Business24 Newspaper 18 July 2022

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BUSINESS24.COM.G H

NEWS FOR B U SINESS LEA DERS

GHc5.5bn tax exemptions granted in 3 years | BY EUGENE DAVIS

Accra-Tema train shuttle service resumes today

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GPHA to start handling 20pct of cargo traffic effective Aug. 1 | BY PATRICK PAINTSIL

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Horticulture fast becoming the new job-making machine “When the last tree dies, the last man dies” they say and truly so because flora and fauna preserve the environment and hence human life, and at a time that economies are grossly feeling the harsh outcomes of climate change, the need to preserve our environment and green resources have become even more critical.

Aside the enviro-friendly outcomes, there is proven economic potential in the green economy, specifically the horticultural value chain.

Recent statistics put proportions of the youth (15 to 35) that are unemployed and seeking work at 34.2percent. Unemployment is therefore considered by many to be the most critical issue affecting the country.

It is trite to say that with the right national and individual orientation, policies, and drive, Ghana’s rich flora and fauna resources could provide millions of jobs to the country’s teeming youth.

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Ghana for the varied purposes of beautification, wealth and job creation as well as a sustainable fight against climate change.

Now in is tenth year, the annual Garden and Flower Show challenges and motivates the youth and businesses in the sector to aspire to grow and reach their full potential, in order to improve their livelihoods and impact society.

This year’s theme “Growth Unleashed” preps the mind of young Ghanaians to burst forth and to grow beyond the norms to achieve a blooming environment.

The global horticulture market is estimated to be valued at USD 20.77 Billion as of 2021 and is projected to reach US$40.24bn by 2026 at a compound annual growth of 10.2percent whilst global flower and ornamental plants market was valued at US$475.6m in 2020 and is expected to reach US$725.4m by the end of 2027, growing annually at 6.3percent during 2021-2027.

GHc5.5bn tax exemptions granted in 3 years

BY EUGENE DAVIS A combined GHc5.5bn of tax exemptions were granted between 2017 and 2020, a memorandum accompanying the new Tax Exemptions Bill, 2022 has revealed.

According to a memorandum, GHc1.7bn in exemptions was granted in 2020 and GHc3.8bn worth of exemptions in 2017, these exemptions exclude corporate and income taxes, petroleum tax reliefs and customs exemption for diplomatic missions The bill, which is before parliament, has gone through a second reading, and is expected to move to consideration stage in the course of the week for further deliberations before it goes through further stages for final approval by the legislature.

At the second reading stage, the Minister of Finance, Ken Ofori -Atta who sat through the debate acknowledged the need

to protect the public purse. He said it is “heartwarming” Ghana parliament is unanimous about the bill.

The motion was moved by a deputy minister of finance, Abena Osei Asare. In his contribution, Ato Forson [Ranking Member], Finance Committee revealed that total exemptions lost to the state from 2008 to date was GHc27bn.

Tax Exemptions in Ghana are embedded in statutory legislation and exemptions approved by resolutions by the parliament of Ghana. These include Income Tax exemptions, tax holidays, rebates and concessions, import exemptions, value added tax reliefs and excise tax.

The rationale for granting these exemptions include attracting foreign direct investments, alleviating the tax burden on the vulnerable in society, encouraging business start-ups, attracting

investment into specified sectors or locations and supporting the development agenda of government.

In the last ten years, tax exemptions namely Import Duty, Import Value Added Tax, Import National Health Insurance Levy,Import Ghana Education Trust Fund,ExportImport Levy,Special Import Levy and Domestic Value Added Tax in the economy have grown even though there has been a remarkable improvement to curtail the growth.

Exemptions distort fair competition among businesses in the same industry where private projects are granted exemptions to improve their profitability or viability, which are not available to other players of the same industry.

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Accra-Tema train shuttle service resumes today The Management of the Ghana Railways Company Limited (GRCL), has announced that the Accra-Tema passenger service, which was suspended temporarily for rehabilitation works is scheduled to resume on Monday, July 18.

A statement issued by the GRCL said after successfully addressing some technical challenges, the GRCL conducted series of test run and a final joint inspection was also carried out on July 7, by the GRCL and the Ghana Railway Development Authority (GRDA) to ascertain the suitability of the line for passenger service.

It said the GRDA, which was the industry regulator, had granted GRCL the approval to commence the shuttle service by their letter number ZA 121/384/02 dated July 13.

“The public is being advised to bear with us, that as a start a restricted speed limit of 35km/ her has been imposed for the movement of the train to enable our technical team continue addressing any teething problem that may emerge during these early stages of the resumption of the shuttle service,” the statement said.

“There would also be other GRCL on board the train to obtain the views and concerns of commuters to enable Management of GRCL address them to ensure smooth running of the passenger service to the best satisfaction of our clients.”

It said the public was hereby assured of their usual comfortable, safe, and punctual shuttle service that the GRCL provides.

GPHA to start handling 20pct of cargo traffic effective Aug. 1 | BY PATRICK PAINTSIL Calm has been restored at the Ghana Ports and Harbours Authority (GPHA) after an industrial action by workers that involved cessation of sailing and berthing of vessels with no ship allowed to berth or sail at the port.

This comes on the back of a circular from the state ports operator that it has reached a consensus with private concessionaire Meridian Port

Services (MPS) to start handling 20percent of all containerized cargo effective August 1.

After a crunch meeting on Wednesday July 13, 2022 involving the leaderships of the transport ministry, the ports authority and the MPS, a letter was issued under the hand of the CEO of MPS, Mohammed Samara, indicating the company’s willingness to cede the handling of the 20pct gateway

container traffic to GPHA for two years effective 1st August, 2022, according to a letter announcing the consensus, signed by Mrs. Esther Gyebi-Donkor, General Manager, Marketing and Corporate Affairs.

The letter also assured the port workers that management is committed to ensuring an effective implementation whilst reiterating its resolve to continue

delivering efficient services in a safe and secure environment to its valued stakeholders.

Workers of GPHA, precisely the Maritime and Dockworkers Union (MDU), last week downed their tool in protest to the failure of the private concessionaire, Meridian Ports Services (MPS), to honour its pledge to cede 20percent of cargo traffic to the state ports operator for an exclusivity period of ten years.

It must however be noted that the contract establishing the deal had originally entrusted full handling of cargo to the private investor and it was after a Cabinet review of the agreement in 2019 that recommended that MPS give some percentage of the business to GPHA. The union was therefore demanding through the strike action that the cabinet directive is complied with immediately with the signing of the necessary agreements as per the revised arrangement.

They also sought to stop the current attempts to hand over the reefer container which is being handled at the port by GPHA back to MPS, as that aspect of the business was excluded from the concessionaire agreement entirely.

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Societe Generale Ghana partners Adansi Travels on “Travel Now, Pay Later” loan Societe Generale Ghana (SG Ghana) and Adansi Travels have announced the launch of a new offer that affords individuals the opportunity to travel across the globe without worrying about limited funds.

With this offer, interested individuals and customers of the bank can conveniently “travel now and pay later”.

This product makes it possible for Ghanaians who want to travel to access an interest-free loan from Societe Generale Ghana.

Speaking at the event, Mr Obed Hoyah, General Manager of Retail Business for SG Ghana stated that “while it is the desire of many to visit their favourite holiday destinations, lack of adequate funds has been a drawback. It is for this reason that Societe Generale Ghana is today partnering with Adansi Travels, arguably the foremost travel company in Ghana to assist customers with the realization of their dreams.”

Mr. Hoyah explained that with the launch of this new

offer, customers of the bank and workers on the Controller and Accountant General Department (CAGD) payroll can access an interest-free loan to enable them to visit their dream destinations and pay later in flexible monthly instalments.

The launch of this product adds to the existing ‘Buy Now Pay Later” offer under the bank’s

Consumer Loan scheme which provides customers with the convenience of buying the latest, electronic gadgets, phones, home furnishings and more, with the option to pay later at zero percent interest.

The Managing Director of Adansi Travels, Mr. Gideon Asare, stated that “indeed the two teams are experts in their respective

fields, therefore complement each other perfectly and have worked tirelessly to produce an offer that capitalizes on their well-honed capabilities in order to bring the luxury of travel to all.”

He added that similar to SG Ghana, Adansi Travels started with the aim of helping Ghanaians fulfil their dreams and by launching this offer.

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The prospects for inland waterways development in Ghana

By Chief Obosu Mohammed, LL.M MA ACIArb LL.B DPA | Executive Director [ Institute for African Maritime Development ] obosu.mohammed@gmail.com “I am the river, sit and listen to my wisdom” (Ian Menard, 1994). Rivers and other water bodies have been essential to human existence since the beginning of time due to their varied uses such as transportation, irrigation, fishing, tourism, and hydropower generation.

They are a significant foothold for local and regional socio-economic development.

Inland Waterways (IW) are navigable bodies of water that are central to the movement of cargoes and passengers with the use of watercraft such as pontoons, boats, ferries, water buses, canoes, and cargo barges. Rivers, lakes, streams, lagoons, and canals are all examples of navigable Inland Waterways (IW).

Ghana is gifted with numerous inland bodies of water. The Volta Lake, along with the upstream Volta Rivers, Afram River, and the Oti River, are Ghana’s most prominent Inland Waterways (IW). The Volta Lake, one of the world’s largest artificial lakes, which was formed after the construction of the Akosombo dam covers an area of about 8,500 km2.

The entire Volta system spans about 1,600 kilometres and drains an area of approximately 388,000 square kilometres, of which about 158,000 square kilometres are within Ghana. However, there is little information on the navigability of other water bodies in Ghana, including the Pra and Ankobrah Rivers, which were previously essential sources of cargo transport.

Other smaller rivers and major independent rivers, such as the Birim, Densu and Tano rivers, can be found in various areas around the country, and some of them may be navigable but not to their full length. These numerous water bodies can be exploited to enhance Inland Water Transportation (IWT).

The Volta system, for example, can connect the southern, middle, northern belts, and landlocked countries. This can be done in conjunction with establishing an integrated multimodal transportation corridor because Inland Waterways (IW) lack continuous connectivity. This mode of transportation is widely used in many countries as an alternate means of transport.

It accounts for approximately 8.5% of the total cargo movement in the United States, 8.3% in China, 38% in the Netherlands, 24% in Belgium, and 13% in Germany. In Ghana, however, Inland Waters (IW) are underutilised; road transport accounts for approximately 95% of the country’s freight and passenger traffic.

So far, the Volta Lake Transport Company (VLTC) is a major commercial operator of Inland Water Transportation (IWT) on the Volta Lake for passengers, cargo, and

cross-ferry services. Nevertheless, the indigenous people who live along most rivers and other bodies of water in Ghana have been using wooden canoes for transportation and other activities since time immemorial.

The government of Ghana, through the Ministry of Transport, has made some efforts to scale up the operations of the Volta Lake Transport Company (VLTC) and Inland Water 2 Transportation (IWT) on Volta Lake through the Volta Lake Improvement Project with the help of the Korean Exim Bank. The Ghana Maritime Authority (GMA) has also made significant efforts over the years to promote the safety of lake users and to remove tree stumps, which have been a major source of accidents on the Volta Lake.

While all these efforts are laudable, the government must commit more resources to uncover Ghana’s hidden treasures in Inland Water Transportation (IWT).

Advantages of Inland Waterways (IW) In terms of comparative analysis, it is critical to recognise that Inland Water Transportation (IWT) is more advantageous than any other mode of transportation. For example, one litre of fuel will move 24 tonnes over one km on the road, 85 tonnes over the rail per km, and 105 tonnes per km over Inland Water Transportation (IWT), making it very fuel-efficient.

However, the cost argument about the Inland Water Transportation (IWT) is not static and must be put into perspective because it is accurate when it comes to singlemode carriages other than those that require door-to-door or cargo transfer in addition. Other benefits of Inland Water Transportation (IWT) include environmental friendliness, job creation, revenue generation for the government and private sector, improved modes of transportation for people, increased trade, and commerce, and stimulating seamless interconnectivity that connects hinterlands along navigable rivers and coastal routes.

The Inland Waterway (IW) provides a rare opportunity for tourism traffic and growth. The natural beauty of the Volta Lake, lagoons, rivers, and streams can attract many domestic and international tourists who want to travel through these waterways to see the natural life of the people who live there as well as the scenic views.

The development of Inland Waterways (IW) will offer impetus to the Domestic Draft (Cabotage) Bill, 2017 which is currently before the Parliament of Ghana when assented into law.

Recommendations for Inland Waterways (IW) Development

Our bodies of water must be assessed and, as a result, comprehensive feasibility, viability, and desirability studies must be conducted, particularly for those that show prospects of navigability after preliminary investigations have been done.

Its financial, social, environmental, and economic implications must all be considered simultaneously.

These Inland Waterways (IW) as a preferred option should be evaluated in terms of their cost and benefit. An Inland Waterways Master Plan (IWMP) should be developed based on the results of the comprehensive feasibility, desirability, and viability studies. We cannot achieve short-mediumlong term planning and development of Inland Waterways (IW) as a viable form of transportation without a master plan.

In Ghana, there is a master plan for road and railway networks that simplifies planning and investment in that sector; however, the same cannot be said for Inland Waterways (IW). The planning of the Inland Waterways (IW) must be transparent and participatory, with the involvement of civil society groups, relevant stakeholders, and, most importantly, the 3 local communities who live along with the water bodies and may be adversely affected during the developmental and maintenance stages of the waterways.

Alternatively, Ghana could take a more focused approach, developing only ‘commercially significant’ Inland Waterways (IW), as other countries do. This will allow for the more prudent use of scarce resources to develop more economically viable waterways instead. Inland Water Transport (IWT) is intermodal in nature and therefore not self-dependent. There is a need for effective road, rail, and coastal shipping integration from the Inland Waterways (IW) to enhance their seamless connectivity.

That is why projects like the Tema - Mpakadan Railway Project are essential for the transport of cargo through seamless integration with other modes of transportation.

To ensure the construction and availability of vessels, a deliberate support-based policy must be in place. In Ghana, people are currently constructing smaller vessels out of fibreglass and bamboo.

The capabilities of these indigenous vessel builders must be expanded to support the development of our Inland Water Transport (IWT) with a Strategic funding and Subsidy Scheme, and Tax and Custom Concession Plan for both the builders and buyers.

Modal shift incentives can be used to attract cargo traffic to Inland Water Transport (IWT).

The incentives are usually offered to certain types of cargoes that make use of the Inland Water Transport (IWT). Modal split can also be used to split cargo among Inland Water Transport (IWT) and other modes of transportation. These are all policy frameworks that can be implemented to make Inland Water Transport (IWT) commercially viable and competitive.

The central government’s allocation of funds for the development and maintenance of our Inland Waterways (IW) has been either non-existent or abysmal.

Year after year, statutory budgets are presented without mentioning Inland Waterways (IW), in contrast to roads and railways, which receive significant budgetary support.

The same commitment to Inland Waterways (IW) development and maintenance will ensure its rapid growth.

A River Information Systems (RIS) must be strongly considered to offer vessel traffic management systems and real-time exchange of information to aid in navigation.

To protect life and property, the Ghana Maritime Authority (GMA) should expedite the installation of navigational aids on all Inland Waterways (IW) to enhance day and night navigation.

The Ghana Maritime Authority (GMA) may engage local manufacturers to produce life jackets on their behalf and distribute it to watercraft and traditional boat owners who navigate our Inland and Coastal Waterways for purchase on an instalment scheme. This could be a safety measure while also providing GMA with a footing to strictly enforce the use of lifejackets in our Inland and Coastal Waters.

The governance structure must be streamlined to determine which institution will have oversight and operational responsibility for Inland Water Ports. Could it be the Volta River Authority (VRA), Ghana Maritime Authority (GMA), Volta Lake Transport Company (VLTC), or Ghana Ports and Harbours Authority (GPHA)?

Conclusion In comparison to other modes of transportation, Inland Water Transport (IWT) has several advantages.

Regardless, Inland Waterways (IW) face unique challenges such as the level of investment required, the availability of insufficient water depth during the dry season, infrastructure, and maintenance, among others. It is trite that Inland Water Transport (IWT) has had a negligible impact in Ghana.

These should necessitate a greater governmental and private-sector commitment to the development, maintenance, and operations of our Inland Waterways (IW).

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Sahara STEAMers Program targets discovery of young inventors in Kenya The Inaugural National demo day of the Catch Them Young and Curious - Sahara STEAMers Program, facilitated by Sahara Foundation, has produced three winners in Kenya, following a keen competition that featured impressive inventions by young students.

The program is designed to create an opportunity for 150 participants across three countries; Nigeria, Kenya, and Uganda to access deepdive learning experience, practical classroom, and world-class labs leading them on the journey of becoming technical problem solvers.

Sahara Foundation, the corporate responsibility vehicle of leading energy and infrastructure conglomerate, Sahara Group, had last month hosted the Nigerian edition that saw the participation of Igbobi College, Yaba and Oshodi Junior High school, Lagos, compete to represent the nation in the regional Demo grand final event.

The Sahara STEAMers program encourages young African students to explore ways of proferring solutions to global issues through interest in Science, Technology, Engineering, Arts and Mathematics (STEAM).

The Kenya editiion which held at ihub, Nairobi, was hosted by Asharami Synergy Kenya, a Sahara Group company. Participants had the opportunity to showcase their inventions proving that engagement in STEMM can help produce sustainable solutions, especially in developing countries.

Sultan Kirigha, STEM CAFÉ Educator said: “The students have

worked hard, and their presentations were remarkable. Pulling off such presentations after six months training is something worthy of commendation.” Kirigha said: “The judges focused on Energy solutions that transform and shape the communities.”

Asharami Synergy Country Manager Debola Adesanya said, “I have learnt a lot from the amazing students we have had the privilege of hosting today. You have outstanding projects, and we look forward to seeing more inventions from you and ultimately explore how Sahara Foundation will continue to support these innovative solutions to become drivers of sustainable development in Kenya.”

Adesanya added that Asharami Synergy remained committed to

facilitating access to clean energy in Kenya in line with Sahara Group’s leading role in promoting energy transition in Africa.

Lavinah Gonah, Operations Manager, Asharami Synergy, said the company has since inception facilitated the supply of 2,040,000 Metric Tonnes of Petroleum products into Kenya as a foremost oil marketing company. “With innovation at the heart of Asharami’s operations, powering creative programs which support innovative thinking and solve prevalent challenges in our society is a commitment Asharami Synergy is dedicated to advancing, “ she said.

One of the projects presented

by St. Nicholas Senior School is the Automated home cleaner designed to help people perform house chores.

The device which mops seamlessly, is fitted with a vacuum that operates as an automatic floor cleaner.

It also has a music button and another button to light up the lightemitting diode (LED) connected to it while in use. “This will be the best cleaning little guy ever created. The cleaning bot has an option of three names just to make it seem like it is part of the family. The names are Chiku or Boti.

The innovation which is aimed at solving Global Warming challenges using wind power, will also reduce pollution and radiation,” explained students from St. Nicholas.

Another group produced an Automated Irrigation System which detects the level of water in the soil and sends a buzzing alarm that alerts the farmer to turn the water on or off.

Learners were assessed on how they explored simulations and hands-on learning of physical computing concepts. It emerged that the contestants were able to identify a problem in their community and delivered projects to proffer solutions to the identified problem within their communities.

The competition featured five groups each from Olympic High school and St. Nicholas school. The students’ inventions targeted several sectors including Agriculture, Energy, Home Automation, Transport, and Security. The top three (3) groups that emerged winners of the competition will now go on to represent Kenya in the grand regional demo day event against the winners from Nigeria and Uganda.

Farid Antar retires after 43 years at Republic Bank The Managing Director of Republic Bank Ghana, Farid Antar, officially retired from active service on Thursday, July 14, 2021, after 43 years of service to the bank.

A farewell event was organized on Saturday, July 9, 2022 in his honour by Republic Bank Ghana at Kempinski Hotel, Gold Coast City.

The event was attended by Mr. Vincent Pereira, the Board Chairman of Republic Financial Holdings Limited, the parent company of Republic Bank Ghana; the President/CEO of Republic Financial Holdings Limited, Mr. Nigel Baptiste; Mr. Derwin Howell, an Executive Director, Republic Bank Limited; Board Members, Executives and Staff of Republic Bank Ghana; Regulators; key customers; other stakeholders, friends and family of Farid Antar.

Many took turns, through video and behind the event lectern, to pour out their experiences and appreciations to Mr. Antar.

The moment of the night

was when Mr. Antar mounted the podium to give his farewell speech.

He was full of appreciation to the Board of Directors and staff, friends, family and his wife, for their enormous support in his life.

He said the key life-nuggets that

guided him in life and in his career were that: “there is never the right time to do the wrong thing, and, there is never the wrong time to do the right thing! – Lou Holtz.

“Just because others are doing it doesn’t mean it is right way!

“Every job is a self-portrait of the person who does it. Autograph your work with excellence! – Author Unknown” and “You do not take anything with you other than your values and integrity!”

“Farid, you have been Phenomenal!” These were the words of Mr. David Addo-Ashong, a Board Member who spoke on behalf of the Board of Directors of Republic Bank Ghana at the event.

Prior to his appointment as Managing Director of Republic Bank Ghana, Mr. Antar was the General Manager/Enterprise Risk Management at Republic Bank Limited and the Chief Risk Officer at Republic Financial Holdings Limited.

He had previously served in several senior management roles as the General Manager/

Corporate Operations & Process Improvement, the Senior Manager/Regional Operations (Overseas), the Senior Manager/ Business Transformation, Senior Manager/Retail Delivery & Marketing, Manager/Product Parameterisation & Business Growth and Marketing Manager/ Personal & Commercial Lendings.

During his tenure as Managing Director, Republic Bank Ghana witnessed significant milestones and growth.

The Bank significantly increased its profitability and shareholder value, enhanced its brand and visibility, improved its digital and core services and offerings, consistently witnessed a high employee engagement.

Republic Bank Ghana won many awards during his tenure, including in the last couple of months alone, two prestigious awards at the International Banker Awards 2022, namely the “Best Innovation in Retail Banking Ghana” and the “Best Private Bank in Ghana”.

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Israel eyes Ghana’s local agriculture production The State of Israel, which produces about $1.2 billion worth of agricultural inputs and technology, has expressed its readiness to partner with indigenous companies to augment Ghana’s local production.

This would be done through the establishment of long-term collaborations between Israeli and Ghanaian companies, knowledge transfer and investment in the agriculture sector.

The move is aimed at enhancing the abilities of Small and Mediumsized Enterprises (SMES) in Ghana to produce for the local economy and reach out to market provided by the African Continental Free Trade Area (AfCFTA).

Speaking with the Ghana News Agency in Accra, Ms Ayelet Levin Karp, the outgoing Head of Trade and Economic Mission, Embassy of Israel, said that a lot had been achieved in financial technology (fintech) and cyber technology.

She said this on the sidelines of a ceremony to welcome Mr Yaniv Tessel, the incoming Head of Trade and Economic Mission, Embassy of Israel, as Ms Karp ends her tenure of office.

Ms Karp noted that there were a lot of opportunities to explore other sectors of the economy through collaborations, particularly agriculture production.

Other areas to enhance partnerships between Israel and Ghana included energy, mining, and health.

“There’s so much more that can be done especially producing locally in

Despite the adverse effects of the COVID-19 pandemic on the Ghanaian economy, she said that: “It is actually now a good time to come to Ghana because there are new opportunities in the production of organic fertilizers, and other agriculture ventures.”

Mr Edem Yevutsey, General Secretary of the Ghana-Israel Business Chamber, also said that the

Ghana. A lot of companies are now into AfCFTA, so, we’re looking at joining hands with local partners to manufacture locally for West Africa and Africa.” Ms Karp said.

Chamber would continue its work with the Embassy to enhance trade between Ghana and Israel.

He reiterated the Chamber’s resolve to propel partnerships

between Ghanaian companies through business to business (B2B) meetings with Israeli companies in fintech, cybersecurity, energy, and agriculture.

The incoming Head of the Trade and Economic Mission, Mr Tessel said that he was enthusiastic about the current Ghana-Israel business relations, which he described as “a foundation” for him to scale up.

He pledged to work with all partners of the Mission and establish new relations to increase the number of Israel businesses working in Ghana, as well as trade between the two countries.

Some partners of the Chamber, lauded Ms Karp for her consistency and drive in connecting Ghanaian businesses to Israel counterparts, and other business opportunities.

They include the Intercom Programming and Manufacturing Company (IPMC), IT Consortium, Jospong Group of companies, and the Coalition of Non-Governmental Organisations (NGOs) in Water and Sanitation (CONNIWAS)/World Vision Ghana.

GNA

Invest more in Africa—Akinwumi Adesina urges keen Irish business community Since joining the African Development Bank Group as its 81st shareholder in 2020, Ireland has shown steadily increasing interest in strengthening its economic ties with Africa. That mission received a strong boost last week at the 7th Africa Ireland Economic Forum in Dublin, as African Development Bank Group President Dr. Akinwumi Adesina enjoined the Irish business community to invest more in Africa.

“If you are not investing in Africa, you’re not in business,” Adesina told his audience. “Foreign direct investment of Ireland in Africa was $572 million at the end of 2020 and represented only 0.05% of Ireland’s total net foreign direct,” Adesina said.

“This is too low. Ireland should invest a lot more in Africa. Let’s set a target of 15% of Irish investments in Africa.”

The exhortation from Africa’s premier development finance institution’s chief was matched by the Irish authorities’ publicly expressed enthusiasm about IrelandAfrica cooperation. Speaking at the forum on Thursday, Minister of Foreign Affairs and Minister of Defence Simon Coveney talked about Ireland’s deepening economic and cultural links with Africa. He noted the prospects for closer trading links with the continent, pointing out that trade between Ireland and Africa would likely reach €5 billion by 2025.

Receiving the Bank Group chief on Friday, Irish President Michael D. Higgins congratulated Adesina for his work on the recent establishment of the African Pharmaceutical Technology Foundation. “Nothing is more important than that,” said

President Higgins. He spoke about his long-time interest in Africa and his optimism for its economic advancement.

Discussing the looming global food crisis prompted

by Russia’s war in Ukraine, President Higgins welcomed the pre-emptive steps the Bank had taken to ensure food security for the continent.

Describing their meeting, Adesina said: “President Higgins so warmly received me. He has a heart and passion for Africa. He told me: ‘You are doing such an incredible job for Africa with your leadership in running the African Development Bank. I am inspired by your vision.’”

Similar support for continued strong cooperation came from senior Irish officials with whom Adesina met during his visit, notably: Colm Brophy, Minister of State for Overseas Development Aid and Diaspora; John Hogan, Secretary General of the Department of Finance and Alternate Governor for Ireland at the African Development Bank Group; and Paul Ryan, Director of the department’s International Finance and Climate Division, which is responsible for managing Ireland’s shareholding in international financial institutions.

Adesina thanked the Irish government for joining the African Development Bank and the African Development Fund, the Bank Group’s concessional lending arm, and he expressed appreciation for Ireland’s contribution—announced by Foreign Affairs and Defence Minister Coveney on Thursday—of €2 million to the African Development Bank for climate adaptation.

In an address to the forum on

Thursday, the African Development Bank head held a packed conference hall captive as he spoke about the current African economic environment, the continent’s challenges, its many opportunities, and about the African Development Bank Group’s role as a “solutions bank,” a valued partner to its regional member countries, its international development partners, and to the international business community, whose investment he said was desirable. “You can count on the African Development Bank as a partner,” he stressed.

The Bank president was also interviewed(link is external) at the Institute of International European Affairs (IIEA) by Ambassador David Donoghue, Ireland’s former Permanent Representative to the United Nations. Welcoming Adesina, he said: “Dr Adesina is often described as Africa’s Optimist-inChief and is widely praised for his visionary leadership and passion for the transformation of Africa. Since he took over as President of the African Development Bank in 2015, the Bank has achieved the highest capital increase since its establishment in 1964.”

In his opening remarks, Paul Ryan said: “As well as being Africa’s Optimist-in-Chief, I’d like to say to Dr. Adesina that he is also Ireland’s closest friend in the African Development Bank and in the continent of Africa as well. He has been a fabulous partner for Ireland for the last couple of years, particularly since we joined the Bank in February of 2020. […] The response by the Bank—under the leadership of

the President—to Covid and now to the Ukrainian war, has been absolutely exemplary. A lot of future-proofing kicking has been done in relation to food security, renewable energy, economic development, and it’s exactly in line with our developmesnt objectives. We are very happy to join the bank, very pleased with the level of engagement and really pleased with the work that the Bank has been doing in the continent.”

Ryan added that Adesina—“first elected President of the Bank in 2015 and unanimously re-elected for another five-year term in August of 2020”—is a bold reformer who completely transformed the agriculture sector in Nigeria as agriculture minister over four years, and that he has replicated that same success at the African Development Bank. “We are very happy with the President. Our fellow colleagues in the constituency are very happy.

And more importantly, the wider membership in the continent of Africa are very happy.”

Adesina spoke about the work of the Bank—in particular the High 5 Strategic Priorities that he is credited with developing for the institution— and how he saw these priorities as the fulcrum for both transforming Africa and helping to achieve the UN Sustainable Development Goals.

Adesina invited officials and private sector operatives to the next edition of the Bank’s Africa Investment Forum, taking place in Abidjan in November.

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No net zero without nature Businesses, investors, and governments that are serious about fulfilling net-zero emissions pledges before 2050 should be rushing to protect, conserve, and regenerate the natural resources and ecosystems that support our economic growth, food security, health, and climate. Yet there appear to be worryingly few trailblazers out there.

Worse, we are quickly running out of time. The science makes clear that to avoid the most catastrophic effects of climate change and to build resilience against the effects that are already inevitable, we must end biodiversity loss before 2030.

That means establishing lasting conservation for at least 30% of land and sea areas within eight years, and then charting a course toward living in harmony with nature by 2050.

Though the challenge is massive, ignoring it makes no sense from a business perspective. A World Economic Forum white paper estimates that nature-positive policies “could generate an estimated $10 trillion in new annual business value and create 395 million jobs by 2030.”

Among other things, such policies would use precision-agriculture technologies to improve crop yields – diversifying diets with more fruit and vegetables in the process – and boost agroforestry and peatland restoration.

A nature-positive approach can also be more cost-effective. For example, the Dasgupta Review (the Final Report of the United Kingdom’s Independent Review on the Economics of Biodiversity)

finds that green infrastructure like salt marshes and mangroves are 2-5 times cheaper than grey infrastructure such as breakwaters.

Nonetheless, private-sector action is lagging, including in economic sectors where the health of value chains is closely tied to that of nature. That is one key finding from an analysis just released by the UN Climate Change High-Level Champions, Global Canopy, Rainforest Alliance, and others.

Out of 148 major companies assessed, only nine – or 6% – are making strong progress to end deforestation. Among them are the Brazilian paper and pulp producer Suzano and five of the largest consumer goods companies: Nestlé, PepsiCo, Unilever, Mars, and ColgatePalmolive.

Unilever, for example, is committed to a deforestation-free supply chain by 2023, and thus is focusing on palm oil, paper and board, tea, soy, and cocoa, as these contribute to more than 65% of its impact on land. Nestlé has now made over 97% of its primary meat, palm oil, pulp and paper, soy, and sugar supply chains deforestation-free. And PepsiCo aims to implement regenerative farming across the equivalent of its agricultural footprint by 2030, and to end deforestation and development on peat.

These are positive steps, but they represent exceptions, rather than any new normal. Moreover, the financial sector has also been slow to turn nature-positive.

Since the COP26 climate-change

conference in Glasgow last year, only 35 financial firms have committed to tackle agricultural commodity-driven deforestation by 2025. The hope now is that more firms will join the deforestation commitment by COP27 this November. Under the umbrella of the Glasgow Financial Alliance for Net Zero, 500 financial firms (representing $135 trillion in assets) have committed to halving their portfolios’ emissions by 2030 and reaching net zero by 2050. And now, the Alliance has issued new net-zero guidance that includes recommended policies for addressing deforestation.

Nature functions as a kind of global capital, and protecting it should be a no-brainer for businesses, investors, and governments.

The World Economic Forum finds that “$44 trillion of economic value generation – over half the world’s total GDP – is moderately or highly dependent on nature and its services.” But this profound source of value is increasingly at risk, as demonstrated by the current food crisis, which is driven not just by the war in Ukraine but also by climate-related disasters such as drought and India’s extreme heatwave, locust swarms in East Africa, and floods in China.

Businesses increasingly have the tools to start addressing these kinds of problems. Recently, the Science Based Targets initiative released a methodology for targeting emissions related to food, land, and agriculture.

Capital for Climate’s NatureBased Solutions Investment platform helps financiers identify

opportunities to invest in nature with competitive returns. And the Business for Nature coalition is exploring additional moves the private sector can make.

Governments have also taken steps in the right direction. At COP26, countries accounting for over 90% of the world’s forests endorsed a leaders’ declaration to halt forest loss and land degradation by 2030. And a dozen countries pledged to provide $12 billion in public finance for forests by 2025, and to do more to leverage private finance for the same purpose. They can now start meeting those commitments ahead of COP27 in Sharm ElSheikh, by enacting the necessary policies, establishing the right incentives, and delivering on their financial promises.

Meanwhile, the UN-backed Race to Zero and Race to Resilience campaigns will continue working in parallel, helping businesses, investors, cities, and regions put conservation of nature at the heart of their work to decarbonize and build resilience. The five strong corporate performers on deforestation are in the Race to Zero, and the campaign’s recently strengthened criteria will pressure other members to do more to use biodiversity sustainably and align their activities and financing with climate-resilient development.

The world is watching to see if the latest promises of climate action are robust and credible.

By investing in nature now, governments and companies can show that they are offering more than words.

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| FEATURE

MONDAY, JULY 18, 2022

Understanding The Concept of Liquidity In Banking Banks play a central role in all modern financial systems.

To perform effectively, banks must not only be safe but also be perceived as such. The single most important assurance of safety is capital, which can be defined technically as the excess of the economic value of a bank’s assets over its liabilities.

Capital represents a cushion that is available to cover losses of any kind. However, lessons from past experiences, more recently that of the 2008 global financial crisis, show that a second type of buffer is critical – the “liquidity” that banks have, to cover unexpected cash outflows. A bank can be solvent, holding assets exceeding its liabilities on an economic and accounting basis, and still die a sudden death if its depositors and other significant providers of funding lose confidence in the institution.

Liquidity is, therefore critical and fundamental to the effective running of a bank. This write up breaks down the concept of liquidity and why it is of such crucial importance to banks. The article also discusses how banks can achieve adequate liquidity and the economic value of maturity transformation.

What is liquidity at a bank?

Liquidity at a bank is a measure of its ability to readily find the cash it may need to meet its due obligations. Liquidity can come from direct cash holdings in currency or on account at the Reserve/Central Bank. More commonly, it comes from holding securities that can be sold quickly with minimal loss. This typically means highly creditworthy securities, including government bills, which have short-term maturities. Indeed, if their maturity is short enough, the bank may simply wait till maturity. Such short-term, very safe securities also tend to trade in liquid markets where large volumes can be sold without moving prices too much and with low transaction costs (usually based on a bid/ask spread).

However, a bank’s liquidity situation, particularly in a crisis, will be affected by much more than just this reserve of cash and highly liquid securities. The maturity of the bank’s illiquid assets will also matter, since some of them could mature or be sold - mostly at substantial losses - during the cash crunch, thereby providing an additional source of funds.

On the other side of the balance sheet, banks often have contingent commitments that require payments of cash, particularly through lines of credit offered to some of their customers. Of course, the biggest contingent commitment in most cases is the requirement to pay back demand deposits at any

time that the depositor wants.

Why do we care about banks’ liquidity?

We care about banks’ liquidity levels because banks are important to the financial system and they are inherently fragile if they do not have sufficient safety margins.

The recent global financial crisis in 2008 demonstrated the harm that an economy can suffer when credit dries up in a crisis. Another clear example locally was the 2016/2017 financial sector challenges in Ghana, resulting in the banking sector clean-up costing billions of Cedis. Liquidity difficulties were undoubtedly some of the key challenges with several of the affected banks in Ghana.

Capital is arguably the most important safety buffer. It provides the resources to recover from substantial losses of any nature and gives those dealing with the bank confidence in its safety. However, the typical cause of a bank’s failures is usually a liquidity problem that makes it impossible to survive a classic “bank run” or, a modern equivalent, such as an inability to access the debt markets for new funding. It is entirely possible for the economic value of a bank’s assets to be more than sufficient to cover all of its claims and yet for that bank to crumble because its assets are illiquid and its liabilities have short-term maturities.

Why are banks prone to runs?

A bank run is the term used to describe a situation where large groups of depositors withdraw their money from banks simultaneously due to fears that the bank will become insolvent. Banks have always been prone to runs because one of their principal social purposes is to perform maturity transformation, also known as time intermediation. In other words, they take demand deposits and other short-term funds and lend them out at longer maturities.

Maturity transformation is useful because depositors often have a strong preference for liquidity at the shortest possible time, yet much of the useful activity in the economy requires assured funding for longer periods – usually years.

Banks square this circle by relying on the assumption that most deposits are “sticky”. Demand deposits can theoretically all be withdrawn in a single day, yet their average balances show remarkable stability in normal times. Therefore, banks can lend out the funds for longer periods with a fair degree of assurance that the deposits will remain available or that equivalent deposits can be obtained from others as needed, perhaps with a modest boost in deposit rates.

The problem, however, is that sometimes depositors lose confidence in a bank, or in the banking system, and withdraw

their funds in large volumes than normal. This is the classic “bank run” that has caused the demise of many a bank over the centuries.

The surest way to counter a bank run is to restore confidence. No bank that engages in a normal level of maturity transformation can survive a bank run without some form of support. There is much that a central bank can do to aid with liquidity crises, but there are limits to what can be accomplished.

The risks of deposit runs have been demonstrated often enough that many countries have a system of deposit insurance. These guarantee that bank depositors will not lose their funds, up to certain specified amounts. Sometimes there are limits on what entities are insured. Banks in Ghana, for example, may not have insurance on their deposits in other banks.

Deposit insurance is a very important protection against bank runs.

However, it is important to note that modern banks often rely, to a significant extent, on short-term borrowings in the financial market.

Consequently, it doesn’t have to take simultaneous large numbers of depositors’ withdrawal to become a serious problem. The inability to roll over debt through new securities issuances has a similar effect to deposit withdrawals.

Again, the 2008 global financial crisis demonstrated this, since very few banks experienced deposit runs, yet this did not eliminate liquidity problems. To minimise this risk, some banking groups have stringent limits to their reliance on wholesale funding How can banks achieve adequate liquidity?

Banks can increase their liquidity in multiple ways, each of which ordinarily has a cost, including shortening asset maturities, improving the average liquidity of assets, lengthening liability maturities, issuing more equity, reducing contingent commitments and obtaining liquidity protection.

How much liquidity is enough?

Since liquidity comes at a cost, a bank faces a trade-off between the safety of being highly liquid and the expense of obtaining it. This makes it difficult to answer the question of how much liquidity is enough. The complexity of the financial system makes it even more challenging at predicting its future state and for that matter, the probability and severity of future liquidity crunches.

Banks try to ensure that they have sufficient liquidity to meet all relevant regulatory requirements, plus a buffer to reduce the likelihood of falling below these thresholds and trigger a regulatory or market response or create constraints on their activities. In a similar way, they try to ensure that

they have sufficient liquidity to avoid a downgrade from the credit rating agencies to a level below the bank’s target rating. More sophisticated banks also try to hold the probability of a crippling liquidity crisis to below some fraction of a percent each year, based on their internal modelling.

What is the economic value of maturity transformation?

Policymakers face a similar trade-off to the banks when setting the appropriate regulatory requirements for bank liquidity.

With very high liquidity requirements, banks will be considerably safer, all things being equal. However, the assumption doesn’t wholly apply in the real world. If maturity transformation is an important source of their profitability, then banks’ business models could become more fragile with excessive liquidity requirements, unless the added costs can be passed through to borrowers and other customers, with its own disadvantages for the economy.

More broadly, policymakers must consider the question of the social value of maturity transformation to the entire economy. If there is little added value, then the risks of bank run, and similar phenomenon would surely push regulators to set very high liquidity requirements.

On the other hand, if the social value of maturity transformation is judged to outweigh the perceived risks – as was the case during the COVID-19 pandemic – policymakers may relax banks’ liquidity requirement as we saw in many jurisdictions including Ghana.

Most analysts believe that banks allowing depositors ready access to their money, while at the same time allowing most of that money to be invested in illiquid and longterm assets is a very productive activity. This is because it allows the economy to have its cake and also eat it, providing liquidity without foregoing long-term, illiquid investments. If you were to enforce narrow banking, you would be denying the economy one of the main ways we manage to reconcile these needs. This is one of the most onerous duties of policymakers of modern times to find the right balance between the risks and benefits of maturity transformation.

Alhassan Musah, Treasurer, Stanbic Bank Ghana.

MONDAY, JULY 18, 2022

| FEATURE

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| NEWS

MONDAY, JULY 18, 2022

Talking peace in Ukraine

By Shlomo Ben-Ami The Ukraine war is being fought both on the battlefield and in the broader geopolitical context. And Russia seems to have a chance of winning on both fronts.

On the battlefield, Russia’s military machine initially showed itself to be ineffective and antiquated. But that has been par for the course for Russia ever since Napoleon’s invasion in 1812. Through a combination of barbarism and sheer numbers – “Quantity has a quality all its own,” said Stalin – Russia has generally managed to turn the tide. And, indeed, in Ukraine today, what has become a brutal war of attrition is producing slow but consistent Russian advances.

A similar shift in Russia’s favor may well be playing out geopolitically. The West’s resolve to uphold its robust values-based response is waning. Though NATO members projected unity at their recent summit in Madrid, Europe seems to be increasingly divided on Ukraine.

Eastern European countries, together with Finland and Sweden, view Russia as an immediate, even existential, threat. But for countries like Italy, Spain, and even France, more immediate security concerns lie in North Africa and the Sahel, as well as in the possibility of a new migrant crisis. And amid skyrocketing inflation and slowing economic growth, the political sustainability of economic sanctions is far from certain.

A political shift is already taking place in Italy. The two largest parties in parliament – the Five Star Movement and the Lega – oppose arms delivery to Ukraine, and have expressed their willingness to sacrifice Ukrainian territory in exchange for normal economic relations with Russia.

In Spain, the Socialistled government has been supporting Ukraine, including by sending military equipment.

But cracks are forming within the left-wing coalition, with the pacifist Podemos opposing the government’s approach.

As for France, Jean-Luc Mélenchon’s rising left and Marine Le Pen’s increasingly robust right – which together deprived President Emmanuel Macron of his parliamentary majority in last month’s election – preach a diplomatic solution that would not “humiliate” Russia.

The Ukraine war poses the most daunting dilemma for Germany. Ever since West German Chancellor Willy Brandt launched his Ostpolitik with the Soviet bloc in the late 1960s, the quest for “peaceful coexistence” with Russia and Eastern Europe has been central to German strategic thinking. This helps to explain why Germany’s energy relationship with Russia has withstood so many challenges and crises.

Beyond severing ties with Russia, the European Union has decided to welcome greater integration with Ukraine and Moldova. This decision will not only bring heavy financial costs; Russian President Vladimir Putin will most likely feel just as threatened by having the democratic EU at his doorstep as he does by NATO’s enlargement.

Putin surely knows that if Europe’s strategic shift is to be credible, it will have to increase its military power. But how long will Europeans be willing to sustain high military spending? Since World War II’s end, Europeans have enjoyed a culture of consumption and contentment – one that has left them ill-prepared

for the disruptions that would come with a shift to a war footing.

The United Kingdom is a case apart, owing not only to its military vocation and global power aspirations, but also because it is in the throes of a domestic political meltdown, with Boris Johnson – who seemed to regard the war as a useful distraction from his self-inflicted troubles – having resigned as prime minister. But this does not mean that the UK is set to turn its back on Ukraine. Though Defense Secretary Ben Wallace has announced that he does not intend to enter the contest for leadership, his status as an early frontrunner suggests that there is strong public support for the UK’s involvement in Ukraine.

Beyond Europe, the West’s campaign against Russia has not always found strong support, even among allies and partners.

Though India has deepened its strategic cooperation with the United States – together with Australia and Japan – through the Quad grouping, it has refused to join the Western sanctions on Russia, its leading supplier of military hardware.

Furthermore, US President Joe Biden’s pleas for Saudi Arabia to increase its oil production, in order to curb crude prices, have so far fallen on deaf ears. While energy policy will presumably top the agenda during Biden’s trip to the Middle East this week, it is far from guaranteed that Biden will secure the shift he seeks. His early contempt for the Kingdom’s volatile de facto ruler, Crown Prince Mohammed bin Salman, has weakened his leverage.

Even Morocco – which in 2020 received from the US recognition of its sovereignty over Western Sahara – abstained from the

March 2 United Nations vote condemning Russia’s invasion of Ukraine.

Lack of support for Western sanctions is not based exclusively on geopolitical considerations.

While the West’s campaign is hurting Russia, it is also contributing to a surge in global energy and food prices, which is hurting developing economies the most. The prospect of a devastating global recession looms. And in the longer term, the West’s weaponization of the international order it controls is likely to accelerate a decoupling process that threatens to destroy Western cooperation with – and leverage over – powers like Russia and China.

The West is not poised to achieve the kind of resounding defeat of Russia it desires – not even close. What its Ukraine policy has achieved so far is a deadlock on the battlefield – which over time will skew in Russia’s favor, with catastrophic consequences for Ukraine and beyond – and an escalating global food and energy crisis.

While the West should continue to support Ukraine, the time has come to negotiate a ceasefire and launch serious peace talks. This includes, of course, negotiations between Ukraine and Russia to decide the fate of Russianoccupied territories. (A plebiscite on the future of the eastern Donbas region is one possible outcome.) It also entails NATO-led negotiations on Europe’s broader security system.

Such an outcome is not ideal, particularly because it risks producing only a hiatus to the fighting, rather than an enduring peace. But the consequences of remaining on the current path could prove far worse.

| NEWS

MONDAY, JULY 18, 2022

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Hennessy teams up with Nico Wayo to revitalise GAEC Basketball Court As the world’s best-selling cognac, Hennessy is proud to introduce ‘In the Paint’ to Accra - a unique artistic initiative that brings the Never Stop Never Settle spirit of the brand to local communities through basketball and art.

Deeply rooted in urban culture, Hennessy’s ambition is to bring communities together.

To celebrate these values, Hennessy has collaborated with renowned Ghanaian local Artist, Nicholas Tettey Wayo (also known as NICO WAYO), to revitalize the iconic, ever busy Ghana Atomic Energy Commission basketball court in a meaningful way. The collaboration demonstrates Hennessy’s longstanding commitment towards

supporting talented artists who embody the brand’s ethos, continuing a decade of meaningful artistic collaborations.

“Everything about life is art and nothing is done without art” says Nico Way. “A nation can never be developed without art, so as an artist, I work hard to develop paintings that speak both to me and to others about the beauty that exists. “ Blending urban culture and cognac in the court design, the different shapes connecting to each other in different colours signify diverse people and cultures coming together as a team to play on one court in peace, love and unity - even though

it’s competitive. The “Adinkra” symbols each have their unique representations but the four together symbolise “Excellence”.

Every basketball and sports team should strive for excellence, as does the team at Hennessy to craft every bottle to the very best of its ability.

In the court design, Nico Wayo makes use of the Hennessy “Bras Armé” icon, but playfully redesigns it to integrate the NBA partnership with basketball in hand. The robust colors showcased throughout the design represent the energy of both the game and more importantly Africa, and the creative beat of the African people.

“From the very beginning of our global partnership with the NBA in 2021, we decided on a program dedicated to communities in order to share the joy and values of basketball with as many people as possible.

The idea of “In the Paint” was born, renovating basketball courts and entrusting this renovation to local artists.

We are geared up for the fifth instalment here in Accra Ghana.

There is tremendous support for Basketball in the country and we are looking forward to celebrating the spirit of the game together” says David White, Regional Marketing Director for Hennessy in Africa and the Middle East.

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| NEWS

MONDAY, JULY 18, 2022

Ghana government working on developing credit system – Bawumia The government is working on developing a credit system in Ghana with Credit Scoring by the Credit Reference Agencies, Vice President Mahamudu Bawumia has said.

He said key anchors such as the Ghana-Card would provide a unique identity and essential information about the bearer including bank accounts, sim card, SSNIT, NHIS and many more.

He stated that the National Digital Property Address System would also provide a definite location for the borrower, adding that the necessary measures had already been put in place to enable credit scoring.

A credit reference agency is an independent organisation that securely holds data including one’s credit applications, accounts, and financial behaviour.

The data is then used to generate a credit score, stating one’s credit worthiness, and helping to determine how much, if any premium should be put on any application for a loan or hirepurchase.

Vice President Bawumia

announced this at the opening ceremony of the 18th Biennial Connexional Youth and Students Assembly (YASA) of the Methodist Church of Ghana at Nyanyano in the Central Region on Friday.

The Vice President said what made some countries appeared more developed was the systems they had put in place to ensure life became easier and simpler, noting that, the Akufo-Addo’s administration since it assumed office had been working hard to leverage technology, to infuse digitization into everyday life for an accelerated development.

“We are changing the economy; we are changing the system.

“The reason things seem to work in the developed countries is because they have systems and institutions that work. We are the same human beings across all the continents, but they have systems that are working, and it is those systems that we are putting in place in Ghana,” he stated.

“Those systems that will make sure that you cannot hide, and you go and commit a crime, or not pay a loan, and nobody will

find you.

“The system we are putting together in Ghana is very transparent, open, it will reduce corruption, enhance the efficiency of the delivery of public services, it will reduce the cost of doing business, and reduce bureaucracy,” he added.

He said Ghana would have a credit system by the end of this year because it had linked all the bank accounts to the Ghana-Card, therefore the Credit Reference Agencies would be able to undertake credit scoring in the country.

“Credit scoring would allow every individual to have a unique

credit score. You will be able to check your own credit score with your national ID. If you are someone who does not pay back loans you will have a very low credit score and the banks will not lend you money.

“If you are someone who pays you will have a high credit score, you will have a lower interest rate, and the banks will lend you money,” Dr Bawumia explained.

“We are building this economy, this new system which will help everybody, because the old system is one where you did not have transparency, but the whole society was paying for this lack of transparency. We have high interest rates, for instance.

“But through digitisation, we have put in place the necessary systems, so that now tertiary students can get loans without guarantors. In the future, depending on your credit score, you can get a cheap loan, get essential items like fridges, cars and other household accessories on credit, and even secure mortgages,” Dr Bawumia told the gathering.

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| FEATURE

MONDAY, JULY 18, 2022

Mzansi National Philharmonic Orchestra to contribute to South Africa’s nation building Johannesburg, Thursday 14 July 2022– Today marks an important milestone in the journey of the Mzansi National Philharmonic Orchestra (Mzansi NPO) in South Africa.

The strategy and implementation plan for establishing the Mzansi NPO recognises the unique opportunity that this Orchestra presents for the transformation of the orchestral music sector in South Africa.

This is underpinned by the development of young South African orchestral talent, the creation and preservation of music which reflects South African heritage and the broadening of the experience of classical music by the diverse population in our country.

Such a national orchestra, much like a national sports team, cannot exist in isolation. In order to be sustainable, the Mzansi NPO needs to be central to a national talent recruiting, refining and retaining system; the highest level of a multi-tiered developmental process for young South Africans, of which the regional orchestras remain a critical element.

Speaking on behalf of the Mzansi NPO board of directors, Prof Muxe Nkondo, said, “We are grateful to be able to report to the Minister, the Department of Sport, Arts and Culture, and the public, on the positive progress of Mzansi National Philharmonic Orchestra.

The Orchestra is now fully constituted and embraces our responsibility to play a significant role in the cultural life of South Africa’s vibrant and diverse communities, thus contributing to a socially cohesive society with a common national identity”.

Mzansi NPO seeks to create an impact through the use of music as a medium facilitator

for building inclusivity, social cohesion, and social dialogue.

This will be achieved by: • Providing enrichment and community engagement programmes • Promoting the development of orchestral music and other genres of music, particularly indigenous music • Finding, mentoring, training and supporting young and talented musicians • Promoting the teaching, knowledge and appreciation of music • Encouraging composers of music and promoting music which reflects South Africa’s heritage • Supporting the national brand around the world by presenting events which increase the global profile of South Africa and its talent • Contributing to tourism and the growth of the creative economy Responding on behalf of the Department of Sport, Arts and Culture, the Director General, Vusumuzi Mkhize, stated, “We congratulate Mzansi NPO – South

Africa’s first national orchestra in the democratic era - for taking up the challenge of establishing an orchestra of national significance which as a result, brings to life stipulation which is contained in the Revised White Paper on Arts, Culture and Heritage. Approved

by Cabinet, 2018 and endorsed by Parliament in 2020”.

Mr Mkhize added, “We will walk this journey with you in your quest to promote freedom of expression, maintain a sense of cultural identity, nurture creativity and stimulate artistic innovation that also contributes to growth in the creative sector”.

In closing and speaking on behalf of the management of Mzansi NPO, Bongani Tembe, said, “Mzansi NPO appreciates the value and benefits of integrating music into the learning experience of our young people and will work with other orchestras and partners to achieve this objective.

Further, Mzansi NPO will be utilised as an effective tool to brand South Africa positively on the international stage”.

About

Mzansi

National

Philharmonic Orchestra Registered as a Not- for-Profit Company (NPC) in terms of Section 10 and Schedule 1 of the Companies Act (No. 71 of 2008, as amended), the Mzansi NPO has also been granted the status of a Public Benefit Organisation (PBO) in terms of Section 30 of the Income Tax Act (No. 58 of 1962, as amended). As an NPC, the Mzansi NPO operates under the supervision of a Board of Directors comprised of leading South Africans with high integrity.

Prior to its launch, Mzansi NPO conducted benchmarking on international models, including the French and Hungarian national orchestras, some audience engagement programmes employed by the Opera Theatre of Saint Louis, various studies and reports available through the American Symphony Orchestra League, and an examination of Venezuela’s “El Sistema’’ classical music instruction programme, and its offshoot initiatives, “Sistema Scotland” and Sistema Kenya.

The mission of the Mzansi NPO is to contribute meaningfully to the improvement of the quality of life of all communities in South Africa by embracing its responsibility to play a significant role in the cultural life of South Africa’s vibrant and diverse communities; creating platforms within communities for the advancement of the experience of orchestral music, including targeting regions that don’t have their own regional orchestras; inspiring young people to discover their full potential through creativity and innovation; creating world-class orchestral music experiences and touring events nationally and internationally.

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MONDAY, JULY 18, 2022

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| COMMENT/ANALYSIS

MONDAY, JULY 18, 2022

Ghana’s return to the IMF within three years underscores its deeper economic problems Ghana is again seeking assistance from the International Monetary Fund (IMF) to enable the country to meet its payments to the rest of the world and restore the health of government finances. It is the second time in the past three years and 17th since independence in 1957 that Ghana has turned to the IMF for help.

The latest foray reverses the current administration’s earlier stance that it would avoid approaching the multilateral body because of the conditions that come with its assistance. Ghana’s finance minister Ken Ofori-Atta said in May 2022 that government was “confident in its homegrown solutions such as the e-levy in getting the economy to recover … seeking a bailout from the IMF is not an option”.

Ghana’s approaches to the IMF, which have averaged every four years over the past 65 years, tell a story of recurrent failure of government to properly build the economy to withstand internal and external shocks. Ghana’s lack of fiscal discipline, and its recent history of dependence on foreign financing – with as much as 48% of the total public debt being held by external investors – leaves the country vulnerable to swings in investor sentiment, and accompanying portfolio investment selloffs.

The request to IMF also underscores the fact that Ghana has much deeper structural economic problems. These require a multistakeholder approach to resolve.

Unfortunately, the pervasive and deeply entrenched nature of the country’s Fourth Republican clientelist politics which manifests in a ‘winner take all’ approach to governance has often distorted a much-needed national debate on what needs to be done and how it must be done. Ghana must fix the structural problems – such as its over-reliance on primary commodity exports – and live within its means. As we argue in an upcoming research project, there is a greater political leaning towards shorter-term goals of maintaining regime stability or forcing a change in the regime.

Ghana came out of the last IMF programme in 2019 with some significant macroeconomic gains.

It had been forced to tap IMF assistance to deal with global and local economic shocks - the same as now. These included the spillovers of the slowdown in

China, the 2014-2017 commodities price slump, reckless spending in the lead up to often highly contested elections especially in 2012 and 2016, and a prolonged domestic electricity crisis known locally as ‘dumsor’.

Ghana’s current external shocks are related to the COVID-19 pandemic and Russia’s ongoing war against Ukraine. Internally, the government has also recklessly managed its finances with excessive borrowing, resulting in a looming debt crisis.

The country now spends about a third (27%) of its expenditures in just servicing debt alone, not including principal repayments.

This is often more than the compensation of workers on the government payroll, estimated at 26% of total expenditure in 2022.

The depth of Ghana’s mess A review of recent economic data shows why it was inevitable that Ghana would seek IMF assistance.

Real GDP growth slowed from an average of 6.9% from 20172019 to 0.4% in 2020 during the pandemic but picked up to 4.7% in 2021. The November 2021 forecast of 5.6% real growth in GDP in 2022 is likely to be lower because of rising price pressures. This is mainly driven by food and refined petroleum products due to the Russia-Ukraine war and global supply chain bottlenecks. Ghana’s inflation, as measured by a basket of goods and services, hit 29.8% in June 2022 - the highest level in 20 years.

Rising prices have forced the Bank of Ghana to raise its policy rate by 4.5 percentage points to 19% by May 2022 in an attempt to tame inflation. Commercial banks have in turn raised the rate at which they lend to businesses and individuals. The policy rate last hit 20% in January 2018 and drastically reduced to 13.5% until the recent hikes started in November 2021. The unintended consequence of stemming inflation is a potential stifling of economic activity through crowding out of the private sector by the government and high cost of capital.

In addition, the local currency – the cedi – had depreciated by almost 20% against the US dollar as of June 2022, making imports more expensive, forcing prices of goods and services upwards.

Ghana’s economic challenges have been made worse by the

country’s reliance on portfolio flows. This is the foreign money that moves in and out of countries in search of the best investment returns. Unlike money that builds factories, these flows are more sensitive to a country’s short-term economic and financial developments. Given Ghana’s significant borrowings from commercial rather than multilateral development financiers, the country has become more vulnerable to the rising cost of debt. Multilateral development institutions lend for longer at more reasonable rates.

Of Ghana’s total public debt of US$55.1 billion (78% of GDP) as of March 2022, 40.2% (US$28.3 billion) was owed to external parties. And of the external debt, about 57% was owed to commercial creditors, predominantly in Eurobonds.

To add salt to Ghana’s economic wounds, rating agencies downgraded the country’s sovereign risk scores earlier this year. This significantly limited the governmet’s ability to borrow on the international capital markets to finance the budget.

Ghana’s fiscal policymaking has shown a bias towards overspending during good times, with little being saved to help when there are downturns or external shocks.

This is largely driven by commodity price cycles - oil, cocoa and gold - and fiscal excesses during election periods.

Ruling parties often overspend ahead of elections to buy votes and then tighten the purse strings afterwards.

So, what should Ghana differently this time round?

Way forward The following could be a guide to ensure that Ghana benefits from its new deal with the IMF: • First, Ghana should use the IMF programme to negotiate some debt restructuring with commercial and multilateral creditors. The country failed to take advantage of earlier schemes like the Debt Service Suspension Initiative (DSSI).

Debt restructuring would create the space to spend on priorities such as food and fuel. However, the country must urgently reinstate the Fiscal Responsibility Act, 2018 - which was suspended during the pandemic - with the 5% cap on fiscal deficits in any given

year. It must also publish an updated medium-term debt management plan that either caps or places a moratorium on the contraction of nonconcessional loans for a while.

• Second, Ghana must implement fully any agreed structural reforms to put the economy on a sound footing.

This includes significant cuts in the largesse and waste in government and public service delivery. The President must cut the size of his government and enforce key performance targets for key socio-economic sectors such as public finances, education, energy, and health, among others. Other reforms should include the aggressive restructuring of state-owned enterprises and hiring of competent hands, removing of some, and improvements in the targeting of subsidies as well as trimming the government payroll and flagship initiatives like free secondary schooling. The government must also insist on a strong social protection element, especially for cash transfer programmes such as Livelihood Empowerment Against Poverty (LEAP) and capitation grants for public basic schools.

• Thirdly, Ghana must aggressively grow and diversify its small open economy to reduce reliance on primary commodities such as cocoa, gold and oil.

These are the major export earners for the country but are subject to significant price volatility. Ghana has a great opportunity to pursue green growth policies in new industrial clusters such as the critical minerals value chain and renewables. These can be supported by a reinvigorated Ghana Infrastructure Investment Fund (GIIF) and the Minerals Income Investment Fund (MIIF), among other players.

• Lastly, Ghanaians, especially the two main parties, must stop over politicising the economic issues. Populism is clouding effective decisionmaking. What the current crisis reveals again is the urgent need for broad-based national development plan or framework.

18

| MARKET REVIEW

MONDAY, JULY 18, 2022

WEEKLY MARKET REVIEW FOR WEEK ENDING - JULY 1, 2022 MACROECONOMIC INDICATORS Q3, 2021 GDP Growth

3.3%

Average GDP Growth for 2021

3.3%

2022 Projected GDP Growth

5.5%

BoG Policy Rate

19.0%

Weekly Interbank Interest Rate

20.66%

Inflation for February, 2022

27.6%

End Period Inflation Target – 2022

8.0%

Budget Deficit (% GDP) – Dec, 2021

2.6%

2022 Budget Deficit Target (%GDP)

7.4%

Public Debt (billion GH¢) – Dec, 2021

391.9%

Debt to GDP Ratio – Dec, 2021

78.0%

STOCK MARKET REVIEW The Ghana Stock Exchange strengthened for the second consecutive week on the back of gains by 2 counters. The GSE Composite Index (GSE CI) gained 38.17 points (+1.52%) to close at 2,545.48 points, reflecting year-to-date (YTD) loss of 8.74%. The GSE Financial Stocks Index (GSE FI) also gained 6.64 points (+0.31%) to close at 2,176.97 points, reflecting year-to-date (YTD) gain of 1.17%.

Market capitalization inched up by 5.19% to close the week at GH¢64,841.21 million, from GH¢61,643.87 million at the close of the previous week. This reflects YTD increase of 0.54%.

Trading activity recorded a total of 5,819,658 shares valued at GH¢6,556,541 changing hands, compared with 8,475,595 shares, valued at GH¢9,046,592 in the preceding week.

MTN dominated both volume and value of trades for the week, accounting, for 98.89% and 78.99% of volume and value of shares traded respectively.

The market ended the week with 2 advancers and 2 laggards as indicated on the table below.

THE CURRENCY MARKET The Cedi weakened against the USD for the week. It traded at GH¢7.2345/$, compared with GH¢7.2150/$ at week open, reflecting w/w and YTD depreciations of 0.27% and 16.98% respectively. This compares with YTD appreciation of 0.07% a year ago.

The Cedi strengthened against the GBP for the week.

It traded at GH¢8.7136/£, compared with GH¢8.8683/£ at week open, reflecting w/w appreciation and YTD depreciation of 1.78% and 6.73% respectively. This compares with YTD depreciation of 0.95% a year ago.

The Cedi also strengthened against the Euro for the week. It traded at GH¢7.5218/€, compared with GH¢7.6162/€ at week open, reflecting w/w appreciation and YTD depreciation of 1.26% and 9.22% respectively.

This compares with YTD appreciation of 3.43% a year ago.

The Cedi meanwhile weakened against the Canadian Dollar for the week. It opened at GH¢5.5918/C$ but closed at GH¢5.6016/C$, reflecting w/w and YTD depreciations of 0.17% and 15.35% respectively. This compares with YTD depreciation of 2.97% a year ago.

MONDAY, JULY 18, 2022

19

| MARKET REVIEW

BUSINESS TERM OF THE WEEK Payback Period: The term payback period refers to the amount of time it takes to recover the cost of an investment. Simply put, it is the length of time an investment reaches a breakeven point.

Source: https: //www.investopedia.com/terms/p/ paybackperiod.asp

ABOUT CIDAN

COMMODITY MARKET Crude Oil declined as concerns over slowing economic growth have outweighed a further tightening of supply.

Brent futures traded at US$111.63 a barrel on Friday, compared to US$113.12 at week open. This reflects a w/w loss and YTD gain of 1.32% and 43.52% respectively.

Gold prices fell following a tax hike on gold imports

by Indian authorities to support the rupee. Gold settled at US$1,801.50, from US$1,828.90 last week, reflecting w/w and YTD losses of 1.50 % and 1.48% respectively.

Prices of Cocoa declined for the week. The commodity traded at US$2,265.00 per tonne on Friday, from US$2,441.50 last week, reflecting w/w and YTD losses of 7.23% and 10.12% respectively.

INTERNTIONAL COMMODITIES PRICES

GOVERNMENT SECURITIES MARKET Government raised a sum of GH¢827.53 million for the week across the 91-Day and 182-Day Treasury Bills. This compared with GH¢1,441.07 million raised in the previous week.

The 91-Day Bill settled at 25.88% p.a from 25.64% p.a. last week whilst the 182-Day Bill settled at 26.57% p.a from 26.40% p.a. last week. The table and graph below highlight primary market yields at close of the week.

CIDAN Investments Limited is an investment and fund management company licensed by the Securities & Exchange Commission (SEC) and the National Pensions Regulatory Authority (NPRA).

RESEARCH TEAM Name: Ernest Tannor Email:etannor@cidaninvestments.com Tel:+233 (0) 20 881 8957 Name: Audrey Asiedua Wiafe Email:aaudrey@cidaninvestments.com Tel:+233 (0) 57 840 2700 Name: Moses Nana Osei-Yeboah Email:moyeboah@cidaninvestments.com Tel:+233 (0) 24 499 0069

CORPORATE INFORMATION CIDAN Investments Limited CIDAN House Plot No. 169 Block 6 Haatso, North Legon – Accra Tel: +233 (0) 26171 7001/ 26 300 3917 Fax: +233 (0)30 254 4351 Email: info@cidaninvestmens.com Website: www.cidaninvestments.com Disclaimer The contents of this report have been prepared to provide you with general information only. Information provided on and available from this report does not constitute any investment recommendation.

The information contained herein has been obtained from sources that we believe to be reliable, but its accuracy and completeness are not guaranteed.

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|

NO. B24/317 | NEWS FOR BUSINESS LEADERS

MONDAY, JULY 18, 2022

Ghana elected to serve on African Court panel of judges The African Union Commission at its 41st Ordinary Session of the Executive Council held in Lusaka, Zambia on July 15, elected Justice Dennis Dominic Adjei to serve a six-year term on the African Court on Human and Peoples Rights.

Justice Adjei replaces Ms. Marie-Theresa Mukamulisa from Rwanda who occupied the floating seat, in accordance with Paragraph Two of Decision EX.CL/ Dec. 907(XXVIII).

At the close of nominations, the nominees were Justice Dennis Dominic Adjei, from Ghana; Lady Justice Aua Balde, from Guinea Bissau; Lady Justice Harimahefa Ratiaraisoa, from Madagascar; Justice Pedro Sinai Nhatitima, from Mozambique and Lady Justice Marie Therese Mukamulisa the incumbent from Rwanda.

According to African Union Commission document made

available to the Ghana News Agency in Tema, there were three rounds of voting after which Justice Adjei was elected.

Ghana now has a member on the African Court of Human and Peoples Rights after Justice Sophia Akuffo, the first Ghanaian who served as a member and finally as the President of that court about six years ago.

The African Court was established by virtue of Article One of the Protocol to the African Charter on Human and Peoples’ Rights on the Establishment of an African Court on Human and Peoples’ Rights (the Protocol).

The Protocol establishing the African Court was adopted on June 9, 1998 in Burkina Faso and came into force on January 25, 2004 after it was ratified by more than 15 countries.

The mandate of the African

Court is to complement and reinforce the functions of the African Commission on Human and Peoples’ Rights (the African Commission – often referred to as the Banjul Commission), which is a quasi-judicial body charged with monitoring the implementation of the Charter.

The African Court applies the provisions of the African Charter on Human and Peoples’ Rights and other human rights instruments ratified by the States concerned. It does not have criminal jurisdiction like the International Criminal Court.

The African Court was established to complement and reinforce the functions of the African Commission on Human and Peoples’ Rights (the African Commission – often referred to as the Banjul Commission), which is a quasi-judicial body charged with

monitoring the implementation of the Charter.

Its mission is to enhance the protective mandate of the African Commission on Human and Peoples’ Rights by strengthening the human rights protection system in Africa and ensuring respect for and compliance with the African Charter on Human and Peoples’ Rights, as well as other international human rights instruments, through judicial decisions.

SSNIT/TUC regional education tour kicks off The leadership of Trades Union Congress (TUC) in partnership with the Social Security and National Insurance Trust (SSNIT) has held a meeting in Tema as part of the nationwide tour to educate regional and district leaders of the Congress about the Scheme.

In an address on behalf of the Director-General, the Chief Actuary of SSNIT, Mr Joseph Poku, said the meetings, which are being organized in collaboration with the national

executives of TUC forms part of the Trust’s efforts to improve public knowledge about its operations.

According to Mr. Poku, “engagements such as this helps to address concerns of members, clarify misconceptions about the operations of the Trust, improve transparency and accountability and enhance stakeholder buy- in.”

In his presentation, he indicated that, currently 25percent of workers on the SSNIT Scheme pay monthly contributions of GHS 55 or less.

He further noted that if these workers were to retire on the basic salaries of GHS 500 or less, they would earn a monthly pension of GHS 300.00.

He explained that pensions are a direct reflection of the basic salaries on which contributions are paid, therefore the higher the salaries on which members contribute, the higher the pension.

He also added that the longer the period of contribution, the higher the pensions right earned, therefore members who contribute for 35 years and above earn the maximum pension right of 60percent.

The data also shows that

EDITOR: BENSON AFFUL editor@business24.com.gh | +233 545 516 133.

about 66percent of workers have declared basic salaries of GHS2,000 or less to the Trust.

The Chief Actuary indicated that the pensions paid by SSNIT are only a reflection of these basic salaries workers have declared.

Contrary to public perception, Mr. Poku described the Scheme as generous arguing that, even though workers contribute 11percent of their basic salaries, the Scheme guarantees members up to 60percent of the average of the three years’ best salaries and pays them pension for life with annual increments.

Comparatively, he showed that what pensioners are receiving is better than what they would have received if they had invested their contributions in the 91-Day Treasury Bills.

“For Pensioners who have been on the Pension Payroll for 15 years, they have received more than two times what they would have received from Treasury Bills”.

The Chief Actuary encouraged participants to focus on the value the SSNIT Scheme offers and contribute on their correct salaries to enjoy enhanced pensions.

He added that SSNIT will this year rollout a comprehensive campaign

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to register self-employed persons and informal sector workers onto the Scheme. “The Trust will soon launch a SSNIT App and Mobile Money payment platform to ease doing business with members especially the self-employed.

Speaking on the sideline of the meeting, the Chairman of the GreaterAccra Regional Council of Labour, TUC, Mr. Patrick Tetteh Binyemi underscored the importance of extending the compulsory retirement age from 60 to 65 years.

He explained that there is an urgent need to consider reviewing the pension age to enable workers contribute more and enjoy enhanced pension upon retirement.

“We must also negotiate with our employers to ensure that a chunk of our earnings go into payment of SSNIT contribution to enable our members earn meaningful pension”, he added.

In his earlier submission, the Deputy Secretary-General of the TUC, Mr. Joshua Ansah, urged workers to prioritise their pension the moment they are employed, stressing that “what has gone wrong in some people’s lives must not be repeated by us”.