Secured connectivity. examples of applications are: • Corporate networks Connectivity • Money transfer (MtC) • Automatic telling Machines (AtM) • virtual Private networks (vPn)

www.satadsl.net

Carlton House Anumansa Street - Osu PMB KA43 Accra - Ghana sales@ecoband.net • +233-30-2775221 • +233-54-4334946

Countries Covered

MARKETS

Trading Results - GH Cedi Regular Market Data

(Trading results on the Ghana Stock Exchange at the end of business on 22nd August, 2013)

Session

ISIN

Share Code

Year Year Previous Opening Closing Price Closing Closing High Low Closing Price Price Change Bid Offer (GHS) (GHS) Price (GHS) VWAP (GHS) Price Price VWAP (GHS) (GHS) (GHS) (GHS)

Totoal Shares Traded

Last Transaction Price (GHS)

4062 GH0000000615 AADS 0.52 0.52 0.52 0.52 0.52 0.00 0.52

0 0.52

4062 GH0000000193

ACI 0.07 0.06 0.06 0.06 0.06 0.00

0 0.06

4062 GH0000000607

AGA 37.00 37.00 37.00 37.00 37.00 0.00

0 37.00

4062 GH0000000037 ALW 0.08 0.05 0.05 0.05 0.05 0.00 0.05

0 0.05

4062 GH000000000672 AYRTN 0.18 0.17 0.17 0.17 0.17 0.00

0 0.17

4062 GH000000000581 BOPP 3.97 1.40 3.77 3.77 3.78 0.01 3.77 1,100 3.78 4062 GH000000000649 CAL 1.17 0.37 1.16 1.16 1.16 0.00 1.16

800 1.16

4062 GH0000000573 CLYD 0.04 0.04 0.04 0.04 0.04 0.00

0 0.04

4062 GH0000000227 CMLT 0.16 0.14 0.16 0.16 0.16 0.00

0 0.16

4062 GH0000000540

CPC 0.02 0.01 0.02 0.02 0.02 0.00 0.01 0.02 50,000 0.02

4062 GH0000000680

EBG 4.92 3.00 4.40 4.40 4.40 0.00 4.40

4062 GH0000000060

EGL 2.02 0.48 1.72 1.72 1.71 -0.01 1.65 1.72 2,500 1.71

4062 GH0000000698

ETI 0.28 0.12 0.19 0.19 0.19 0.00 0.19 0.20 11,100 0.19

100 4.40

4062 GH0000000078 FML 6.00 3.55 6.11 6.11 6.15 0.04 6.10 6.15 200,000 6.15 4062 GH0000000094 GCB 5.40 2.10 5.32 5.32 5.32 0.00 5.32 5.35 8,000 5.32 4062 GH0000000102 GGBL 5.39 2.62 4.55 4.55 4.65 0.10 4.65 400,600 4.65 4062 GH0000001084

GLD 32.18 26.13 26.13 26.13 26.13 0.00

0 26.13

4062 GH0000000722 GOIL 1.50 0.62 0.84 0.84 0.84 0.00 0.83 0.84 9,700 0.84 4062 GH0000000748

GSR 2.75 2.75 2.75 2.75 2.75 0.00 2.70

0 2.75

4062 GH0000000631 GWEB 0.04 0.04 0.04 0.04 0.04 0.00 0.04

0 0.04

4062 GH0000000110 HFC 0.62 0.45 0.62 0.62 0.62 0.00 0.62 4,000 0.62 4062 GH0000000136 MLC 0.29 0.15 0.29 0.29 0.29 0.00 0.29

0 0.29

4062 GH0000000169

PBC 0.26 0.18 0.20 0.20 0.20 0.00 0.19 0.20 2,000 0.20

4062 GH0000000151

PKL 0.06 0.06 0.06 0.06 0.06 0.00

0 0.06

4062 GH0000000177

PZC 0.46 0.18 0.50 0.50 0.50 0.00 0.52

0 0.50

4062 GH0000000185

SCB 16.01 11.50 14.20 14.20 14.20 0.00 14.20

0 14.20

4062 GH0000000664 SCB PREF 0.52 0.52 0.52 0.52 0.52 0.00 0.52 4062 GH0000000730

0 0.52

SIC 0.51 0.34 0.40 0.40 0.40 0.00 0.37 0.40 915,100 0.40

4062 GH0000000201 SOGEGH 0.87 0.48 0.86 0.86 0.86 0.00 0.86 2,100 0.86 4062 GH0000000623

SPL 0.05 0.05 0.05 0.05 0.05 0.00 0.04 0.05

0 0.05

4062 GH0000000516 SWL 0.02 0.02 0.02 0.02 0.02 0.00

0 0.02

4062 GH0000000532

TBL 0.40 0.35 0.35 0.35 0.35 0.00 0.35

4062 GH0000001050

TLW 38.05 31.03 31.10 31.10 31.10 0.00 31.05

100 0.35 0 31.10

4062 GH0000000144 TOTAL 5.25 2.94 5.24 5.24 5.24 0.00 5.20 5.23

0 5.24

4062 GH0000000706 TRANSOL 0.04 0.04 0.04 0.04 0.04 0.00

0 0.04

4062 GH0000000219

UNIL 15.17 8.52 15.15 15.15 15.17 0.02 15.16

500 15.17

4062 GH0000000755 UTB 0.52 0.38 0.50 0.50 0.48 -0.02 0.48 21,100 0.48

GHANA BUSINESS & FINANCE

SEPTEMBER 2013

Director of Clinical Operations

Director, Energy Division

Location: Several Minimum Qualification:Bachelor’s Degree or experience commensurate with areas of responsibilities plus three to five years in management position (health care preferred)

(Ministry of Justice and Attorney-General’s Department). The Energy Division of the Attorney-General’s Department specialises in energy law, including the law relating to upstream and downstream petroleum activities and the supply and distribution of electricity

Contact: hrworldclinics@sanfordhealth.org Deadline:: 16th September

Medical Doctor Location: Cape Coast Minimum Qualification: MBChB from an approved medical training institute.Must have completed two years housemanship and in good standing with the GMDC. Fully licensed and registered Contact: hrworldclinics@sanfordhealth.org Deadline: 15th September

Mechanical Design Engineer Location: Accra Minimum Qualification: Bachelor in Engineering with a minimum of five years or relevant experience in mechanical systems

Location: Accra Minimum Qualification: The successful candidate must be a lawyer with not less than twelve (12) years standing at the Ghana Bar; and a minimum of five years practical experience in the practice of energy and or petroleum law or in working with an organisation, Ministry, Department or Agency dealing with energy and petroleum matters. Contact: 1c28@jbgh.me

Business Development Manager Location: Accra Minimum Qualification: First Degree from a reputable tertiary institution with work experience in related field Contact: recruitment@theejournal.com Deadline: 19th September, 2013

Contact: www.africanbaggrecruitment.com/current-jobs or call +233 (0) 302763980 / +233 (0) 302764078 Deadline: 20th September, 2013

Design, Monitoring and Evaluation Specialist Location: Accra Minimum Qualification: Degree in Planning,Development Studies, Agriculture,Natural Resources Management,Social Sciences or any relevant field. Contact: ghana@wvi.org Deadline: 9th September

Human Resource Manager Location: Accra Minimum Qualification:Degree Contact: 1c8f@jbgh.me Deadline: 30th September

SEPTEMBER 2013

GHANA BUSINESS & FINANCE

JOB OPENINGS

Job Openings