Business24 Newspaper 25th February 2022

NO. B24 / 309 | NEWS FOR BUSINESS LEADERS

FRIDAY, FEBRAURY 25, 2022

BUSINESS24.COM.GH

Covid-19 Fund Probe: Deputy Speaker plays down minority’s demand

Ghana to meet rice self-sufficiency by 2024

PG.3

NEWS DESK REPORT

IPPs get GH¢12bn in six years as gov’t clears over 50pct of debt

A

BY EUGENE DAVIS

Deputy Minister of Energy, William Owuraku Aidoo, has disclosed that government has so far cleared more than half of its debt owed to independent power producers (IPPs) within the last six years.

An estimated GH¢12bn has been disbursed to the private power investors and allied services providers including distributors of the commodity and bulk consumers, bringing down the outstanding debt to about US$750m, according to the deputy sector minister.

Appearing before Parliament to answer questions relating to his sector, Mr. Aidoo who represented the substantive minister said: “The payments were made to both the IPPs and fuel suppliers on behalf of ECG. A total of GHc12bn was paid to the IPPs whereas GHc4.3bn was paid to fuel suppliers as at end of second-quarter 2021.”

A further breakdown indicates that in

2016, an amount of GH¢343million was paid, for 2017 -GH¢1billion, in 2018 -GH¢1.9billion, GH¢2.7billion was paid in 2019, GH¢4.3billion was paid in 2020.

Independent power producers and bulk distributors in November 2020 threatened to withdraw their services, a situation that could have triggered power cuts, popularly called ‘dumsor’.

This was after it had sent a letter to the Ghana Grid Company Limited with the energy minister and the Electricity Company of Ghana in copy.

The letter to GRIDCo said the action has become necessary as it demands ECG and government to settle at least 80% of its indebtedness worth $1 billion, in a matter of urgency.

Meanwhile, the country’s energy sector debt may rise to US$12.5bn by 2023 if concrete steps are not taken to address the losses within the electricity sector.

Subscribers: In this rapidly changing business environment, make sure your digital account is activated so you can read the latest financial and business news.

Visit business24.com.gh/subcribe to activate your account.

The Ministry of Food and Agriculture (MoFA) has said Ghana’s rice selfsufficiency would be met by 2024 through the support of United Nations Industrial Development Organization (UNIDO) The UNIDO’s Technical Assistance Project will help address some of the short-term challenges impeding the smooth running of the post-harvest portion of the rice value chain.

The project is dubbed: “Improving the Technology and Quality Control System for Higher Addition in the PostHarvest processes of the Rice Value Chain.”

The Country still has some short-term challenges in both the rice seed and grain value chains, especially during the post-harvest stage in maintaining quality standards to make our domestic rice competitive.

Some of these challenges are inadequate processing, infrastructure and modern milling machines. Others are insufficient silos for storing paddy before milling, inadequate quality standard testing for both seed (paddy) and milled rice.

Mr. Yaw Frimpong Addo, a Deputy Minister of MoFA in-charge of Crops said the project would no doubt contribute to meeting rice self-sufficiency in the country by 2024.

The three-year project will strengthen the competencies of the value chain in MORE ON PG.3

Follow us online: business24gh

business24gh

business24gh

2

| EDITORIAL/NEWS

1

A timely boost to the domestic rice sector

U

Wash your hands 2

Cover your cough

FRIDAY, FEBRAURY 25, 2022

nited Nations Industrial Development Organization (UNIDO) has announced a partnership with Ghana’s food sector that will greatly improve the competitiveness and sustenance of the troubled local rice industry.

The project is dubbed: “Improving the Technology and Quality Control System for Higher Addition in the Post-Harvest processes of the Rice Value Chain.”

UNIDO’s technical assistance project will help address some of the short-term challenges impeding the smooth running of the post-harvest portion of the rice value chain.

The three-year project will strengthen the competencies of the value chain in order to catalyze the use of modern technologies, realise higher value creation and comply with market requirements.

The 3.6-million-dollar project would also build the capacity of value chain actors; mainly farmers, agro-traders, crop processors and public support institutions which will significantly revitalize the rice chain whilst improving the income levels and output.

There would be activities focusing on quality assurance, increased productivity and business competitiveness and supply

of equipment as well.

Ghana’s population growth, urbanization and change in consumer habits. Between 2008 and 2020, paddy rice production was in the range of 302,000 MT and 987,000 MT (181,000 to 622,000 MT of milled rice) with large annual fluctuations.

Over the years, the government had made a conscious effort to promote rice production to address food security and poverty reduction through national policies, strategies and initiatives as captured in Food and Agricultural Sector Development Policies I & II (FASDEP I & II), and its current implementation plan.

3

Ghana to meet rice self-sufficiency by 2024 continued from page 1

If you are sick, wear mask Brought to you by

LIMITED Copyright @ 2019 Business24 Limited. All Rights Reserved.

Your subscription along with the support of businesses that advertise in Business24 -- makes an investment in journalism that is essential to keep the business community in Ghana well-informed. We value your support and loyalty.

Contact: editor@business24.com.gh Newsroom: 030 296 5315 Advertising / Sales: +233 24 212 2742

order to catalyze the use of modern technologies, realise higher value creation and comply with market requirements.

The 3.6-million-dollar project would also build the capacity of value chain actors; mainly farmers, agro-traders, crop processors and public support institutions.

There would be activities focusing on quality assurance, increased productivity and business competitiveness and supply of equipment as well.

The project would take place in the Northern and Ashanti regions with funding from the Japanese Government with UNIDO and the Ministry as implementers.

Mr. Addo, recently said most rice projects and programmes implemented in Ghana focused more on the production end of the value chain at the expense of the post-harvest portion of the chain.

“This affects the competitiveness in terms of standards, quality and profitability of Ghana’s rice as opposed to the imported rice,” he added.

He said rice was an important strategic crop in the economy of Ghana, which was cultivated as both food and cash crop.

The deputy minister said rice consumption continued to increase due to population growth, urbanization and change in consumer habits.

Between 2008 and 2020, paddy rice production was in the range

of 302,000 MT and 987,000 MT (181,000 to 622,000 MT of milled rice) with large annual fluctuations.

He said the total rice consumption in 2020 amounted to about 1,450,000 MT, which was equivalent to per capita consumption of about 45.0kg per annum.

Mr. Addo said the country depended largely on imported rice to make up for the deficit in domestic rice supply, and its rice self-sufficiency ratio declined from 38 per cent in 1999 to 24 per cent in 2006 and increased to about 43 per cent in 2020.

The minister said it was based on the backdrop that more efforts were needed to make the domestic rice value chain competitive that would not only lead to contributing to the growth and structural transformation of the economy.

He said the UNIDO technical assistance Project has come at the right time to support the promotion of technological modernization and upgrade of the rice value chain to achieve higher production output, market value, and quality level.

Over the years, the government had made a conscious effort to promote rice production to address food security and poverty reduction through national policies, strategies and initiatives as captured in Food and Agricultural Sector Development Policies I & II (FASDEP I & II), and its current implementation plan.

He said the government, through its current flagship programme “Planting for Food and Jobs” (PFJ)

campaign, which takes its roots from “Investing for Food and Jobs”, has rice as one of the focus crops which is being promoted.

The overall objective of the campaign being implemented by the MoFA was to provide enough food and employment to the jobless.

It is also to ensure that the campaign succeeds, the programme is anchored on five pillars: the provision of subsidized improved seeds to farmers, supply of subsidized fertilizers to farmers, provision of dedicated extension services, marketing strategy to mop up produce and the infusion of electronic platform in undertaking all activities in food and agriculture (e-Agriculture).

“All intervention efforts are concentrated on these five pillars an approach that is new, inclusive and holistic,” he added.

To place emphasis on the importance of rice in the national economy, the government also introduced the Special Rice Initiative which sought to bring improved rice seeds to farmers at the district level.

He said the project had come at the right time to support the promotion of technological modernization and upgrade of the rice value chain to achieve higher production output, market value, and quality level.

The minister said the rice sector has particularly been given top priority through engagement with International, Regional and National partners to boost domestic rice production.

FRIDAY, FEBRAURY 25, 2022

3

| NEWS

Covid-19 Fund Probe: Deputy Speaker plays down minority’s demand

BY EUGENE DAVIS

The Minority Caucus’ call for a probe into government’s Covid-19 expenditure has been revoked by the First Deputy Speaker of Parliament, Joseph Osei Owusu.

The call which came in the form of a private members’ motion on the floor of Parliament was seeking to probe COVID-19 expenditure.

According to the First Deputy Speaker, the work of such a bipartisan committee is already provided for by the Constitution, to be conducted by the Auditor General and the Public Accounts Committee (PAC).

“All the committees of the house including the Public Accounts Committee are bipartisan, and the Public Accounts Committee is designed by nature to be chaired by members of the Minority.

In all its forms, the Public Accounts Committee, if it is minded to investigate anything related to the Covid-19 expenditure, fully sees to the authority and power to investigate that, particularly because all the accounting of it has been provided for in the budget which budget has been provided by the House and is before the

committee. My view is that this motion ought not to have been admitted, and it’s improperly before the House,” he ruled.

Bad precedent However, Minority Leader Haruna Iddrisu, in a press conference after the ruling told journalists that a bad precedent has been set by that ruling.

“With the precedence that is being set, I worry for the future of our parliament; I worry for the future of any parliamentary committee tomorrow that will be seeking under Article 103(3) of the 1992 Constitution to enquire into any matter of public interest,” argued.

He indicated that the minority are only demanding transparency and accountability in the utilization of covid resources and “we are telling the Ghanaian public that neither the Minister of Finance nor the ministers responsible for sectors including the health minister have adequately accounted for the expenditure of covid resources.”

According to the minority the GH¢2.5bn announced in the 2022 budget as expenditure over the 2021 period, is yet to be accounted for.

Respect due process Deputy Majority Leader, Alexander Afenyo-Markin, said the position of the caucus is that by the imperatives of the constitution and specifically article 187, it is the duty of the Auditor-General.

He said: “We are not against accountability and transparency but we are saying that we must respect due process as enshrined in the constitution by the framers of the constitution.

We must allow the auditorgeneral to complete its work, the report will be the property of parliament, when the report comes, we have the Public Accounts Committee that will have the opportunity to look at the report.”

He added that with the advent of the Ghana Integrated Financial Management System (GIFMIS), government cannot take public funds “spend and hide those funds”.

The Speaker of Parliament, Alban Bagbin, had early on admitted the motion from three members of the minority caucus for an inquiry into the expenditure made by the government since the outbreak of the COVID-19 pandemic in 2020.

The Minority Leader, Haruna Iddrisu; the Minority Chief Whip, Mohammed Muntaka Mubarak; and the Ranking Member on the Finance Committee, Dr. Cassiel Ato-Forson, filed the motion which sought to constitute a bi-partisan parliamentary committee chaired by a member of the minority to probe COVID-19 expenditure.

The Minority in Parliament had also previously petitioned the Auditor-General to audit government expenditure on food, and water government supplied to the vulnerable during the threeweek COVID-19 partial lockdown period.

That petition invoked Section 16 of the Audit Service Act, 2000 (Act 584) and called on the AuditorGeneral to undertake a Special Audit into the expenditure on the GH¢280.3 million allocated for the provision of food and water under the Coronavirus Alleviation Program (CAP).

It was jointly signed by the Ranking Member on Finance, Cassiel Ato Forson, and Minority Chief Whip, Muntaka Mubarak, who indicated that the audit they anticipate will clear all doubts about how the funds were utilised.

76pct of global investors poised to grow their African investments, report says Global investors are set to see a significant increase in their African investments, with 76percent either studying the markets, preparing for entry or readying to deploy additional investments into the continent.

This is according to the “World to Africa” report, an industry-wide study conducted by Standard Bank Group and the ValueExchange, in cooperation with the Bank of New York Mellon, Africa Venture Capital Association (AVCA), South African Venture Capital Association (SAVCA), Global Custodian and MiDA. Investing in Africa is already a core activity for almost half of all global investors, particularly those in Europe. A further 36percent of global investors are readying themselves to enter African markets – either through planned market entries or account activation in the region – highlighting the growing appeal of African markets to overseas investors.

The fact that this development is driven mostly by long-term, institutional investors is evidence that this growth is strategic more

than opportunistic.

Although volumes of Africa-bound investments are yet to return to pre-pandemic levels, the study reveals that 34percent of investors plan to increase their investments into Africa in 2022 – creating a major injection of liquidity into key markets.

Whilst the majority of investors are focusing on South Africa, Nigeria and Kenya for these increased flows, sub-Saharan markets such as Botswana, Zambia and Namibia look set to benefit from growing investor confidence.

ESG and Fintech seen as major drivers.

Projected investment returns from African markets are the key drivers for foreign investment flows, but the appeal of Africa as an ESG-friendly destination is also driving increased interest.

European investors and those from the Asia-Pacific region, who see ESG as the second-most important driver of Africa flows today, lead the way in this trend.

“This survey draws on views from over 220 institutions to give a uniquely comprehensive view of the drivers, challenges and triggers

that Global Portfolio Investors face when looking at African markets.

Ghana’s capital market is steadily developing and increasingly playing a pivotal role in attracting long-term capital for financing economic activities,” said William Sowah, Head, Investor Services, Stanbic Bank Ghana.

He added that: “To continue on the upward trajectory, stakeholders from the industry need to collaborate to discover new horizons that will deliver prospects for Ghana’s capital market. The survey findings awaken our market to the need to focus on removing liquidity impediments and hasten the pace of reforms.”

These investments are being directed into Africa’s rapidly growing technology and fintech sectors. Whilst portfolio investors are focused on govt bonds and a basket of technology, infrastructure and natural resource stocks, the appeal of fintech as the main target for all profiles of investment is clear – particularly for large North American investors seeking global diversification.

FX liquidity a core challenge Despite the increased attention on Africa, not all global investors are ready to turn to the continent.

41percent of new investors to Africa (and 27percent of existing Africainvestors) see the current state of the continent’s foreign exchange regimes as being a core obstacle to investing.

The research is clear that global investors will be strongly drawn toward countries that take action to drive local market reforms to increase and stabilise liquidity in the near future.

“The results of this research proves that the continent is full of investment opportunities that will drive Africa’s growth, and the global investment community has recognised this and is ready to realise Africa’s potential,” says Chaitanya.

4

| NEWS

FRIDAY, FEBRAURY 25, 2022

Shea butter market value to cross $2,408.7m By 2030

T

he shea butter market size is expected to reach $2,408.70 million by 2030, registering a CAGR of 14.1% from 2021 to 2030.

Shea butter is extracted from the nuts of the shea tree. It is offwhite or ivory color. Shea trees are native to West Africa, and most shea butter still comes from that region. Nigeria, Mali, Burkina Faso, Ghana, Côte d’Ivoire, Benin and Togo are top shea nut producing countries. Shea butter has gained significant share in the cosmetic industry and is expected to sustain its share throughout the forecast period.

This is majorly attributed to enormous benefits offered to skin such as it is safe for all types of skin, moisturizing effects, antiinflammatory and it promotes strong antioxidant activity.

The market for shea butter is likely to grow at a significant rate, owing to their increasing consumption of plant-based food products through cheese and meat. US is the largest shea butter market in North America due to increase in demand from millennial and surge in marketing activities. In addition, improved distribution channels also drive the growth of the product market in North America.

Changes in lifestyle & food habits and increase in purchase power has boosted the demand for plant-based plant based ingredients and food products, which in turn, accelerate the growth of the market. Availability of healthier substitutes and lack storage and transport facility has been hampering the growth of the shea butter market.

The shea butter market segmented into type, application and region. On the basis of type, the market is categorized into raw & unrefined and refined & ultra-refined.

By application, market is categorized into, food and cosmetics. Region wise, it is analyzed across North America (the U.S., Canada, and Mexico), Europe (Germany, France, UK, Italy, Spain and Rest of Europe), Asia-Pacific (China, India, Japan, South Korea, Australia, ASEAN and Rest of Asia-Pacific), and LAMEA (Latin America, Middle East and Africa).

On the basis of type, the refined & ultra-refined segment is estimated to reach $622.6 million by 2030 at a CAGR of 16.3%.

Refined & ultra-refined segment has gained 21.3% share of the shea butter market.

Refined & ultra-refined she butter is majorly used in cosmetic and pharmaceutical industry. The

ingredient allantoin contained in shea butter has an antiinflammatory effect. Therefore, it can provide relief for dry skin prone to eczema and skin diseases such as neurodermatitis or psoriasis. It also helps to level out scars.

It is commonly used in the skin care market, as it is said to diminish the appearance of lines and wrinkles as well as aids in softening the skin and lightning the complexion, thereby making it an ideal solution for dry, damaged skin. Thus, multiple benefits offered by refined & ultra-refined shea butter notably contribute toward the growth of the global market.

According to the Shea butter industry trends, on the basis of application, the cosmetics segment is estimated to reach

$464.0 million by 2030 at a CAGR of 16.4%. Oleic acid, stearic acid and linoleic acid are some of the main components of the shea butter. Its moisturizing and healing properties prove beneficial for many skin issues.

It also has anti-inflammatory and antimicrobial properties that can be used to treat many ailments. Growing awareness regarding the benefits of shea butter through cosmetics is likely to propel the growth of the product market during the forecast period.

Region wise, Asia Pacific shea butter market is expected to witness highest growth at a CAGR of 16.4% during the forecast period. The Asia-Pacific vegan cheese market is estimated to register the CAGR of 16.9% during the forecast period, owing to

rise in demand for plant-based food product and growing vegan &flexitatrian population.

Moreover, the adoption of western lifestyle and rise in disposable income are anticipated to drive the growth of the market.

Plant-based food ingredients including shea butter is majorly preferred by the millennial population, owing benefits such as it improves the health of digestive system so human body can absorb the nutrients from food that support immune system and reduce inflammation.

Thus, the demand for plant-based food products is increasing in the emerging economies including China, India, and Indonesia and is further adding to the growth of the Asia-Pacific shea butter market demand during the forecast period.

FRIDAY, FEBRAURY 25, 2022

5

| NEWS

World Bank Group launches US$4.5 billion new country partnership framework for Ghana The World Bank Group’s (WBG) Board of Executive Directors has discussed a new five-year Country Partnership Framework (CPF) for Ghana for 2022 to 2026.

The CPF prioritises investments in human capital, job creation, economic diversification, building a resilient health system, and fostering a greener and more inclusive society.

Ghana has achieved considerable economic and social progress in the past 30 years. It achieved middleincome status in 2011 because of strong, sustained economic growth, averaging over 5 percent since the early 1990s.

This was supported by a stable democracy and driven largely by gold and cocoa exports and the development of substantial oil and gas reserves. It achieved the first Millennium Development Goal (MDG) of halving poverty from 52.7 percent (1993) to 23.4 percent (2016).

However, the pace of poverty reduction has slowed in recent years, and inequalities in some areas continue, particularly in some northern areas of the country.

The CPF is expected to support Ghana in its COVID-19 and mediumterm development agenda. It is designed around three mutually reinforcing focus areas, namely

Enhancing Conditions for Private Sector Development and Quality Job Creation; Improving Inclusive Service Delivery; and Promoting Resilient and Sustainable Development.

Exploiting the opportunities of digital transformation will be a cross-cutting theme. The $4.5 billion CPF was prepared jointly by the World Bank, the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA).

“The World Bank Group is happy to support Ghana’s economic recovery plan. The CPF is aligned with Ghana’s Coordinated Programme of Economic and Social Development Policies and will support the Government of Ghana in creating a competitive environment for the private sector to flourish and play a greater role in job creation particularly for youth,” said Pierre Laporte, World Bank Country Director for Ghana, Liberia and Sierra Leone. “The World Bank Group, through the CPF, will also support policies and programs that aim to strengthen digital transformation for improved service delivery and productivity, improve governance, and promote greater inclusion, including strengthening women’s economic empowerment.”

“To stimulate diversified private sector growth and create secure jobs, the World Bank Group will support a competitive environment for enterprise development,” said Kyle Kelhofer, IFC Senior Country Manager for Benin, Ghana, Liberia, Sierra Leone, and Togo.

“IFC will continue to work closely with the Government of Ghana and the private sector to provide investment and advisory services to

expand access to finance for small businesses and entrepreneurs, enhance agribusiness productivity, and support Ghana’s sustainable industrialization.”

“The CPF focuses on improving the investment climate and enacting regulatory reforms.

Succeeding in these reforms would be critical for accelerating private sector development,” said Merli Baroudi, MIGA’s Director of Economics and Sustainability.

Beryl Archer appointed Ghana EXIM Deputy CEO President Nana Addo Dankwa Akufo-Addo has appointed Ms Rosemary Beryl Archer as Deputy Chief Executive Officer (CEO) of the Ghana Export and Import (EXIM) Bank in charge of Banking/ Business.

A statement from the bank said until her appointment, the new Deputy CEO was the Head of Small and Medium Enterprises (SMEs) in the bank.

The appointment was contained in a letter signed by the Chief of Staff, Mrs Akosua Frema OseiOpare. It is in line with Ghana Export-Import Bank Act, 2016 (Act 911).

“Pursuant to Section 18(1) of Act 911, the President has appointed you to act as the Deputy Chief Executive – Business/Banking – of the bank, pending receipt of the constitutionally required advice of the governing board of the bank, given in consultation with the Public Services Commission,” portions of the letter dated January 4 stated.

The statement said she hailed from the Western Region and had more than 20 years’

experience in banking, media and telecommunications.

“Within the 16 years of her banking experience, she has assumed various roles, including those at corporate and institutional banking, retail, SME, business development, treasury, credit and recoveries and export development in several local banks, including the Universal Merchant Bank ( UMB), Access Bank ( formerly Intercontinental Bank), and Fidelity Bank.

“She is currently heading the SME Banking Department at GEXIM where she has been instrumental in advancing key initiatives to position SME businesses as a useful platform to facilitate the industrial transformation agenda of the government. In 2020, GEXIM’s ‘Tuesday Market,’ an initiative she spearheaded to promote made-in-Ghana products locally and internationally, received the Chartered Institute of Marketing, Ghana (CIMG) President’s Special Award,” the statement said.

Partnerships It added that as Head of International Cooperation at

GEXIM, Ms Archer was key to the completion of memoranda of understanding (MoUs) with peer international development banks such as US Exim, India Exim, Indonesia Exim, Hungary, Thai and Slovenia Exim banks.

It said those relationships and partnerships occasioned new access to funding and knowledge transfer.

“In addition to these, her tenure as Head of International Cooperation occasioned the appointment of the CEO of GEXIM

to the high office of President of the Global Network of Exim Banks and Development Finance Institutions,” the statement said.

It added that Ms Archer was expected to bring her banking experience and extensive familiarity with the organisation and its objectives to bear in the new role.

She is a product of three academic institutions, including Holy Child School, the University of Ghana and the University of Bedfordshire in the United Kingdom (UK).

6

FRIDAY, FEBRAURY 25, 2022

FRIDAY, FEBRAURY 25, 2022

7

| NEWS

Komenda Sugar Factory to begin production by April – President Akufo-Addo The President of the Republic, Nana Addo Dankwa AkufoAddo has given the assurance to traditional leaders of Komenda that the Komenda Sugar Factory will begin production by April this year based on report received from the technical team on site.

“The Indian contractors and the technical people in charge, will complete the remaining civil works by the end of March. Consequently, all outstanding works will be completed by April for proper production to begin,” President Akufo-Addo told a delegation from the Komenda Traditional Council during a courtesy call on him at the Jubilee House in Accra on Wednesday, 23 February 2022.

The delegation, which was led by the acting president of the council Nana Twafohene was to brief the president on preparations being made towards the performance of the final funeral rites of Nana Kru, Omanhene and former President of the Council.

“This sugar factory has become a very prominent issue. We all heard some people say they have completed it, yet there was no sugar to show for it. It’s been a

back-and-forth issue. Now, we all can attest to the fact that it has now been set on a progressive path, therefore we can all hope that by April, the technical operators will tick all the boxes for production to begin,” President Akufo-Addo stated.

President Akufo-Addo said measures have been put in place to ensure that the factory will always have raw materials to function.

“I am reliably informed that negotiations are underway for a 20,000 acre sugarcane plantation at Wassa -Fiase to feed the factory, as the initial 5000 acres have been massively encroached upon with portions of same allocated for the construction of a university, and the individual farmer production from the out-growers,” Nana AkufoAddo said.

For his part, the Twafohene of the Komenda Traditional Council, was full of gratitude to the President for responding rapidly to the requests they put before him when he visited the area in 2019.

He indicated that following the requests by the late chief, the government has after completion of the new Sea Defense project

also constructed a 200-capacity Landing Beach and a concrete bridge linking British Komenda and Dutch Komenda.

It will be recalled that, the President revealed that a strategic investor, Park Agrotech Ghana Limited, had been selected as the preferred strategic investor for the Komenda Sugar Factory, and their recommendation was approved by cabinet.

However, negotiations between the Transaction Advisor (Price Water House) and the Strategic Investor have been unduly prolonged due to a number of

demands made by the Strategic Investor, as well as the effects of the emergence of COVID-19 Pandemic, which restricted consultations between the investor and the Transaction Advisor.

The President indicated that the services of the Technical Partner with expertise in the sugar industry has been engaged to manage the technical operations of the factory.

In addition, traditional authorities in Komenda and the adjoining districts have been engaged to acquire large tracts of land for sugarcane plantation.

Vodka and chocolate: A match-made for Ghanaians as Smirnoff Chocolate showcases a ‘Chocolatey Experience’ Some Ghanaian influencers have been cherry-picked and gifted personalized boxes of goodies from Smirnoff Chocolate in its ‘Chocolatey Experience’ campaign.

‘The Chocolatey Experience’ is earmarked to celebrate the rich Ghanaian chocolate flavour that has been infused with worldclass vodka to create Smirnoff Chocolate. For many Vodka lovers, a combination of Vodka and Chocolate may sound a bit puzzling, but a treat of Smirnoff Chocolate on the rocks or in a cocktail will leave your taste buds dancing.

Smirnoff Chocolate was outdoored recently by Guinness Ghana to create a feeling of indigenousness among Ghanaians.

Ghana, being the second-largest producer of cocoa in the world, Guinness Ghana took up the progressive step to innovatively blend the international vodka Smirnoff, with chocolate flavour which in true Smirnoff fashion, inspires Ghanaians to step up and break from the norm.

TikTok and Instagram sensations such as Asantewaa, Yankey Himself,

Ama Burland, Erica Emefa, and a host of others received gift boxes of the ‘Chocolatey Experience’ containing a bottle of Smirnoff Chocolate Vodka, Smirnoff infused chocolate, branded party cups, a mini-Bluetooth speaker, a branded pen drive and a cocktail recipe. Enough for a party with the ‘Homies’. Smirnoff Chocolate is best enjoyed when shared. It

exudes authenticity and a sense of Ghanaian pride. It is the gentle reminder that even in not very good times, we can take a break, let our hair down and take a sip of something that is made for us.

A drink that gives hope to cocoa farmers. A drink that unites us at any gathering. A very affordable drink retailing at GHS 35 only.

Wherever you are, whenever you

think of home, and something that you could drink to remind you of your true self as a Ghanaian, think of Smirnoff Chocolate. It is the new taste of Ghana.

Smirnoff Chocolate Vodka is not suitable for pregnant women and persons below 18 years of age. Remember to always drink responsibly.

8

| NEWS

FRIDAY, FEBRAURY 25, 2022

Pension: Inevitable future often ignored

I

n the early stages of life, we are mostly fascinated by what we want to become in the future and for that reason, we turn to focus more attention on doing things that lead us to achieve the very future we often dream to have.

While we make conscious efforts to pursue our dreams, we completely ignore or fail to consider the inevitable life we will have after achieving and living our dreams.

Life after retirement: Yes, Pension! That’s what I am referring to.

Most people do not even hear about or discuss pension (talk less of planning for it) until perhaps they are few years to retirement.

Parents, in the early stages of life of their children, are more concerned about the professional and vocational ambitions of those children than anything else, and for that matter, many children grow into adulthood with no knowledge of pension.

More worrying is the fact that the education curricula for all the academic levels in Ghana do not have space for pension or retirement issues and, therefore, when most people leave the university and find jobs for the very first time, they become completely oblivious of pension issues associated with employment despite their future implications.

Act In Ghana, persons aged 15 and above are permitted by the National Pension Act, 2008 (Act766), as amended, to be gainfully employed by any company.

A company, after engaging a person, is mandated by law to pay 18.5 per cent of the person’s basic salary as contributions to Tiers One and Two Pension schemes, of which that person is a member.

Notwithstanding the fact that the aforementioned is common knowledge and widely known, many workers do not take them seriously.

Some workers actually become aware of their employers’ continuous failure to pay their pension contributions until late, when they are about to retire, and are confronted with the reality of having to survive without a job.

Even though pension arrangements in Ghana are backed by laws which incidentally

make it compulsory for every worker to be covered for pension under Tiers One and Two, that does not in, any form or shape, relieve workers from the responsibility of planning towards a decent retirement.

Regrettably, many workers have assumed the mandatory Tiers One and Two pension contributions to be sufficient and, for that reason, they do very little (in some cases nothing) about issues concerning pension.

It is very true that the Tiers One and Two pension schemes will provide income on retirement, but the million-dollar question that ought to be asked is, will it be adequate to meet all your needs during pension?

I believe this can be answered if we look deeply within ourselves and reassess our future aspirations and needs.

Pension Pension is a delicate matter and obviously the most critical aspect of our life, but oftentimes it is relegated to the bottom of our priorities.

Life during retirement is supposed to be one of the best moments on earth, yet many pensioners have been killed by poverty before their time and others are enduring hardship mainly because they completely

ignored the inevitable future of pension and failed to plan accordingly.

My uncle told me many years ago that “it was irrational for anyone to set aside money while working to cater for pension needs” because, in his opinion, the death of that person will make another “enjoy” the money that has been set aside.

Unfortunately for him, he is still full of life at 70 and currently depends on the support of family members to survive. I guess no one wants to have the kind of future my uncle has now.

In so far as we do not set any date for our respective deaths, we ought to know that pension is an inevitable stage in life that will certainly come up at some point in time.

No one will give us better life on pension.

Whatever we desire to become on pension depends on the decisions and the choices we make today.

Take your pension seriously and do not live your future to chance.

The writer is Senior Manager, Standards & Compliance, National Pensions Regulatory Authority (NPRA). E-mail: frank.anderson@ npra.gov.gh

FRIDAY, FEBRAURY 25, 2022

9

| NEWS

Code Management brings million-dollar knowledge to entrepreneurs According to the “The Better Africa” report the failure rate for startups on the African was at 54.20% on average, with Ghana (73.91%) and Nigeria (61.05%) with some of the highest While there are multiple contributing factors to why businesses fail, companies like Code Management Group (CMG) are working to bridge the knowledge and funding gap for This past weekend, investment speakers series event featuring William Adoasi, CEO of luxury watch brand, Vitae London, and moderated by Dentaa Amoateng, CEO of Ghana UK The experience was an intimate conversation between moderator, Dentaa, William and the audience, where Adoasi answered questions and vulnerably shared business lessons and mindset-shifting William urged African entrepreneurs to consider collaboration and intention whilst building their businesses. When discussing team building, he advised that teams should be built with intention, sharing that he his team around his weakest areas. He also encouraged startups to work together instead of

position themselves for business opportunities on the continent. entrepreneurs are the solution to the future of the continent.

A 2021 white paper released by the Bank recommended that “entrepreneurship must be at Ghana, like the rest of Africa, is ready for a huge transformation that depends on collaboration.

The African Export–Import (Afrexim) Bank in a 2020 report revealed that Africa’s recovery not been as resilient as that of the Western and Asian economies.

However, it is believed that a vibrant entrepreneurship ecosystem could enhance the Advising on business growth, William shared that “he’d rather have a smaller percentage of a bigger pie than have a larger percentage of a small pie.” This is one-way entrepreneurs can think about scaling their companies, he added.

Vitae London is a publicly owned company with shareholders and runs on a social enterprise business format, where a portion of a sale of each watch contributes to educating a child in Sub-Saharan Africa.

Entrepreneurs from Ghana and Nigeria, industry stakeholders

and diaspora returnees packed out the space and got to interact with both Dentaa and William throughout the evening.

When asked what he thinks the future of Ghana will look like, Adoasi professed, “There are cities yet to be birthed”, urging startups to take their solutions seriously and to make their mistakes their biggest strengths and not see them as a failure.

Africa is the future of markets.

According to the United Nations, by 2050, 25% of the world’s population will be in Africa; a proof that local businesses will be a key part of the continent’s For start-ups to be better positioned, Adoasi expressed, “Data is key,” encouraging African entrepreneurs to literally go to market to understand the

environment, the customers and their desires. This process generates valuable data that can foster true business development, Adoasi stressed.

Vitae’s social entrepreneurship format is an example of how African businesses can meet the The event series is one of in Ghana and will continue its roll out throughout the year. On March 5, 2022, CMG will begin its inaugural four-month incubator in partnership with the Chinese Europe International Business School in Accra, Ghana and then Lagos, Nigeria. The incubator will focus on building start-ups into investment ready companies, in opportunities for start-ups and international investors.

Access Bank appoints 1st female Executive Director Access Bank Ghana Plc. has appointed Pearl Nkrumah as its Executive Director in charge of the bank’s retail and digital operations.

By her appointment, Ms Executive Director of the bank.

Ms Nkrumah, whose February 2022, will also join the nine-member Access Bank Ghana Board.

A release from the bank announcing the appointment indicated that she brings a wealth of banking experience to the board, with over 23 years’ practice in various capacities in multinational banks, with footprints across This, the bank believes, would help it in achieving retail

to becoming the world’s most respected African Bank.

Speaking on the new appointment, the Managing Director of Access Bank Ghana, Mr Olumide Olatunji, expressed optimism about the bank’s prospects.

“Pearl’s appointment is good for our bank. Her rich experience will spur our bank on to achieving retail dominance, a key area of focus to realising our vision of becoming the world’s most respected African bank,” he noted.

Mr Olatunji said her appointment Bank’s commitment to gender equity and its interest in women initiatives.

Prior to joining Access Bank, Ms

Nkrumah was the Head of Main Market and Ecosystems at Stanbic Bank, Ghana.

Under her leadership, the bank recorded outstanding growth and contributed to building the blueprint and structure for inclusive and mass market business.

She is credited with setting up the Youth Banking Desk at Stanbic Bank Ghana, an innovation aimed inclusion.

Ms Nkrumah holds a Bachelor of Science (BSc) in Business Administration (Marketing) and a Master’s in Business Administration (MBA) from the University of Ghana.

She also holds a Bachelor of Laws degree (LLB) from the Ghana

Institute of Management and Public Administration (GIMPA).

10

| F E AT U R E

GEOPOLITICIZED INDUSTRIAL POLICY WON’T WORK

BY OTAVIANO CANUTO, JUSTIN YIFU LIN, PEPE ZHANG

P

andemic-induced supply shortages have heightened national security concerns in advanced economies.

Worried about overdependence on Chinese manufacturing, the United States, the European Union, and Japan have each proposed initiatives to relocate production. And they are not alone. The geopoliticization of the trade-industry-security nexus is gaining momentum in the developing world as well. From the Western Balkans to Latin America, governments see a major post-COVID economic opportunity in reshoring and nearshoring production.

But such ambitions may prove too optimistic.

Despite the declining prevalence of just-in-time manufacturing, Chinese exports appear to have strengthened two years into the pandemic, owing to relative supply-side resilience and a shift (perhaps temporary) in global demand from services to goods. Moreover, early indications suggest that much of Latin America, for example, has yet to outcompete China or other Asian exporters in the US market, despite the region’s potential as a site for nearshoring during COVID-19 and the reduction or even reversal of China’s labor cost advantages over Mexico and Brazil.

Reconfiguring supply chains turns out to be more complex than initially believed. Undoing three decades of international production patterns – which have particularly benefited Asia – will take more than just favorable geography, partial cost savings, or oneoff political and economic incentives.

For starters, governments hoping to reshore and nearshore production must get back to economic basics.

Without sustained improvement in domestic fundamentals – including macroeconomic stability, regulatory and legal certainty and simplicity, physical infrastructure, education and skills, productivity and innovation, and export promotion and facilitation – investors’ interest will be modest and short-lived. Effective public institutions and policies are vital to safeguarding these fundamentals.

Second, governments must be realistic and precise in picking “winners,” relying on careful assessments of existing or latent comparative advantages. Recklessly supporting

unviable companies risks distorting domestic and international competition and crowding out private-sector investors. It also carries a significant opportunity cost, given today’s budget constraints, particularly in many low- and middle-income countries (LMICs).

An outsize focus on import-substitution industrialization, as in Latin America in the third quarter of the twentieth century, is more likely to result in inefficient resource allocation than long-term success.

Third, regional integration remains a powerful tool for galvanizing trade and broader economic competitiveness, openness, and standard setting. Consider the ASEANled Regional Comprehensive Economic Partnership, which entered into force this year.

Not only is the RCEP now the world’s largest trade bloc, encompassing nearly one-third of global GDP; it also represents an important milestone toward harmonizing the “spaghetti bowl” of free-trade agreements in Asia.

Similarly, by reducing tariff and nontariff barriers and allowing for other complementary policy reforms, the year-old African Continental Free Trade Area (AfCFTA) could lift 30 million Africans out of extreme poverty by 2035. Globally, demand for closer economic integration and coordination beyond trade – through “deep trade agreements” that harmonize investment protection, labor and environmental standards, and property rights, and through initiatives like the G7’s global minimum corporate income tax – will continue to rise.

Fourth, in addition to drawing on valuable lessons from the “old” industrial-policy playbook, governments should pay close attention to new opportunities and challenges.

For example, while digitization of cross-border

FRIDAY, FEBRAURY 25, 2022

trade (specifically in software and business processes) is lowering entry barriers and reducing the costs of scaling for entire export sectors, increased environmental awareness and new compliance standards (such as the EU’s carbon border adjustment mechanism) will push manufacturers to become greencompetitive.

Finally, and relatedly, forward-looking policymaking will require answering some tough questions beyond politics and geopolitics. In the short and medium term, is reshoring or nearshoring really the big opportunity that some experts claim, or should governments focus on other priorities? In the longer term, what type of industrialization and trade policy will be most beneficial and future-proof?

For advanced economies, a major challenge lies in overcoming what Adam Posen calls the “nostalgia or fetishization of manufacturing jobs.” Traditional manufacturing jobs are politically important, yet their share of overall employment in high-income countries is unlikely to grow. Reskilling and upskilling therefore are needed to smooth out the eventual labor-market adjustments. Highly sensitive sectors such as semiconductors and pharmaceuticals may be among the few that could meaningfully benefit from reshoring – a process that involves many case-by-case tradeoffs between cost and resilience.

As for LMICs, labor-cost advantages, enhanced infrastructure, and the shortening of global value chains should generate opportunities over time, especially as China shifts toward more sophisticated, higher valueadded production. Yet the extent to which LMICs can transform these opportunities into real investment and export gains will depend on getting the fundamentals right. There may be considerable variation across countries, regions, and stages of development. Robotics and automation also could pose a challenge by moving some production processes back to developed countries.

Another key question for LMICs is whether the manufacturing-based, labor-intensive, export-led growth model that worked for the Asian Tigers will remain sufficiently effective for others 20 or more years from now. In this heated debate, skeptics argue that as the contributions to global growth from trade stall or diminish, export-based growth policies may need to be reconsidered.

But even the skeptics would agree with three underlying assessments: a wholesale changeover is unlikely to occur overnight; industrial upgrading and productivity growth – in goods or services – will remain essential; and even for manufacturers exclusively serving a domestic market (or that are unlikely to become exporters), productive linkages with downstream suppliers or upstream partners will not completely disappear.

Looking ahead, these considerations, not the geopoliticization of supply chains, should shape governments’ interests and priorities in industrial policy. In a contradictory context of worsening fiscal positions and rising subsidies around the world, clear-eyed policymaking and precisely targeted, performance-based support is needed more than ever, especially in bootstrapping LMICs. Hopes of reshoring and nearshoring – and a wider revitalization of national industries or exports – are more attainable in countries committed to the fundamentals, and less so in those using supply-chain overhauls as a political talking point. There are no shortcuts to economic development.

| AFRICAN BUSINESS

FRIDAY, FEBRAURY 25, 2022

11

Afri-Plastics Challenge reveals wealth of African innovation

A

project in Nigeria that turns plastic pollution into designer textiles and accessories, buyback schemes to help women and young people earn money through recycling, and a project that turns plastic waste into school benches in Rwanda are finalists in the running to win £1 million in the first strand of the Afri-Plastics Challenge.

Other innovations in contention for the Accelerating Growth strand of the Afri-Plastics Challenge are: • Mega Gas Alternative Energy in Kenya which uses a thermal cracking process to convert plastic trash into clean cooking gas for people living on less than a dollar a day; • A scalable community recycling programme from Chaint Afrique Academy on the shores of Lake Volta in Ghana to prevent waste entering the marine ecosystem, and; • The Full Development Agency in the city of Bukavu, DR Congo, creating building materials from plastic waste to improve the urban environment.

Honourable Harjit Sajjan, Minister of International Development, Government of Canada said: “I look forward to see how each of the finalists’ projects develop and grow in the year ahead. As custodians of the longest coastline in the world, our responsibility to the health of the oceans does not stop at the edge of Canada’s waters. The global marine ecosystem is complex and deeply interconnected - plastic pollution in sub-Saharan Africa has global consequences once it enters lakes, rivers and the ocean.

The 15 inspiring finalists of the Afri-Plastics Challenge: Accelerating Growth strand are leading the way in successfully tackling the enormous quantities of plastic pollution being produced across Africa through ingenious and community-focussed projects that have great potential to scale across the continent and beyond.”

These finalists have been selected from 30 semi-finalist teams announced in November 2021.

Each has already received grants of £10,000 to grow their ideas and demonstrate their scalability in advance of judging. The 15 finalists will now receive a further £100,000 each to advance their solutions to plastic waste management.

Three winners will be announced

in March 2023 – first place will be awarded £1 million, second place will be awarded £750,000 and third place will be awarded £500,000.

Strand Two Semi-Finalists Announced The Afri-Plastics Challenge is tackling the scourge of plastic pollution in sub-Saharan Africa on multiple fronts, with three active strands rewarding innovators: ●Strand 1 – Accelerating Growth –15 finalists announced today - is rewarding innovative solutions to managing plastic waste after it has been used and discarded (i.e., downstream solutions). ●Strand 2 – Creating Solutions – 25 semi-finalists announced today – is rewarding innovative solutions to reducing the volume of plastic in packaging and other products before it is used (i.e., upstream solutions). ●Strand 3 – Promoting Change – launched in December 2021 – is seeking creative campaigns and projects to influence behaviour change among individuals and communities to promote sustainable consumption around plastic.

In addition to the 15 finalists in the Accelerating Growth strand, the Afri-Plastics Challenge has selected the 25 semi-finalists in the Creating Solutions strand.

Each semi-finalist will be supported with a £25,000 grant and additional expert support

to develop and validate their solutions. From these semifinalists, 10 finalists will be selected in June 2022. Finally in January 2023, three winners will be chosen, with first place being awarded a further £750,000, second place awarded £250,000 and third place awarded £100,000.

Solutions through to the semifinals of Strand 2 come from across sub-Saharan Africa, with many developing plant- and naturebased alternatives to plastics in everything from food packaging to construction materials. Several semi-finalists are developing sustainable and plastic-free sanitary products for women and others are working on safe drinking water alternatives that don’t rely on single-use plastic bottles.

Matthew Haden, Founder, The Recycler Tanzania and Afri-Plastics Challenge judge said: “The world needs to significantly reduce the quantities of plastic that are used in products and packaging if it is to hold back the tidal wave of plastic pollution that is wrecking environments on land and in water.

Today’s semi-finalists are at the cutting-edge of innovation in subSaharan Africa, creating the homegrown solutions that empower communities to stem the growing problem of plastic waste, and delivering business solutions that have the export potential to cross borders and make a difference to people around the world.”

To find out more about the 15

Accelerating Growth finalists and the 25 Creating Solutions semi-finalists and to follow their progress, visit afri-plastics. challenges.org Nesta is an innovation foundation. For us, innovation means turning bold ideas into reality and changing lives for the better. We use our expertise, skills and funding in areas where there are big challenges facing society.

We’ve spent over 20 years working out the best ways to make change happen through research and experimenting, and we’ve applied that to our work in innovation policy, health, education, government innovation and the creative economy and arts.

Within Nesta, Nesta Challenges, based in London, in the United Kingdom, exists to design and run challenge prizes that help solve pressing problems that lack solutions. We shine a spotlight where it matters and incentivise people to solve these issues. We are independent supporters of change to help communities thrive and inspire the best placed, most diverse groups of people around the world to take action.

We support the boldest and bravest ideas to become real and seed long term change to advance society and build a better future for everyone. We are part of the innovation foundation, Nesta. We are challengers. We are innovators.

We are game changers.

12

| NEWS

FRIDAY, FEBRAURY 25, 2022

Total Petroleum shows love to MAHLEF Foundation and Village of Hope As part of the Company’s Corporate Social Responsibility, the Staff of Total Petroleum Ghana PLC embarked on an annual charity donation exercise at MAHLEF (Mama Happy Life Enhancement Foundation) located at Tema-Manhean on 14th of February 2022.

MAHLEF is a Non-profit Christian Humanitarian Organization that targets teenage mothers and children to support them in their medical expenses, feeding, education and their overall wellbeing.

Teenage mothers are also trained in bead-making, knitting, catering and sewing to enable them acquire some vocational skills.

On behalf of the Staff and Management of Total Petroleum Ghana PLC, a cheque of Twenty Thousand Ghana Cedis (GHC 20,000) was presented to the

Foundation.

Additionally, several items including bags of rice, gallons of oil, boxes of canned tomatoes, sugar, detergents, toiletries amongst worth Five Thousand Ghana Cedis (GHC 5,000) were also presented.

The objective is to help cater for the day-to-day management of the Foundation.

The Executive Director of Mahlef, Madam Happy Crentsil expressed her sincere gratitude for the kind gesture and promised to use the cash and items to cater for the wellbeing and development of these young mothers and less privileged children within the community.

Similarly, on the 16th of February 2022 a delegation from the Company embarked on another donation exercise to Village of Hope located at Gomoa Fetteh in the Central Region.

A cheque worth Twenty Thousand

Ghana Cedis (GHC20,000) was presented to The Village of Hope on behalf of Management and Staff of Total Petroleum Ghana PLC. The Company also donated bags of rice, gallons of oil, boxes of canned tomatoes paste, sugar, detergents, and toiletries, totaling Five Thousand Ghana Cedis (GHC 5,000). This donation was to help support the Foundation in its dayto-day operations.

Upon receiving the items, Mr. Kweku Sarkodie, the Deputy Group MD, informed the team that the foundation will be celebrating its 26th anniversary in February this year and that they currently have 44 students at university, 40 in Senior High School (Boarding), and 96 children in the Basic School on their premises. The Basic School, he added, is open to the public at a fee. They also have a health facility that provides

services the orphanage as well as numerous nearby communities.

He expressed his heartfelt gratitude for the thoughtful gesture and promised to use the funds and materials to support the well-being and development of the underprivileged children being catered for in the Village.

Plan for transition to renewables– Bawumia to stakeholders The costs associated with the continued use of fossil fuels as a driver of the economy are high now and may go even higher, and it is important that Ghana, as well as her neighbours and the rest of the developing world urgently put in place comprehensive, viable plans to cater for the transition from fossil fuels to renewables, Vice President Bawumia has stated.

The Vice President, who issued the clarion call on Tuesday, February 22, 2022, said the effects of global warming, primarily caused by the emission of greenhouse gases through the use of fossil fuels, are becoming increasingly evident, with the costs to humanity becoming increasingly prohibitive.

It is therefore imperative, he maintains, to take actions to slow down climate change and put in place measures to address the costs associated with it as soon as practicable, including costs arising from the transition from the use of fossil fuels to renewables.

Dr Bawumia made the call when he addressed the opening ceremony for a National Energy Transition Forum organized by the Ministry of Energy in collaboration with the Ministries of Transport, Finance, and Environment, Science, Technology and Innovation in Accra. It is under the theme ‘Moving Ghana Towards A NetZero Future.’

“It is estimated that the way in which we produce and use

energy accounts for more than 80% of the total greenhouse gas emissions. Although we still need the energy to improve our economy, it has become imperative that we reduce emissions from production and the use of energy by replacing high emitting fuels, particularly fossils with sustainable fuels, such as renewables.

“We all have to aware that this transition is going to take place over the next 30 years, but the costs of that transition are being felt today. There is less and less funding available for oil exploration and exploitation, and we are seeing this in an increase in oil prices globally.

We in the developing countries are facing these very high costs of petroleum prices, and that is resulting in many economic impacts such as inflation as prices of goods increase in response to the increase in petroleum prices.

“There are many who have said that the petroleum price increase is going to remain at the high levels; we are not going to see any major declines. How do we as developing countries like Ghana adjust to this new reality, if it becomes a new normal of high oil prices and its impact on the macro variables in our respective economies? It is very clear that we need a plan,” he emphasized.

For starters, Ghana must seek to increase its natural gasbased electricity generation, Dr Bawumia indicated, explaining that the country will harness the use of her gas resources

by expanding gas pipelines to key demand centers across the country and increase access to LPG for cooking in households.

“We shall increase the share of modern renewable energy (wind, solar, Waste to Energy, Small/ Medium hydropower, hydrogen, etc.) in the national energy mix.

Government shall also take steps to promote clean energy sources including biofuels, Compressed Natural Gas (CNG), Electric, Hydrogen fuels, etc. as fuels for vehicles and provide low-carbon and highly competitive energy supply to establish Ghana as an energy and e-mobility hub for the West African Sub-Region.”

ECOWAS To make Ghana’s transition even more effective, Vice President Bawumia proposed an ECOWASwide consultation and planning, given Ghana’s leading role in the provision of electricity and the similarity in dynamics in the subregion.

“Our sub-region has similar challenges; and as a leader

in the provision of energy to our neighbours any transition strategies adopted by Ghana will have an effect on our subregional neighbours.

“I am therefore encouraging the Ministry of Energy to extend these consultations to our regional stakeholders to incorporate the risks and opportunities the transition offers us as a group.

“It is also perhaps important for ECOWAS to begin to consult on the need for a sub-regional energy transition plan based on our individual countries’ plans. As chairman of ECOWAS, President Nana Addo Dankwa Akufo-Addo will champion this initiative of ensuring that the West African sub-regional area makes the best out of the global energy transition.”

The Minister for Energy, Hon Dr Mathew Opoku Prempeh, disclosed that five other fora will be held across the country to solicit the views of all stakeholders to ensure a nationally-inclusive transition plan.

FRIDAY, FEBRAURY 25, 2022

13

| TRADE

Africa’s Unfinished Trade Agenda

BY HIPPOLYTE FOFACK

T

he African Continental Free Trade Area (AfCFTA), which entered into force on January 1 last year, promises to accelerate the diversification of the region’s economies and reduce the impact of commodity-price cycles on growth. Whereas Africa’s external trade is dominated by primary commodities and natural resources, the first shipment under the AfCFTA – from Ghana to South Africa – comprised manufactured goods of the sort that largely drive intraAfrican trade.

Many therefore hope that the AfCFTA – by creating a single market of 55 countries with a total population of more than 1.3 billion and a combined GDP of $3.4 trillion – will catalyze industrialization as firms take advantage of economies of scale to spread the risk of investing in smaller markets. To that end, the trade agreement will eliminate tariffs on 90% of goods (the ultimate goal is 97% liberalization).

The AfCFTA will likely boost foreign direct investment across Africa – empirical evidence elsewhere shows that joining a freetrade area could increase it by around a quarter – and shift its emphasis from natural resources toward labor-intensive manufacturing industries. Moreover, the pact has the potential to transform African economies, significantly increase the continent’s share of global trade, and strengthen its bargaining power in international trade negotiations.

But while many have touted the AfCFTA as a game changer for Africa, trade liberalization alone will not necessarily guarantee economic success.

To be sure, the agreement has rightly attracted much attention in academic and policy circles.

The World Bank, the International Monetary Fund, the United Nations Conference on Trade and Development, and the African Export–Import Bank have all compiled extensive studies on the AfCFTA’s potential impact. And the Journal of African Trade recently published a special issue on “The AfCFTA and African Trade,” which I co-edited with Andrew Mold of the UN Economic Commission for Africa.

All these analyses point to the agreement’s significant and positive impact on economic development.

Specifically, the empirical results according to computable general equilibrium models – which allow for trade-diverting and tradecreating effects of tariffs and non-tariff shocks by exploiting countries’ comparative advantage and price adjustments – are highly encouraging.

Aggregate headline estimates derived from these models show that the AfCFTA would increase Africa’s GDP by 0.5% after full implementation in 2045, relative to a scenario without continental trade integration.

Real wages would increase for both skilled and unskilled workers, and especially for the latter, suggesting a shift toward more inclusive growth. The World Bank estimates that the AfCFTA could lift 30 million people out of extreme poverty and around 68 million out of moderate poverty by 2035, with women benefiting more than men. Trade integration could also have a significant impact at the household and corporate level: Combined consumer and business spending is projected to reach $6.7 trillion by 2030.

Trade within Africa is expected to grow strongly under the AfCFTA, with intracontinental exports increasing by 34% (equivalent to around $133 billion annually) compared to a scenario without the agreement. Moreover, around two-thirds of intra-African trade gains will likely be realized in the manufacturing sector – historically the most effective elevator out of poverty. This would set the stage for a welfare-enhancing and mutually reinforcing relationship between intraregional trade and industrialization, resulting in sustainable growth of well-paid manufacturing jobs while broadening countries’ tax bases and improving their external accounts.

But substantial non-tariff barriers, regulatory differences, and divergent sanitary, phytosanitary, and technical standards increase the costs of cross-border trade within Africa by an estimated 14.3%, well above the average tariff of 6.9%. Removing these constraints and deepening the integration of African businesses into global value chains will significantly boost intra-African trade and drive growth. The World Bank estimates that full implementation of the AfCFTA could raise Africa’s real income by 7% (about $450 billion) by 2035, with trade facilitation measures to

cut red tape and simplify customs procedures responsible for $292 billion of this increase.

Overcoming Africa’s chronic infrastructure deficit – both physical and digital – will boost the power of trade creation and help to ensure the successful implementation of the AfCFTA. By tackling the continent’s supply-side constraints, policymakers can enhance both production and logistics in a region with more landlocked countries (16) than any other. As investors seek to capitalize on the economies of scale offered by the AfCFTA, integrating markets and improving connectivity must be a top priority.

Clarifying the AfCFTA’s rules of origin – which determine whether products are duty-free under the agreement – also is key to accelerating industrialization and the development of regional value chains. Despite the challenges posed by COVID-19, negotiators have made significant progress on the rules-of-origin agreement, which should be concluded later this year. That will pave the way for phase-two negotiations on key drivers of future growth, including protocols on investment, competition policy, and intellectual-property rights.

But, as the rush to conclude bilateral trade agreements with third-party countries suggests, Africa’s most important trade-integration challenge may be the perennial one of putting the region’s collective interest first. Although the AfCFTA does not bar member countries from entering such negotiations, bilateral deals with third parties could affect African trade patterns and set precedents for regional trade and investment rules. In practice, they could lead to trade deflection, given that the AfCFTA’s mostfavored-nation clause automatically extends tariff concessions granted to a third party to AfCFTA members.

As Jeffrey Sachs has argued, “Without a doubt, if Africa becomes economically integrated, it will be a global leader and the largest economic region in the world.” As of this writing, 41 countries have ratified the AfCFTA. But if the pact is to become the launchpad for Africa’s deeper integration into the global economy, governments must complement trade liberalization with robust trade facilitation measures, and strengthen regional coordination in order to engage with external partners as a unified trading bloc.

14

FRIDAY, FEBRAURY 25, 2022

| F E AT U R E

FRIDAY, FEBRAURY 25, 2022

15

Chocolate Day celebration can help the youth engage in domestic tourism

BY PHILIP GEBU

I

n 2005, the late Jake and his advisors at the time saw the drifting away of our youth into an unprecedented level of promiscuity. I remember whiles in Achimota secondary school, Valentine Day had become fashionable and students at the time will spend so much money on Valentine Day all in the name of showing their so-called love. Indeed, was it love or lust?

In those days young girls and boys will move around in the evening wearing red cloths ready for an outing which may end up in sex. Jo Ellen Fair in her research article entitled African Studies Review gave a detailed report on the rise of Valentine’s Day in Ghana. She state that Valentine Day was borrowed from abroad, altered to fit local circumstances, Valentine’s Day is part of a complex set of imported and indigenous lifestyle market that are used increasingly in urban Africa by individuals and social groups to construct identities as older and more traditional cultural norms and forms loosen their hold.

The self-conscious choice and arrangement in one’s life of these markers-some local, some imported, all under constant reconfigurationincreasingly, according to Chaney (1996, 2 is culture. As Chaney argues, lifestyle creation through choice does imply a new superficiality of culture or a looming monotony of global taste. Rather, the ability of individuals and groups to craft lifestyles through choice of symbols and consumption of products empowers them by uniting them with like-minded people in their own society and abroad, while distinguishing and separating them from persons near and far whose preferences, behaviors, and values mark alternative paths of personal and progress (2001:81-84; see also Bourdieu 1984:169-225).

The growth of the celebration of Valentine’s Day in Ghana is associated with the privatization of broadcast media, the reestablishment of vibrant urban commercial sector, rising consumerism, and a reexamination in Accra (and throughout urban Africa) of the contours of courtship, and marriage. This report builds from the assumption that the inform and ready communication afforded by mass media, and the lifestyle choices opened up by a healthy commercial sector, have been necessary preconditions to the reassessments of courtship, love, and marriage that are the heart of Valentine’s Day in Ghana.

Valentine’s Day is thus a window a process. Pro Mass media generate

Photo by eniko kis on Unsplash

interest in new cultural forms (section 1); mar develop in their accoutrements (section 2); and individuals and communities examine, shape, and reshape themselves and their identities- lifestyles-around choices of markers and meanings. Media depictions of Valentine’s Day and its various social and political meanings were drawn from newspapers in the National Archives, the contemporary press, and radio and television programming and advertisements aired in 2002.

Many in the West consider Valentine’s Day a thoroughly contemporary contrivance, a holiday manufactured by the greeting card industry. But the holiday has a deep history in Western culture: apparent preChristian antecedents in the Roman festival of Lupercalia; a pair of Saints Valentine putatively beheaded by Claudius II in the third century; churches and shrines dedicated to the martyrs’ memory throughout Europe; and a long association of the holiday with the desires of the human heart (Chase 1956; Myers 1972; Baird 1990; Santino 1994; Schmidt 1995). Europeans brought Saint Valentine’s Day with them to North America, but in the United States the holiday was obscure until 1910, when Joyce C. Hall established Hallmark

Cards, specializing in the sale of holiday greetings of all kinds, including valentines, that neatly packaged common expressions of love (Stern 1988; Schmidt 1995:94-102) Nearly all Ghanaians who went to school in the, Accra, during the 1970s and 1980s remember making or buying and exchanging cards with friends. Several men recalled wanting make an impression on their chosen Valentine by paying “a small boy” or employing a courier service to deliver cards and gifts to their beloved. One man recounted how his girlfriend at the university would not speak for days because he sent a domestic brand of chocolate instead imported one. At least among secondary and university students, Valentine Day appears to have enjoyed widening popularity from the 1980s onward the holiday did not catch the imagination of a larger public. From 2001, Ghanaian newspapers made no mention (no stories, no advertisements) of Valentine’s Day except for a very short feature that appear the weekend tabloid the Mirror (Feb. 10, 1990) explaining the history the holiday and giving tips on how to celebrate it.

Responding to increasing pressure from external funders (the World Bank, IMF,

16

| NEWS

FRIDAY, FEBRAURY 25, 2022

Ghanaians in Ukraine directed to seek shelter after Russia attack Affairs and Regional Integration to seek shelter after Russian President Vladimir Putin launched a wide-scale, pre-dawn attack Thursday against Ukraine.

The Ministry of Foreign Affairs and Regional Integration in a tweet said it was gravely concerned about the security and safety of over 1000 students and other Ghanaians in Ukraine.

It said it was engaging with authorities in Ukraine and other relevant diplomatic missions on further measures.

“The Government of Ghana is gravely concerned about the security and safety of our over 1000 students and other Ghanaians in Ukraine and has asked them to shelter in place in their homes or in government places of shelter, as we engage the authorities, our relevant diplomatic missions and our honorary consul on further measures” the tweet said.

Meanwhile, the National Union of Ghana Students (NUGS) has called on government to take urgent steps to evacuate students from Ukraine and Russia.

“We believe that the model used for the evacuation of students from China at the peak of the COVID-19 pandemic could be adopted in this instance as well. We are thus asking for the evacuation of students from the Eastern Provinces of Ukraine which is the present nucleus of the

conflict, and out of Russia as the country may pose an overall hostile environment to our students.

“Students may be temporarily resettled in the Western provinces of Ukraine which remain calm at present, or most preferably, out of the country altogether and back home till a resolution is reached on this crisis,” a statement issued on Thursday said.

It was not immediately clear how extensive the damage or casualties were in the initial stages of the assault, but Ukrainian authorities said Russian forces had struck military assets and other important defence facilities

and were attacking border units.

Explosions were heard thudding across cities throughout Ukraine, including in the capital, Kyiv.

US President Joe Biden condemned the “unprovoked and unjustified attack” shortly after it began and vowed that the world would hold Russia and Putin accountable for the aggression, which threatened to create global upheaval and escalate into the largest military conflict on European soil since the end of World War II. “President Putin has chosen a premeditated war that will bring a catastrophic loss of life and

human suffering,” Biden said in a statement after Putin announced military action against Ukraine.

Just minutes earlier, President Putin had said in a televised address to his country that Russia will conduct a military operation in eastern Ukraine.

The Russian president said the attack was needed to protect civilians in eastern Ukraine — a false claim the U.S. had predicted he would make as a pretext for an invasion. And he claimed that Russia doesn’t intend to occupy Ukraine but will move to “demilitarize” it and bring those who committed crimes to justice.

3 Days Training Workshop Theme: Contemporary Stores and Inventory Management Company ProSupp Consult is a multidisciplinary professional service group drawn from diverse top quartile multinational and public firms providing dynamic procurement and supply chain management services and trainings.

Course Overview It has become imperative to focus on Strategic Stores and Inventory because most organisations are struggling with dwindling working capital and cashflows for effective operations; but still have high investments and cash locked-up in goods, spare parts, items, MROs, stationeries etc. The strategic application of Stores and Inventory helps to contribute to the efficient and effective utilisation of public and private financial resources; which significantly improves the competitive advantage of companies, financial and sustainable business objectives and an increased Return On Investment (ROI). Again, Public Sector Stores and Inventory Practitioners feel marginalised, but this course will let them appreciate how they can contribute strategically to the reduction of government’s expenditure.

This module is designed to put the public and private sectors’ Stores and Inventory systems in context. It will be based on an experiential learning; applying theory in a practical way to foster good practice and application.

The Facilitator The Facilitator is an Award Winning Procurement and Supply Chain Management Professional with over twenty years practice in both local and international organisations in various industries including Financial Institutions, United Nations, Construction, Embassies and Manufacturing.

Serves on Entity Tender Committees for a number of Public and Private Organizations.

An Adjunct Lecturer, Board Member, Independent Consultant and the Current President, Ghana Institute of Procurement and Supply.

Collins Agyemang Sarpong MGIPS, MCIPS, MBA, CIPP

COURSE OUTLINE • Inventory Control (Stock Controls) Definitions, Systems and Management • Best Practices for conducting an inventory counts • Stakeholder Management and Engagement for efficient operations • Economics of Stores and Inventory (Order Levels and EOQs) • Strategic Stores and Inventory (Cashflow and Working Capital Impact ) • Codification and Digitization for efficient operations • Different Inventory Modules, Methods and Techniques • Stores Space optimization • Practically undertake disposal of unserviceable items as per Act 663 • Heath, Security and Safety in the stores (OSHA Regulations) • Lowering carrying cost strategies • Case Studies • Development of 90 days Actions Plans Who should attend?

Public and private sector Stores and Inventory Managers, Supply Officers, Procurement Managers, Logistics Managers, Internal Auditors, Finance Managers, Entity Tender Committee Members and all responsible for overseeing Stores and Inventory operations in their organisations.

Date:

23rd - 25th February 2022

Theme: Fee:

Contemporary Stores and Inventory Management

GHC 2,000 per participant (Inclusive of Course Materials, Certificates, Lunch and Coffee/Tea breaks)

Venue:

Coconut Groove Hotel, 5th Mozambique Link, Accra

REGISTRATION Please make the necessary payment into the following account details;

Account name: ProSupp Consult, Account Number: 1114682 Bank: ABSA Bank, Branch: Osu. Please contact the ProSupp office on 0302733425 / 0546896814 for any assistance and clarifications and also please alert the office when you have made payment.

FRIDAY, FEBRAURY 25, 2022

| TOURISM

17

Chocolate Day celebration can help the youth engage in domestic tourism CONTINUED FROM PAGE 15

and private financiers), the government of President Jerry Rawlings acceded in 1995 to demands for deregulation and privatization of national broadcast media. Radio was the first broadcast medium to be deregulated, with the Voice of Legon (now named Radio Universe) as the first private, nongovernmental radio station in late February few months later in April, Joy FM began broadcasting as Ghana’s first commercial station. Several stations followed, and by 1997 there were or so commercial stations operating in the Accra area. With so many new stations, the radio industry was confronted with problems of content and audience: what to broadcast, how to attract listeners, and how to deliver an economically viable audience to potential advertisers. Promotions seemed to be the answer. “We got hold of broadcasting promotion books, and we ran with them,” said Komla Dumor. Joy FM’s morning personality.

“Every station in town did the same (interview, Feb. 7, 2002). Dumor said Joy initiated Accra’s

Valentine Day’s promotions in 1996 because the station “wanted to build a solid base listenership” (interview, Feb. 7 2002).

In view of the above, the establishment of Valentine’s Day in most especially the youth and with the increasing concern of promiscuity, The Chocolate Day (known as National Chocolate Day) was instituted to take away the mind of the youth away from Valentine’s Day. It is a celebration instituted by the Ghana Tourism Authority in 2005.

The celebration which is earmarked for the 14th February annually, is targeted at boosting the domestic consumption of Ghanaian chocolate and other cocoa based products, to promote domestic tourism and to give a healthy orientation to the celebration of Valentine’s Day. The initiative is also aimed at shifting the attention of the youth from engaging in sexual activities towards

showcasing love to their loved ones through a gift of chocolate. The activity was instituted by the Ghana Tourism Authority in partnership with the Cocoa Processing Company of Ghana, the idea was instituted as part of the Ghana@50 celebrations by the Minister of Tourism at the time Jake Obetsebi Lamptey.

At the launch of the celebration, the Minister made reference to the low consumption of cocoa products in the country even though the country was the second largest producer of cocoa in the world and hoped that the institution of the day will encourage consumption among Ghanaians. The ministry also mentioned the proposed establishment of a cocoa museum following the initiation of the day.

Cocoa production has been the mainstay of Ghana’s economy since the 1870s. It dominates the agricultural sector and contributes about 30% of the country’s export earnings. Cocoa employs about 800,000 farmers directly.

It also supports the livelihoods of others in the commerce, service and industrial sectors of the Ghanaian economy.

This makes it an important generator of revenue. Chocolate comes from cocoa. On Valentine’s Day, instead of engaging in unproductive activities, it’s prudent to visit tourist attractions where the learning of cocoa will be unveiled. Cocoa Research Institute is one attraction many people could visit on the day. Another attraction is the Cocoa Processing Company in Tema.

The Tetteh Quarshie farm must also not be left out. When these cocoa based attractions are promoted and visited, the end result will be a desire created in the youth to explore our chocolate and cocoa based tourist sites. School children must be made to travel to other regions sharing chocolate. When this is well promoted and sponsors attracted a great avenue to promote domestic tourism would have put into reality.

Philip Gebu is a Tourism Lecturer/ Trainer. He is the C.E.O of FoReal Destinations Ltd, a Tourism Destinations Management and Marketing Company based in Ghana and with partners in many other countries. Please contact Philip with your comments and suggestions. Write to forealdestinations@gmail.com / info@forealdestinations.com. Visit our website at www. forealdestinations.com or call or WhatsApp +233(0)244295901/0264295901.Visist our social media sites Facebook, Twitter and Instagram: FoReal Destinations

18

| MARKET FORECAST

FRIDAY, FEBRAURY 25, 2022

WEEKLY MARKET FORECAST (21TH -25TH FEB, 2022) FUNDAMENTAL ANALYSIS- WILL THE RISING DOLLAR RISE END NOW? The U.S. dollar edged lower Friday, with risk sentiment boosted by the news that the U.S. and Russia were set to discuss the Ukraine crisis next week, raising hopes for a diplomatic solution.

The Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% lower at 95.740.

Russian Foreign Minister Sergei Lavrov agreed

to meet U.S. Secretary of State Antony Blinken for talks in Europe next week, the State Department said Thursday night.

The dollar, along with other safe-haven currencies the yen and the Swiss franc, have gained this week amid high tension on the Ukrainian border, with U.S. President Joe Biden warning on Thursday that the probability of

an invasion of Ukraine is still “very high.” News that the two principal players are set to meet next week has been greeted with a degree of optimism, although the situation remains very tense, especially after both Ukrainian government forces and Moscow-backed rebels accused each other of breaking cease-fire rules on Thursday.

TECHNICAL ANALYSIS BITCOIN(BTC/USD) LONG TERM BUY Bitcoin is expected to retest the demand zone order block and buy for a long term after the completion of the running flat correction. Sell Retest to demand zone is expected for short term then a big buy to around to 60,000 usd

GOLD(XAU/USD) BUY TO 1950.972 The yellow metal is expected to rally to 1950.972 to complete a crab pattern. Market is expected to fall after that level is reached for discounted pricing

GBPNZD(POUND-NEW ZEALAND DOLLAR) RALLY GBPNZD is set to rally to wave 5 to complete the impulse wave cycle. BUY at current market price

19

| MARKET FORECAST

FRIDAY, FEBRAURY 25, 2022

USDNOK(DOLLAR-NORWEGIAN KRONE) USDNOK is expected to rally to complete the crab pattern at 161.8 fib extension @9.53587

USDCAD(DOLLAR-CANADIAN DOLLAR) BUY The loonie is expected to go bullish to complete the Bat Pattern at 0.886 fib retracement level@ 1.53746

www.goldforexinstitute.com.

Call: (+223) 302906626 Email: info@goldforexinstitute.com Whatsapp: (+233)(0)558739928 Telegram: t.me/drharmonicsmentorship GFI services include: FREE Forex training & mentorship, Pro Chart Analysis, Copy Trading Multiple forex Account management(MAM), Free forex Signals (With Entry & Exit price) Premium Floor Trading. NB; whatsapp our contact to enroll in our next free forex course

PARTNER FX BROKER: “Trading doesn’t just reveal your character, it also builds it if you stay in the game long enough.”

Louis Boah, (Dr harmonics), Global fx strategist & mentor.

FX Technical Analyst, Gold Forex

B U S I N E S S 24 .C O M .G H

NO. B24 / 309 | NEWS FOR BUSINESS LEADERS

MONDAY, FEBRAURY 14, 2022

FRIDAY, FEBRUARY 25.2022

GLOBAL ECONOMY

FIGHTING THE LAST INFLATION WAR

By Jeffrey Frankel

I

n 1955, then-US Federal Reserve Chair William McChesney Martin famously said that the Fed’s job was to take away the punch bowl “just when the party was really warming up,” rather than waiting until the revelers were drunk and raucous. Decades later, in the aftermath of the 1970s inflation, it became an article of faith among monetary policymakers that they should not wait until elevated inflation showed its face before reining in an overheating economy. Today, with inflation surging, they are developing a renewed appreciation for the punch-bowl metaphor.

During the decade that followed the 2008 global financial crisis, adherence to this timehonored practice arguably led some central banks to pursue unnecessarily tight monetary policies.

In retrospect, they sometimes overestimated the danger of inflation.

In 2021, central bankers once again “fought the last war,” but this time by underestimating the danger of inflation as economic recovery began to run into capacity constraints. By the end of 2021, the US unemployment rate had dipped below 4%, and inflation, at 7%, had hit a 40-year high. The Fed, having earlier taken the optimistic view that any inflation would be transitory, must now play catch-up.

The experience of 2008-18 suggested that expansionary monetary policy could promote growth, and ultimately drive US unemployment below 4%, with few adverse effects on price stability and interest rates. This conclusion required no fundamental rethink of macroeconomic theory.

Rather, it followed naturally from the proposition that the economy at that time was operating on the low, flat part of the “LM curve,” and the low, flat part of the Phillips curve (which otherwise asserts a clear tradeoff between unemployment and inflation).

Consider key examples during that ten-year period when policymakers and commentators overestimated the danger that monetary easing would fuel inflation.

The European Central Bank actually raised its policy interest rate in July 2008. Although it soon corrected its mistake, it then raised rates again in April-July 2011. Sweden’s Riksbank did the same, raising interest rates in 2008 (through September) and, more egregiously, again in 2010-11.

Even more obviously mistaken in 2010 was a famous letter to then-Fed Chair Ben Bernanke from a group of 24 economists, academics, and fund managers, opposing the monthly asset purchases, known as quantitative easing, then underway, and warning that QE would not promote employment, but rather “risk currency debasement and

inflation.” As should have been clear at a time when unemployment still exceeded 9%, there was in fact no reason to fear that monetary stimulus would lead to excessive inflation. The consensus among economists is that the Fed’s aggressive monetary easing in response to the 2007-09 recession was fully justified.

Lastly, and more surprising to economists, was the 2016-18 period, when US GDP rose above its estimated potential and unemployment fell below 4%. In the past, this combination had signaled an overheating economy. So, it is understandable that the Fed raised interest rates from 2016 through the end of 2018. But, in the end, very little of the feared inflation materialized, suggesting in retrospect that the economy could have been allowed to “run hot” for longer.

Apparently, the Phillips curve, if not dead, was supine.

Now inflation is back on its feet. It turns out that when demand increases faster than supply, inflation results, just as the textbooks say. But the Fed, not wishing to repeat its mistake of 2018, underestimated the danger in 2021.

In 2020, the COVID-19 pandemic caused a sharp recession, before large US monetary and fiscal stimulus drove the subsequent rapid recovery. Inflation remained absent, the textbooks would tell us, because the negative pandemic-induced shock to demand must initially have been larger than the negative shock to supply, before the stimulus kicked in.

But there is also another, less orthodox, explanation. When an emergency or disaster strikes, causing a run on, say, toilet paper, only economists think the best response is to raise prices before inventories disappear.

Consumers, retailers, and toilet-paper manufacturers perceive this viscerally as “price-gouging” and express moral disapproval, so prices remain unchanged.

Later, when emergency conditions ease, manufacturers and retailers can raise

their prices without attracting the same opprobrium, especially when costs are rising. Despite well-known shortages in 2020, the price of toilet paper did not rise until 2021.

If there is any truth to this hypothesis, then the recent 7% US inflation may have included some “catch-up” by firms. In that case, inflation could well moderate during the coming year.

In any case, the Fed should now take away the punch bowl. Rising inflation is not the only evidence that the US economy is overheating. GDP growth has been rapid, and the labor market is tight.

The Fed has almost ended QE, which hugely expanded its balance sheet. But removing the punch bowl means also raising interest rates, as the Fed is expected to start doing in March, and gradually offloading the unconventional assets, particularly mortgage-backed securities, that the Fed has accumulated on its balance sheet. The Bank of England has already begun to sell off some of the bonds it holds, including corporate debt.

Meanwhile, the ECB may still be fighting the last war. Unlike the Fed and the BOE, it has not yet begun to taper its own QE policy, let alone raise its interest rate, which is still -0.5%. The ECB may be trying to avoid repeating its mistakes of 2008-11, when it failed to sustain stimulus in the wake of the global financial crisis. (Admittedly, growth has not been as strong in Europe as in the United States.)

The tendency to fight the last war stems from human nature. Recent events are most salient in shaping people’s perceptions of how the world works.

Central bankers can justify focusing more on these developments by pointing to rapid and fundamental changes in technology and society. But, as they are now realizing, a longer-term historical perspective offers wisdom derived from a wider variety of circumstances.

Published by Business24 Ltd. Nii Asoyii Street, Mempeasem. East Legon-Accra, Ghana. Tel: 030 296 5297 | 030 296 5315. Editor: Benson Afful editor@business24.com.gh. +233 545 516 133.