GCB is well positioned to return value for investor 07 - MD NEWS FOR BUSINESS LEADERS
BUSINESS24.COM.G H | WEDNESDAY, MAY 11, 202 2
Gov’t will invest heavily to safeguard cyberspace, says 03 Ursula
NHIS now hangs in the balance, minority alleges By Eugene Davis
The Ranking Member of Parliament’s Select Committee on Health, Kwabena Mintah Akandoh, has cautioned government that the National Health Insurance Scheme risks collapse if allocations and resources are not provided consistently. Addressing a press conference in Accra on Tuesday, he stated: “The National Health Insurance Scheme is collapsing not because of inadequate funds or inadequate
legislation but purely as the result of poor public financial management of the fund.” He added: “Although the scheme has struggled since its inception to meet claims of active members from service providers, the recent misapplication of funds collected as levies and SSNIT contributions for other government projects in addition to increases in non-core activities of the fund has placed the fund into medical comatose.
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Farmers get 10,000 Coconut seedlings to support 1D1F 03 initiative
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News/Editorial
Let’s enforce compliance to decent labour conditions in Ghana’s fisheries sector Findings from a recent report on labour conditions in the fisheries sector showed that about 97percent are grossly exposed to improper treatment from their employers as most of these industrial fishers do not have contracts with same for the semi-industrial sector. The study that examined labour conditions and safety concerns of fishers in Ghana’s artisanal, semi-industrial and industrial sectors also revealed several violations in relation to compliance to Ghana’s labour laws, a situation it said must be tackled immediately. A key recommendation from the report was the need for skilled manpower in the domestic fisheries business to engender decent labour practices across the value chain and to sustain the industry. Business24 understands that the Regional Maritime University (RMU), previously Nautical College, has for a long time stopped training human resources for the domestic fisheries industry, meanwhile, the few that have been
trained are now out of the country and its one of the reasons why foreigners have a strong hold of the local fisheries industry. The tuna industry, for instance, could collapse should foreigners opt out of the business because of the absence of Ghanaians at the top echelon of the industry, according to industry experts and actors. The fisheries sector is a vast economic area that must be given critical attention by government and state agencies working within that space. We are talking a natural resource that provide about 60percent of animal protein to the people. It’s both a livelihood and security issue and so its sustenance should be in the hands of the indigenes. It is time for state watchdogs and regulatory bodies to pay attention the concerns that have been raised in this report particularly that aspect of safety and decent work conditions for our fisher-folks and the time is now!
NHIS now hangs in the balance, minority alleges
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Parliament before it went on recess earlier this month, approved an allocation formula worth GH¢2bn but in approving the NHIF, parliament’s health committee was informed about government’s policy to cut the expenditure by 30percent from GH¢3.6bn to GH¢2.6bn. During deliberation on the formula however, the health committee objected to the cut as it was not in line with the general 20percent expenditure cut announced by government. The allocation was reviewed and the 30percent cut was eventually reviewed to 20percent as requested by the committee. Mr. Akandoh also argued that the mandate of the state insurance scheme has changed over the years from the 2003 financing
of basic healthcare services to persons resident in the country to the 2012 objective of providing universal health insurance coverage for all residents and persons on a visit to the country. “Every health insurance scheme requires a constant flow from its funding streams and elbow room to invest a portion of its inflows if it were to stay viable, whilst meeting its mandate,” he stressed. Furthermore, Mr. Akandoh, who is the Member of Parliament for Juaboso, accused the government of undermining the objective of the NHIS and adds that there is a concerted effort to build arrears into the future by paying very little to cover current claims on the fund. This situation, he said, is
untenable and, if not addressed, could accelerate and gradually collapse the fund. “Because the government has failed to transmit NHIL funds collected from Ghanaians into the NHIF, the fund has resorted to disinvestment or withdrawals from its investment fund to deal with current liabilities. This has resulted in a situation in which an investment fund that had GH¢104.32 million as the closing balance for 2014 reduced to as low as GH¢80.13million in 2020 with interest income following the same trend of reducing from GH¢21.7million to GH¢5.18million in 2020,” he said. The minority also stated at the presser that the mismanagement of the NHIS is affecting the survival of health facilities that offer treatment to national health insurance cardholders. “As of the end of March 2022, service providers were owed over GH¢2.5bn due to non-payment of claims filed as far back as July 2021. If you consider the fact that we are experiencing a hyperinflationary period with March inflation yearon-year being reported to have inched closer to 20% one wonders how service providers who are owed as far back as last year are supposed to manage to keep their businesses afloat,” he noted.
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Gov’t will invest heavily to safeguard cyberspace, says Ursula Government is keen to ensure that the digital economy is safeguarded for younger ones and to promote more investment in the country. To this end, there will be more investment through education campaigns with faith based organisations on internet safety in both urban and rural communities in all the sixteen regions. Minister for Communications and Digitalisation, Ursula OwusuEkuful made the disclosure in a keynote speech to climax the Bono regional Girls in ICT programme in Sunyani. According to her, the theme for this year’s programme “Access and Safety” is an indication of the attention that government is giving to digital safety since the economy is growing digitally. She therefore assured participants that more digital equipment will be provided for various schools to use as well as
ensuring that there is adequate safety for users online. This is to ensure that the country attracts the best form of investments in the future. “Digital tools have become pivotal in the new emerging world and we can’t afford to leave the girls behind. This year marks ten years since the beginning of the initiative globally and in Ghana, our target for the first time is to do this in 5 regions; it has never been done before. Our objective is to train STEM teachers in basic ICT, coding and among others. Digitalisation is the game changer and government is determined to grow the digital economy at all cost through the provision of modern technology,” she said. To sustain the GIICT programme, the Minister encouraged the Regional Coordinating Council (RCC) to take ownership of the programme
and continue the process to benefit more girls. She also called for the establishment of coding clubs in all schools to encourage the less privilege to take advantage of the initiative and make them digital genius.
Bono Regional Minister, Justina Owusu-Banahene, thanked the minister and her team for organizing the event in the region and called for more of such initiatives to improve the digital skills of students in the region.
Farmers get 10,000 Coconut seedlings to support 1D1F initiative By Sampson Manu The Akrofuom District in the Ashanti Region is positioning itself to take advantage of the government’s flagship program, One District One Factory, by making raw materials readily available for potential investors. This was revealed by the District Chief Executive for Akrofuom Mr. Maurice Jonas Woode, when he joined the Member of Parliament for the area Mr. Alex Blankson to distribute 10,000 Coconut seedlings to 250 farmers in the district. The assembly through its efforts to woo investors to the district had earlier distributed 4,000 Coconut seedlings as well as over 80,000 oil palm seedlings freely to farmers in the district as part of the Planting for Exports and Rural Development (PERD) program. According to the DCE, the assembly through the PERD programme is seeking to create sustainable raw material base to spur up the decentralized industrialization drive of the government through the ‘One District, One Factory’ initiative. He said “ factories could not run without raw materials, hence the assembly is focusing on readying raw materials like Coconut and Oil Palm for potential investors”
Youth Must develop interest in Agriculture Mr. Woode expressed delight in the number of youths who turned up to receive the Coconut seedlings. He said the time has come for the youth to accept the enormous benefit in agriculture. He mentioned that youth involvement in agriculture will ensure sustainability. He said “ we cannot always rely on mining to survive. I want to encourage the youth of this district to take advantage of the plethora of agric-related programs introduced by this government . This will empower them economically and make them self-reliant”. PERD will serve as alternative livelihoods to illegal mining The Member of Parliament for Adansi Akrofuom, Mr. Alex Blankson, said the assembly through PERD will support the government’s alternative development livelihood programme to offer alternative sources of income for people who were once engaged in illegal mining. He said currently the hitherto arable lands at Akrofuom has been depleted through the activities of illegal miners. He said
‘galamsey’ activities will not bode well for the future of the youth hence the need to take advantage of the free coconut seedlings by the assembly and go into coconut production. “ If you have 2 acres of land, we will give you 140 seedlings and if 1 tree gives you 200 nuts, in a year, you will have in excess of GHc 28, 000 as profit so I urge the youth to get involved and be economically independent”. He stressed that the implementation of the programme would reduce poverty and improve livelihood in the district. The District Director of Agric, Richard Kwaku Nyamekye, lauded the efforts by the DCE and MP to get the seedlings readily available
for farmers. He urged them to continue to support agricultural development in the district. He also disclosed that his outfit will deploy technical officers to the farms of the beneficiaries to assist them with fertilisation, early weeding and other technical aspects needed by the farmers to improve their yield. More women needed in Agriculture Anastasia Serwaa, a farmer and a beneficiary talked about the benefits of agriculture and advised women to develop interest in Agriculture. She said “ women face a lot of challenges including stereotyping when we go into Agriculture but I urge women to be resolute”.
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Vodafone Ghana Foundation celebrates survivors of domestic violence on Mothers’ Day Vodafone Ghana Foundation, the charity arm of Vodafone Ghana has celebrated domestic violence surviving mothers at the Ark Foundation in Accra. The event forms part of activities to commemorate Mothers’ Day. The Foundation through its monthly Birthday Stars initiative held free medical screening, eye check-up and ultrasound scan for the women. Addressing the gathering, the Human Resource Director, Hannah Ashiokor Akrong, condemned violence against women. “Violence against women is still on the rise and it is one of the most widespread, persistent and devastating human rights violations in the world today. No nation can hope to move forward if its women and children are trapped in an endless cycle of emotional and physical abuse. In solidarity with all our sisters facing domestic abuse in all forms across the world, we commemorate this day in your honour”. “This is somet1hing Vodafone has done over the past several years through its working relationship with the Ark Foundation. In 2020 during the pandemic, a time we experienced a global rise in domestic abuse, Vodafone Ghana staff and the Vodafone Ghana Foundation
banded together to show our support for the shelter through a donation of One Hundred and Twenty Thousand cedis (GHS120,000). Today I am very honoured that we are continuing to strengthen this partnership through this activity”, she said. According to Head of Vodafone Ghana Foundation, Rev. Amaris Nana Perbi, kids of the mothers of domestic violence will be taken through the Instant School platform to ensure they have quality education. He assured of Vodafone Ghana foundation’s support to the Ark foundation to enable it to
function properly and serve more survivors. The South African High Commissioner to Ghana, Ms Grace Jeanette Mason, advised women to get out of abusive relationships. “To women that stay in abusive relationships I would say to them that don’t allow yourself to be abused. And for whatever reasons, if you find yourself in relationships for love or for whatever reasons, you need to stand up for yourself. Don’t allow yourself to be abused. Moreover, don’t let your body be abused because your body is it’s God’s temple. Also, those men that are abusive, can you be
confident enough and deal with your insecurities and low selfesteem”, she said. Earlier, Executive Director of the Foundation, Dr Angelina Dwamena-Aboagye called on Ghanaians to support victims of domestic violence. The Ark Foundation offers to vulnerable, distressed and abused persons, in particular women and children, compassionate care and empowering spaces to live without fear of violence or oppression from others and to find strength, dignity and hope for life.
Huawei attracts global talent to tackle worldclass challenges Huawei is looking for the world’s top ICT talent to support its strategy for innovation and building a greener intelligent world. At a recent event, Ken Hu, Huawei’s Rotating Chairman said, “At Huawei, when we talk about innovation, the first thing we think is people. We hope to attract world-class talent with world-class challenges, and work together to push the limits of science and technology. “ Hu was referring to the Top Minds recruitment program that the company launched on its website earlier. “We don’t care where you’re from, where you graduated, or what you studied,” he continued. “As long as you have a dream for the future and believe you can make it happen, we want you to come and join us. We provide world-class challenges, a powerful
platform, and all the resources you need to explore the unknown.” Sub-Saharan Africa ICT Talent Locally, Huawei continues its global recruitment strategy, targeting the continent’s top ICT talent, skills training and transfer and creating more jobs in the ICT sector through collaboration with various stakeholders. In April, Huawei launched its digital skills development programme LEAP in Sub-Saharan Africa, to help advance the ICT skills of more than 100,000 people across the region within three years. Launching the LEAP programme, Huawei Southern Africa President, Leo Chen said, “Through the programme, we strive to cultivate more youth leaders in ICT, who can explore more possibilities for themselves, their families, community and ultimately their nations.”
Over the past two decades, Huawei has helped advance the ICT skills of more than 80 000 people across the region. Huawei itself is an employer of choice in the region. Its subsidiaries in 9 Sub-Saharan African countries earned the Top Employer seal in 2021. Despite facing pressure, the company believes it is more capable of dealing with uncertainty. Huawei achieved USD99.8 billion in revenue in 2021, with increased cash flows and decreased liability ratio. Huawei remains among the top
telecom brands in the Global 500 top brands list, released in March 2022 by Brand Finance, a well-known British independent consultant. “Innovation has become a core part of Huawei’s DNA,” concludes Ken Hu, “For nearly a decade, our strategy has been to re-invest at least 10% of our annual revenue back into R&D. Last year, we invested 22%.” This makes Huawei the world’s second highest investor in R&D according to the EU’s 2021 EU Industrial R&D investment scoreboard.
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MIIF revisits Agyapa Royalties listing on stock exchange The Minerals Income Investment Fund (MIIF) is redesigning its strategy to list its wholly-owned subsidiary, Agyapa Royalties, on the London Stock Exchange and the Ghana Stock Exchange. The listing of Agyapa on the London Stock Exchange has been slated for the last quarter of this year. The MIIF has been adjudged the best financial institution in the mining sector by France-based publication, Forbes Monaco. Forbes took cognisance of MIIF’s strategic acquisition of over 14 million shares and about 4.65 per cent stake in Asante Gold Corporation, a Canadian and Frankfurt-listed gold producing company which operates in Ghana. The acquisition, together with the government’s carried interest and existing Ghanaian shareholders, would increase shareholding to more than 25 per cent, the first the multilisted international gold mining company has invested in the country. Asante is currently in negotiation with Kinross Chirano to acquire 90 per cent of the Chirano Mine which will further increase Ghanaians’ stake in the gold mining sector. Agyapa is a gold royalties
company, 100 per cent owned by the Minerals Income Investment Fund. The Chief Executive Officer (CEO) of MIIF, Edward Nana Yaw Koranteng, said the intention of the company was to list up to 49 per cent of Agyapa on the London Stock Exchange and the Ghana Stock Exchange. “We envisage raising between $450 million to $700 million from the initial public offering (IPO) which proceeds shall be invested in infrastructure and other social amenities, particularly in mining communities. “Agyapa, being incorporated in the UK and listed on the London Stock Exchange, provided the opportunity to leverage its balance sheet to raise cheaper funding with less obstacles to further invest in other royalty companies and leading gold mining companies across the
globe with Ghanaians as ultimate beneficiaries”, he said. Mr Koranteng also expressed the confidence that in view of current geopolitics, global economic recessionary trends and demand for gold and equities of gold royalty companies, Agyapa’s market value upon listing would shoot up. By listing on the London Stock Exchange, he said, “we will achieve the highest levels of transparency and control required for any listing in the world.” “We are ready to engage all stakeholders on how we move Agyapa listing forward after responding to all the issues raised by Parliament,” Mr Koranteng said. “The proposed programme which would inject over $400 million into the small-scale mining sector over a period of 10 years is in line with actualising President
Nana Akufo Addo’s vision of formalising the smallscale mining sector, encouraging environmentally sustainable mining and creating Ghanaian gold mining champions,” Mr Koranteng said. “We are determined to build Africa’s biggest Minerals Fund with $500 million assets under management (AUM) by 2025 and $1 billion by 2027,” he said, adding that the company had an exciting pipeline of projects and a plan to invest for the country’s future. Mr Koranteng further said that MIIF’s $20 million investment in Asante Gold, operators of the Bibiani Mensin Gold mine, would see an uptick following the pouring of first gold in the third quarter of this year. MIIF is a sovereign minerals fund mandated by the amended Minerals Income Investment Fund Act 2018, (Act 978), to maximise the value of dividend and royalties income accruing to the country in a beneficial, accountable and sustainable manner. It is also to monetise the country’s mineral wealth in a manner which will bring longterm value to Ghana. MIIF has 100 per cent ownership of Agyapa Royalties Company, the only state-owned gold royalties company in Africa.
GCB is well positioned to return value for investor - MD
The Managing Director of GCB Bank PLC, Mr. Kofi Adomakoh, says the focus of the Bank is driving revenue. He said having laid a strong foundation and tightening risks,
the Bank is well positioned to return value for investors. Speaking at an investors’ call last Friday, Mr. Adomakoh disclosed that credit underwriting standards have been tightened. The engagement with investors of the Bank was facilitated by Databank Financial Services Limited and IC Securities (Ghana) Limited The Management of the Bank used the opportunity to explain policy and strategic direction of the GCB and its performance. GCB Bank posted impressive financial results with profit before income tax increasing by 34 per cent in 2021. Growing from GH¢ 602 million in 2020 to GH¢810 million last year. GCB Bank also increased its total asset from GH¢15.5 billion in 2020 to GH¢18.3 billion in 2021, representing a growth of 18 per cent.
The Management of the Bank had at the end of April 2022 made appearance at the “Facts Behind the Figures” programme organized by the Ghana Stock Exchange. Mr. Adomakoh explained that the Bank’s strategic ambition is to be the dominant player in the market and the best by every measure anchored around three strategic pillars of revenue growth and profitability, operational excellence, people and talents. The Deputy Managing Director of Finance, GCB Bank, Mr Socrates Afram, explained that an integral part of the Bank’s performance was driven by real growth in its deposit base. He said GCB would embark on aggressive deposit mobilization drive and that the requisite personnel and other resources have been engaged and procured to achieve this objective.
Mr. Afram reiterated that the Bank would work hard to keep cost under control saying, “GCB remains very solid and sound bank.” He said the Bank would keep clean and positive balance sheet and improve on customer experience. The Deputy MD in charge of Operations, Mr. Emmanuel Odartey Lamptey, announced that the Bank is making inroads in the mobile money transfer business with the introduction of the G-Money. Present at the programme included the Executive Director, Wholesale and Investment Banking, Mr. Samuel Kwame Aidoo, Executive Head, Retail Banking, Mr. John Adamah, Chief Digital and Marketing, Mr. Eric Coffie, the Financial Controller, Mr. Kwasi Osei Bobie and others.
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UBA strongly positioned for sustained growth, says MD By Patrick Paintsil Vigorous investments into tech-based innovations, tailored products and robust performances amid the resurging pandemic years have repositioned United Bank for Africa (UBA) on the path of sustainable growth, a new journey that will create more value to its customers and investors. To this end, the bank says it remains committed to spearheading efficiency in both process and cost with streamlined operations that offer superior service experience and ensure value for money. “The year 2022 presents enormous opportunities to consolidate the gains made in the past; we will work to strongly transform our banking operations and processes as we keep building a global bank,” Managing Director, Chris Ofikulu, said at the bank’s annual general meeting in Accra. He added: “Our focus is to elevate customer service to an excellent level, especially in a highly
competitive service industry with homogenous products and near similar technology.” According to Mr. Ofikulu, the bank will also adhere strictly to regulatory and internal corporate and compliance guidelines policies to ensure tolerance for infractions as well as build and maintain strong key stakeholder relationships across board. “As a bank, we remained steadfast in the review year to confront all the challenges and
worked assiduously to deliver sustainable long-term value to all stakeholders,” he said of the impressive performance. UBA impressively grew its balance sheet by 36percent from GH₵3.95m in 2020 to GH₵5.37m in the year under review whilst customer deposits surged by over 46percent to GH₵4.1bn for same period amid the resurging pandemic. Prudent, efficient and effective risk management measures that
were implemented by the bank also drove down non-performing loans drastically from 44.3percent in the year before to 29.4percent in 2021. There was also growth in the areas of total assets and shareholders’ funds which hit GH₵5.373m and GH₵1.032m respectively from GH₵3.950m and GH₵993m in the previous year, and recorded a profit after tax of GH₵141.7m.
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Beaming up solar power for energy security By Rodney Nkrumah-Boateng When several parts of the country lost power on Saturday evening, I braced myself for a deluge of calls and text messages enquiring just what was going on. I was not disappointed, but for quite some time I was in the dark too (pun intended) and had to reach out to senior officials at the Power Directorate of the Energy Ministry for answers. They, in turn, had to rely on field reports from GRIDCo. Apparently, there had been some system trips which led to some stations being shut down in order to avoid a total system collapse. Mercifully, the interruption did not last too long, but it was long enough for me to summon an excuse to step out for some fresh air, a cold drink and some good music at Veggies and Grills, an eatery and bar not too far from my home in Kwabenya. Quite a number of people appeared to have sought temporary refuge in this oasis of power. Solar blessings Quite a few of the messages I received on Saturday evening bordered on why we do not appear to be tapping aggressively into the most obvious, available and free source of power – solar. Of course, this makes sense for a country situated so close to the equator and which enjoys sunshine – perhaps too much of it – throughout the year. With demand on power increasing by the year due to population growth, industrialisation and growing access to power, among others, sole reliance on traditional power sources is no longer wholly viable, as it requires a great deal of investment in generation, transmission and distribution systems to keep up with the increased demand.
In any event, the wider issue of renewable energy has become quite a big global conversation topic in recent times and the trajectory is towards cleaner sources of energy, such as solar and wind power. In 2020, for instance, according to www.ec.europa.eu, renewable energy sources made up 37.5 per cent of gross electricity consumption in the EU, up from 34.1 per cent in 2019. The share of renewables in gross final energy consumption stood at 22.1 per cent in the EU in 2020, compared with 9.6 per cent in 2004. Solar power already provides an important contribution to the European energy mix, with 3.6 per cent of EU-28 gross electricity generation in 2017 (source: Eurostat). Based on current market trends, BloombergNEF estimates that solar has the potential to meet 20 per cent of the EU electricity demand in 2040. Challenges From what I gather, while sunshine is of course free, it costs quite a bit for the systems that tap into it, store it and convert it into energy. A typical domestic unit for an average, three-bedroom house with the most basic appliances and gadgets can set one back by a cool GH¢230,000 for a 10kWp depending on the brand of the Balance of System and the cost of installation. The batteries (Lithium Ion) alone, which can last up to 10 years, can create a hole in one’s bank account to the tune of about GH¢50,000 for a 5kWh capacity, apart from allied professional services. While the cost upfront is quite steep, over a period of time it just about works out cheaper than regular electric power.
The rub, however, is the affordability, which hampers access in the first place. Perhaps another challenge is the fact that while Ghana is quite a hot country, the sun does not burn 12 hours a day all year round, which then raises issues of dependability, as it may not always be possible to store sufficient solar energy for use. The reality, thus, is that it may not be prudent to go solely solar so that one can switch between solar and electric as the need arises, which is much better than relying solely on either source. Another limitation is insufficient experience in renewable energy development. Power sector entities, regulators, financiers, domestic investors, and national technology and service providers appear to have limited knowledge and experience in the development and deployment of renewable energy technologies. For some technologies, there is difficulty in obtaining equipment and spare parts, poor operations and maintenance of facilities and a lack of infrastructure to support usage. Solar agenda As part of its drive towards renewable energy, Ghana has set a target of 10 per cent renewable energy contribution in the National Energy mix by 2030 and has engaged in a number of projects in order to meet this target. On the solar front in particular, there is an ongoing development of a 200 MW out of the 250MW Solar Park by Bui Power Authority at the Bui Generating Station enclave in the Savannah Region of Ghana, which is expected to be completed by the end of 2022. In addition to this is a 75-150MW wind park and 35MW solar facility by the VRA within the Nadowli-Kaleo District and Lawra
Municipal. The Meinergy Solar project (20MW) was rolled out in 2017, while the VRA Solar Lawra/Kaleo project (19MW) came on stream in 2021. The government, under the SREP (Scaling Renewable Energy Programme) in collaboration with the Ministry Energy, is also investing in 35,000 Solar Home Systems (SHS) for off-grid communities, and the Jubilee House Solar Project Phase II is expected to put the seat of the presidency on solar power with 912KW. Again, 12,000 Net Metering Systems and about 1,000 Solar Systems are to be deployed to public institutions like the Jubilee House project. Affordability Beyond large-scale solar generation through solar farms and similar projects at state level, it is equally important that individuals and small businesses are able to install solar systems in their homes, offices and places of business in order to relieve pressure on the grid and also provide them with an independent source of power, particularly in the event of incidents similar to what happened last Saturday. I believe that through import duty waivers, tax breaks and other measures on the financial side, and active facilitation and scaling up of technical expertise and training systems, among others, on the systemic deficiency end of the equation, solar energy will soon become a commonplace domestic reality. Solar power holds great potential for our energy security agenda, and nature has already gifted us the first factor in abundance. Rodney Nkrumah-Boateng, E-mail: rodboat@yahoo.com
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A better globalization might rise from hyper-globalization’s ashes By Dani Rodrik The post-1990s era of hyperglobalization is now commonly acknowledged to have come to an end. The COVID-19 pandemic and Russia’s war against Ukraine have relegated global markets to a secondary and at best supporting role behind national objectives – in particular, public health and national security. But all the talk about deglobalization should not blind us to the possibility that the current crisis may in fact produce a better globalization. In truth, hyper-globalization had been in retreat since the global financial crisis of 200708. The share of trade in world GDP began to decline after 2007, as China’s export-to-GDP ratio plummeted by a remarkable 16 percentage points. Global value chains stopped spreading. International capital flows never recovered to their pre-2007 heights. And populist politicians openly hostile to globalization became much more influential in the advanced economies. Hyper-globalization crumbled under its many contradictions. First, there was a tension between the gains from specialization and the gains from productive diversification. The principle of comparative advantage held that countries should specialize in what they were currently good at producing. But a long line of developmental thinking suggested that governments should instead push national economies to produce what richer countries did. The result was the conflict between the interventionist policies of the most successful economies, notably China, and the “liberal” principles enshrined in the world trading system. Second, hyper-globalization exacerbated distributional problems in many economies. The inevitable flip side of the gains from trade was the redistribution of income from its losers to its winners. And as globalization deepened, redistribution from losers to winners grew ever larger relative to the net gains. Economists and technocrats who pooh-poohed the central logic of their discipline ended up undermining public confidence in it. Third, hyper-globalization undermined the accountability of public officials to their electorates. Calls to rewrite globalization’s rules were met with the retort that globalization was immutable and irresistible – “the economic
equivalent of a force of nature, like wind or water,” as US President Bill Clinton put it. To those who questioned the prevailing system, UK Prime Minister Tony Blair responded that, “You might as well debate whether autumn should follow summer.” Fourth, the zero-sum logic of national security and geopolitical competition was antithetical to the positive-sum logic of international economic cooperation. With China’s rise as a geopolitical rival to the United States, and Russia’s invasion of Ukraine, strategic competition has reasserted itself over economics. With hyper-globalization having collapsed, scenarios for the world economy run the gamut. The worst outcome, recalling the 1930s, would be withdrawal by countries (or groups of countries) into autarky. A less bad, but still ugly, possibility is that the supremacy of geopolitics means that trade wars and economic sanctions become a permanent feature of international trade and finance. The first scenario seems unlikely – the world economy is more interdependent than ever, and the economic costs would be huge – but we certainly cannot rule out the second. Yet, it is also possible to envisage a good scenario whereby we achieve a better balance between the prerogatives of the nationstate and the requirements of an open economy. Such a rebalancing might enable inclusive prosperity at home and peace and security abroad. The first step is for policymakers to mend the damage done to
economies and societies by hyper-globalization, along with other market-first policies. This will require reviving the spirit of the Bretton Woods era, when the global economy served domestic economic and social goals – full employment, prosperity, and equity – rather than the other way around. Under hyperglobalization, policymakers inverted this logic, with the global economy becoming the end and domestic society the means. International integration then led to domestic disintegration. Some might worry that emphasizing domestic economic and social objectives would undermine economic openness. In reality, shared prosperity makes societies more secure and more likely to countenance openness to the world. A key lesson of economic theory is that trade benefits a country as a whole, but only as long as distributive concerns are addressed. It is in the self-interest of well-managed, well-ordered countries to be open. This is also the lesson of actual experience under the Bretton Woods system, when trade and long-term investment increased significantly. A second important prerequisite for the good scenario is that countries do not turn a legitimate quest for national security into aggression against others. Russia may have had reasonable concerns about NATO enlargement, but its war in Ukraine is a completely disproportionate response that will likely leave Russia less secure and less prosperous in the long
run. For great powers, and the US in particular, this means acknowledging multipolarity and abandoning the quest for global supremacy. The US tends to regard American predominance in global affairs as the natural state of affairs. In this view, China’s economic and technological advances are inherently and self-evidently a threat, and the bilateral relationship is reduced to a zero-sum game. Leaving aside the question of whether the US can actually prevent China’s relative rise, this mindset is both dangerous and unproductive. For one thing, it exacerbates the security dilemma: American policies designed to undermine Chinese firms such as Huawei are likely to make China feel threatened and respond in ways that validate US fears of Chinese expansionism. A zerosum outlook also makes it more difficult to reap the mutual gains from cooperation in areas such as climate change and global public health, while acknowledging that there will necessarily be competition in many other domains. In short, our future world need not be one where geopolitics trumps everything else and countries (or regional blocs) minimize their economic interactions with one another. If that dystopian scenario does materialize, it will not be due to systemic forces outside our control. As with hyperglobalization, it will be because we made the wrong choices.
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‘Going Green’ helps us to prepare for future shocks By Dr. Afua Asabea Asare & Pamela Coke-Hamilton As firms rebuild from the pandemic’s devastation, it is necessary now more than ever, to reinforce their ability to cope with future shocks – especially the growing climate crisis. By ‘going green’ companies can improve their resilience and be more competitive, according to research we have carried out at the International Trade Centre (ITC). They can better manage risks brought by climate change while taking advantage of green economic opportunities, at home and through cross-border trade. Making companies more resilient to shocks reflects what we have learned from the experience of firms during the pandemic. Our data shows that resilient firms were five times less likely to lay off workers and more likely to have stable sales. One of ITC’s strategic priorities or ‘moonshots’ aims to improve the climate competitiveness of micro, small and medium sized enterprises (MSMEs) in developing countries. By doing so, we will equip MSMEs to better respond to risks and ensure that trade contributes to creating inclusive, sustainable and prosperous economies. But companies, especially MSMEs, need partners in this transition. Key among these are trade promotion organizations. Through the daily work they do with businesses, trade promotion organizations can empower a green recovery. A 20-point Green Recovery Plan set out in our recent flagship report, the 2021 SME Competitiveness Outlook, helps to point the way. We call for trade promotion bodies to embrace sustainability. They can develop their expertise to help SMEs to transition to a low-carbon economy and work in partnership with government and businesses to encourage green growth initiatives. They should also advocate on behalf of small firms in green trade. They can build local support ecosystems; facilitate SME finance by being a trusted intermediary;
and use training and innovation to strengthen the capacity of SMEs to go green. Such efforts are crucial for SMEs, which account for more than 50% of jobs and greenhouse gas emissions. Small firms in developing countries are more worried about climate change but less likely to take action to prepare for it, according to our research. For example, 68% of small firms in sub-Saharan Africa view environmental risks as significant, compared with 54% in developing countries, our surveys show. Nonetheless, just 38% of small firms act to reduce environmental risks, compared with 60% of large firms. When they do act, companies reduce waste, invest in renewable energy, and make green products and services, gain green certification and go digital. And these moves often pay off. Nearly 60% of African companies that greened their enterprises said this led to new, higher-quality products, access to new markets or lower input costs, according to ITC surveys. They were also in a better position to tap the growing pot of green finance. Such experiences will be on the agenda at the 13th World Trade Promotion Organizations Conference in Accra, Ghana this month (17-18 May) under the theme, Bold Solutions for Resilience and Recovery. Hosted by the Ghana Export Promotion Authority and ITC, the discussions will reflect on how sustainability is both a survival imperative and a business opportunity. The link between Gross Domestic Product and natural resources is the focus of talks with the Cambridge-based economist Sir Partha Dasgupta. I am pleased to be leading one of the plenary sessions on global business trends, including the green transition with the CEO of Renetech, a major renewable energy technologies firm. We’ll also explore how to scale up initiatives that national trade
From Left: Dr. Afua Asabea Asare, CEO of GEPA; & Pamela Coke-Hamilton, Exe. Dir., ITC
bodies are already carrying out around sustainable solutions for adaptation and growth. For example, Export Barbados will show how it is shifting the country’s economy towards life science-based exports. It will also discuss its sustainability certification efforts linked to Caricom trade agreements, which raise revenue and credibility. Procomer, the Export Promotion Organization of Costa Rica, will highlight its integration into its country’s sustainable development strategy. Costa Rica received the United Nations Champions of the Earth Award for policy leadership in 2019, which singled out the country’s drive to combat climate change. RVO, the Netherlands Enterprise Agency, will discuss how the country’s trade promotion, investment and development cooperation efforts increasingly emphasize sustainability – and how it is important to be coherent in its choices. Matrade, the Malaysian trade promotion body, is helping to reposition the country as a source for sustainable products and services, with a new marketing support programme for green exporters. We’ll also be providing awards
to initiatives that are sustainable, digital and partnership-based during the event. By working together to promote the green transition and sustainable trade, trade promotion bodies, businesses and governments can ensure that companies are resilient enough to cope with future shocks.
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| NEWS
WEDNESDAY, MAY 11, 2022
Dr Grace Bediako chairs Ghana Statistical Service board The Governing Board for the Ghana Statistical Service (GSS) has been sworn in with call to promote the effective use of statistics and stimulate research activities. They were also to provide guidance to the Government Statistician and the government in the areas of official statistics to guide Ghana’s growth and development. A Deputy Minister of Finance, Dr. John Ampontuah Kumah, who gave this charge, at the inaugural ceremony of the seven-member board for the GSS said, the country depended strongly on statistical service, to generate timely data to report on the Sustainable Development Goals and African Union Agenda 2063. He commended GSS for embarking upon the Annual Household Income and Expenditure Survey (AHIES), that would soon provide the country with data on quarterly Labour Force, Quarterly Multidimensional Poverty and Vulnerability Status. The Deputy Minister expressed appreciation to the immediate past Board for their wonderful guidance that had culminated in the conduct of the first digital census in Ghana.
“We were impressed with the release of the Provisional Results within 44 days of completing field data collection. Now we are guided by the most current data in doing analysis in the Ministry”. He said. Ghana, he noted, was fast recovering from the impact of COVID-19 per quarterly and annual GDP growth rates released by the Statistical Service and assured that “Government would continue to lead the staff to provide high quality statistics to guide the country’s growth and development as outlined in the Coordinated Programme for Economic and Social Development Policies”. He also revealed that a significant amount of money was spent on the 2021 Population and
Housing Census and pleaded with them to make the best use of the remaining resources, as other efforts to financially strengthen the Service could be considered. The Governing Board of the Ghana Statistical Service (GSS) was established in accordance with Section 5 (2) of the Statistical Service Act, 2019: Act 1003 which mandates the President of the Republic, in consultation with the Council of State to appoint members of the governing board of GSS. Dr. John Ampontuah Kumah, therefore entreated the governing board to work towards expanding the establishment post, of the Service by ensuring experienced Senior officers lead the production of statistics and supervise the preparation of a suited Scheme of Service. Others included guiding the conduct of all the censuses and surveys outlined in the harmonizing and improving statistics in West Africa Project for the next three years, facilitating work within the National Statistical System and initiating the process for the drafting of the Legislative Instrument for the Statistical Service Act, 2019: Act 1003. This board, he noted, was
relatively small and comprised of individuals with professional and diverse experience in statistics production and human resource management, and he admitted that those two important abilities were required in the transformation agenda initiated by the previous Board. In her remarks, Dr. Grace Bediako, Chairperson of the governing board, assured that the assembled team with vast experience and an impressive track record would seek to further improve the service’s image. She expressed gratitude to the President of the Republic for his trust in the governing Board and emphasized their intention to collaborate with relevant government entities to give reliable statistics that would serve as a guide for the Government in its policy decision-making processes. The seven-member Board has Dr. Grace Bediako as the Chairperson, the members are, Prof Samuel Kobinan Annim, Ms. Ashiokai Akrong, Dr. Evans AggryDarko, Dr. Josephine DzaheneQuarshie, Mr. Philip Abradu-Otoo and Prof Robert Darko Osei.
Star Assurance supports ‘Hope for Little Lives’ health outreach and surgical care initiative Star Assurance Company Limited has made a donation of GH¢20,000 to the ‘Hope for Little Lives’, a non-profit organization that provides medical screening, health education and pediatric surgical care to disadvantaged communities in Ghana. Speaking at a brief presentation ceremony, CEO of Star Assurance, Mrs. Boatemaa Barfour-Awuah said the company decided to support the ‘Hope for Little Lives’ Easter programme in Keta, the Volta Region because of the synergy between their efforts and the brand values of Star Assurance. “We use our business and insurance products to positively impact society so
we are happy to consider and support social initiatives with similar objectives,” she said, adding that it gives real meaning to its slogan of ‘Your Solid Partner’ by supporting initiatives that bring critical interventions to the needy and vulnerable in society.
| COMMENT/ANALYSIS
WEDNESDAY, MAY 11, 2022
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GSE announces historic partnership with Jamaica Stock Exchange
Riding on the historical linkage between Ghana and Jamaica, the Ghana Stock Exchange (GSE) signed a historic memorandum of understanding (MoU) with the Jamaica Stock Exchange ( JSE) to forge a stronger relationship across the stock markets and the economies of both countries. This is the first time such a MoU is being signed with a Caribbean Exchange and this presents enormous opportunities for both Exchanges. The step towards this MoU was occasioned by an earlier Regional Investment and Capital Market Conference in January 2022 by the JSE, where the GSE participated. Formalizing the partnership through the signing of the agreement, Managing Director of the JSE, Dr. Marlene Street
Forrest said the move will further cement l i n k a g e s across markets whilst also strengthening South/South D i a s p o r a connections. “ T h i s relationship with Ghana is very strategic to us as we pursue our 2025 vision to expand our borders for growth and sustainability. We believe that this partnership can ensure wealth creation and even further development of our markets from the frontier to emerging markets,” she said. Africa, like the Caribbean, is the new frontier for development and attracting a lot of interest and investments across the globe. Ghana and Jamaica alike have a growing and educated middle class with high demand for services. Stock Exchanges have to position themselves as critical economic development agents to seize the opportunities this trend presents. Adding his voice during
this momentous occasion, the Director-General of the Securities and Exchange Commission, Rev. Daniel Ogbarmey Tetteh said: ‘Such partnerships with Exchanges in other regions will help promote the sharing of best practices and knowledge transfer, which are critical to the development of capital markets.’ The JSE started operations on February 3, 1969, and it was the first stock market to be created in the English -Speaking the Caribbean with over 100 listed companies currently. It has since created five markets comprising the Main Market, Junior Market, US Denominated Market, Bond Market, and Private Market. The JSE operates using first-class and globally accepted technology and has been recognized
internationally, by Bloomberg, as the No. 1 Performing Exchange in the World twice. It was fully demutualized on April 1, 2008, and is the only demutualized Exchange in the Caribbean. Lauding the partnership as a historic event, Mr. Ekow Afedzie, Managing Director of GSE, said the JSE has made tremendous progress in the past five decades of its existence and he was most looking forward to the crosslisting and cross-trading activities to come from the partnership. “We believe that this collaboration can also lead to further development of our economies -not just in our stock markets but in general investment opportunities across both countries,” he added.
Alex Blankson donates office equipment to Akrofuom Education Directorate By Sampson Manu The Member of Parliament for Akrofuom Constituency in the Ashanti Region, Hon Alex Blankson has donated office equipment to the District Education Directorate to enhance work and increase productivity and efficiency. The items included; 2 Dell Laptops, 3HP Laptops, 3 Printers, 4 External Drives, 2 stabilizers and a Refrigerator. This was after the Member of Parliament donated chop boxes, mattresses and trunks to some 50 brilliant but needy students in the constituency last month. At a brief ceremony to hand over the procured items to the educational Directorate, Honorable Alexander Blankson said the donation was in response to calls made to him by the Education Directorate on their specific needs which had impeded their work. He mentioned that the
development of education in the district remains his major priority. He said “ Human resource development remains a major asset of every country. As a Member of Parliament, I am commitment to developing the Human Resource capacity of my Constituency which is in sync with the objectives of the President His Excellency Nana Addo Dankwa Akufo-Addo “ He lauded the Directorate for their efforts and hard work and admonished them to work diligently to improve Education in the District and pledged his unflinching support to the Directorate. The District Director of Education Mr. George Sarfo Kantanka who received the equipment on behalf of the Directorate lauded Mr.Blankson for coming to their aid at the time the office needed the equipment for their work. He said the
equipment will go a long work to enhance their efficiency. Maurice Jonas Woode, the District Chief Executive for Adansi Akrofuom who accompanied the MP to make the donation advised the Directorate to put the gadgets
into good use to ensure their longevity. Jacob Nyantekyi, the newly elected chairman for Akrofuom Constituency for the New Patriotic Party, was in attendance with his executives at the occasion.
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| NEWS
WEDNESDAY, MAY 11, 2022
Adonai Shipping says ready to play key role in Ghana’s logistics sector
Leading oil and gas and maritime services provider, Adonai Shipping Ghana Ltd., has announced its strong interest in Ghana’s maritime logistics and transport value chain as it seeks to play a pivotal role in the African Continental Free Trade Area (AfCFTA). This new focus, according to the company, will be driven largely its reliable global trade logistics network OBL Network, which is an elite and trusted set-up of shipping services providers with footprints across Africa. “The logistics sector is where we will be able to expand our services because we see more possibilities right now, especially in the wake of
the single continental market. Our membership with OBL Network also allows us to do more international business through a trusted network of trade agents and facilitators on the African continent,” Finance Director of the company, Mrs. Christel Dowuona-Owoo, said in an interview. In furtherance of its new focus, Adonai Shipping plans to increase investment in critical infrastructure and logistics such as commercial storage and warehousing facilities, fleet of trucks and human capital as part of an extensive repositioning to explore both the domestic and continental maritime logistics sector. “To be able to serve better in this space, we’re looking to invest heavily to help undertake projects on our own. Although we work with trusted third-party firm to the best of our knowledge, we believe that will enable us to offer high-end value to our business clients,” Mrs. DowuonaOwoo added.
Adonai Shipping first started in the maritime sector providing crew to offshore ships working in Takoradi around the rigs as we focused strongly on the oil and gas business. Over the years, additional services such as ship chandelling and logistics have been added with the latter becoming its key area of focus of the business going into the future. Managing Director, Seth Dowuona Owoo stressed that the company has been built around honesty, openness and integrity in all of its dealings with customers and stakeholders. “The operation of Adonai Shipping Ghana is driven largely by its Dutch expertise and business culture which it has diligently infused into every area of the business and these solid values has seen the company grow into a formidable player in Ghana shipping and logistics industry,” he said. According to Sales Supervisor, Ephraim Djabanor Tetteh, the surging cargo volumes through Ghana’s
ports also open up opportunities for cargo handling supply chain and transportation services. “Our main focus now is logistics in the areas of clearing, forwarding and import and exports as well as cargo haulage services. We currently transport goods to landlocked countries in West Africa. As a thirdparty business, we are looking at exploring that aspect of the maritime transport sub-sector even better,” he said.
Mr. Seth Dowuona-Owoo, Managing Director of Adonai Shipping Limited
Chief Nana Dakrabo I to Build 321-Acre Film Studio to Revolutionize Film Industry in Ghana Serial Entrepreneur and Enstooled Chief, HRH Chief Nana Dakrabo I (also known as Michael B. Pratt) has partnered with WEG Studios in Washington, DC, musician/producer Koby Maxwell, actor Michael Blackson, and other notable people to develop a state-of-the-art film studio and production house, “Dakrabo 1 Studios.” This world-class studio will sit on 321 acres in Ghana, making it the first of its kind in Africa. The projected $350 million development will bring thousands of jobs and ignite Ghana’s entertainment industry. Chief Nana’s team is made up of leading industry executives, as well as architects, studio developers, entrepreneurs, executives, investors, and celebrities with aligned interest to make Ghana an entertainment hub in Africa. Chief Dakrabo feels it is time for Africans around the world to unite and bring to Africa what we’ve been bringing to the rest of the world… entertainment. Chief Nana stated, “Entertainment is my biggest passion. I was born in Los Angeles and raised around celebrities and executives. Essentially, I was raised around Hollywood and now I get to bring Hollywood to Ghana.” He continued, “My vision is to develop a Hollywood ecosystem in Ghana. Beyond the film studio, I want to see professionals in all creative industries realize their ‘Hollywood’ dreams without leaving the continent and to see a thriving entertainment industry, that attracts talent and attention from all over the world.” With Nigeria’s Nollywood being the 2nd largest film industry in the world (producing over 2,500 films and employing over 300,000 persons per year), there is an enormous opportunity to
attract a massive number of productions to Ghana to produce high quality, worldclass productions. Popular Nollywood Film Producer Koby Maxwell shared, “A film studio in Ghana will tremendously improve the industry with highquality productions and it will unlock untapped potential and opportunities for international distribution.” The studio is poised to capitalize on the African film market, gaining a large share of productions from neighboring countries, while simultaneously attracting productions from around the world. Once the campus is developed, Dakrabo 1 Studios will showcase 7 soundstages, a 240-acre backlot, a bluescreen water tank, a recording studio, pre/post-production facilities, screening theaters, a concert hall, office space, a hotel for cast and crews, and most importantly, a film & music school. Chief Nana wants to create a space for creatives to thrive and give students hands-on training, in the classroom and on the studio lot. About the school, Chief Nana proclaimed, “Our education and technology partners are working together to create an educational experience that allows industry leading teachers from Los Angeles to teach virtually in Ghana.” He also added, “It’s critical that we properly educate aspiring professionals on best practices and techniques directly from the industry’s best. This will allow us to create content at a caliber that rivals a
Hollywood blockbuster.” Fittingly, every building on the lot will be named after an influential African from around the world. This is Nana’s way of honoring our trailblazers and insinuating that this project is only possible because Africans around the world have overcome and are uniting for the first time since our great dispersion. Without a major production facility in Ghana, there is no potential to compete on the world stage in entertainment. However, President Nana Addo launched a Film Pitch Series and Honorable Dr. Ibrahim Mohammed Awal is dedicated to building Ghana’s film industry. Chief Nana said, “Having nothing but support from Ghana’s government makes all the difference in the world and I couldn’t ask
for a more encouraging and progressive government to work with.” He feels confident Ghana can attract massive investment into the industry and major productions to the studio. The industry will not only contribute to the country’s GDP and employment, but also tourism. But for this to happen, filmmakers must have access to a state-of-the-art facility, cutting-edge equipment, top-notch education, and capital. Nana is excited to bridge the gap between Hollywood and Ghana with hybrid production teams and film
financing. His production partners, United Filmmakers, is a TV/Film Production & Distribution company specializing in African American and African productions across various platforms. They place control of the projects into the hands of the creatives with filmmaker friendly distribution contracts and transparent annual reporting. With over 40 years of experience, his team has established relationships with some of the top networks and streaming platforms in the industry including Netflix, Hulu, Amazon Prime, Roku, Tubi, Pluto TV, BET, TV One, HBO, SHOWTIME, and OWN. They intend to open the doors for African filmmakers to distribute to major networks globally. “We’ve got a really powerful team,” Chief Nana affirmed. “Collectively, we have access to most of Hollywood’s major networks and collectively, we want Ghana’s creatives to have the same access.” Since his enstoolment, Chief Nana has been focusing on fulfilling his duties as Mpuntuhene (Development Chief ) of Akonoma in the Asebu Kingdom. “I’ve been given an immense privilege to impact the lives of many. I do not take it lightly. I am grateful to King Okatakyi Dr. Amanfi VII for entrusting me with such a huge responsibility and supporting my visions,” Chief Nana asserted. Beyond entertainment, Chief Nana Dakrabo I is passionate about education, technology, and development. He is creating a plan to renovate schools in his Traditional Area, develop affordable housing, advance education through technology, and bring employment opportunities in several different industries. Chief Nana declared, “It’s all about helping others. God has blessed me to be a blessing to others. That is the real dream come true.”
WEDNESDAY, MAY 11, 2022
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WEDNESDAY, MAY 11, 2022
| FEATURE
WEDNESDAY, MAY 11, 2022
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Is diplomacy between Russia and the West still possible? By Richard Haass Amid more than two months of intense media focus on the war in Ukraine, one story was largely overlooked. In late April, the United States and Russia carried out an exchange of prisoners. Russia released an American (a former marine) whom it detained some three years ago, while the US released a Russian pilot imprisoned over a decade ago on drug smuggling charges. What makes the exchange noteworthy is that it took place at a time when Russia’s brutal invasion of Ukraine has brought relations with the US to their lowest point since the end of the Cold War. The US has opted to avoid direct military involvement in the war, but it is doing a great deal to affect its trajectory, including providing Ukraine with large quantities of increasingly advanced arms, intelligence, and training so that it can successfully resist and potentially defeat the Russian forces. The US has also taken steps to strengthen NATO and impose severe economic sanctions on Russia. The war is likely to stretch on for some time. Although Ukraine’s fundamental interest is to end the war and prevent more death and destruction, President Volodymyr Zelensky’s desire for peace is conditional. He seeks to regain territory that Russia occupies and ensure the country’s sovereignty is respected so that, among other things, Ukraine can join the
European Union. He also wants those responsible for war crimes to be held accountable. Russian President Vladimir Putin, for his part, needs to achieve an outcome that justifies his costly invasion lest he appear weak and be challenged at home. There is little chance that a peace could be negotiated that would bridge the gap between these two seemingly irreconcilable positions. It is far more likely that the conflict will continue not just for months, but for years to come. This will be the backdrop for US and Western relations with Russia. One possibility for the West would be to link the entire relationship with Russia to Russia’s actions in Ukraine. This would be a mistake, though, because Russia can affect other Western interests, such as limiting the nuclear and missile capabilities of Iran and North Korea, and the success of global efforts to limit the emissions that cause climate change. The good news is that, as the prisoner exchange demonstrates, profound differences over Ukraine need not preclude conducting mutually useful business if both sides are willing to compartmentalize. But protecting the possibility of selective cooperation will require sophisticated, disciplined diplomacy. For starters, the US and its partners will need to prioritize
and even limit their goals in Ukraine. This means renouncing talk of regime change in Moscow. We need to deal with the Russia we have, not the one we would prefer. Putin’s position may come to be challenged from within (or he may succumb to reported health challenges) but the West is not in a position to engineer his removal, much less ensure that someone better replaces him. Likewise, Western governments would be wise to put off talk of war crimes tribunals for senior Russian officials and stop boasting about helping Ukraine target senior Russian generals and ships. The war and investigations are ongoing, and the Russians need to see some benefit in acting responsibly. The same holds for reparations. Similarly, although Russia will likely find itself worse off economically and militarily as a result of initiating this war of choice, the US government should make clear that, contrary to Secretary of Defense Lloyd Austin’s remarks, America’s goal is not to use the war to weaken Russia. On the contrary, the US should underscore that it wants the war to end as soon as possible on terms that reflect Ukraine’s sovereign, independent status. As for the war in Ukraine, the West should continue to provide support for Ukraine and prevent escalation by avoiding direct combat. The Kremlin, though,
should be made to understand that this restraint is premised on its not widening the war to a NATO country or introducing weapons of mass destruction, at which point such self-imposed Western limits would disappear. The West also should consider carefully its war aims and how to pursue them. The goal should be that Ukraine controls all its territory, but this does not necessarily justify trying to liberate Crimea or even all of the eastern Donbas region by military force. Some of these goals might be better sought through diplomacy and selective easing of sanctions. But, until Russia’s behavior changes, sanctions should not just remain in place but be extended to cover energy imports that are funding the Russian war effort. Diplomacy is a tool of national security to be used, not a favor to be bestowed, and it should continue to be pursued with Russia. Private meetings between senior civilian and military officials of Western countries and Russia should resume, in order to reduce the risk of a miscalculation that could lead to confrontation or worse, and to explore opportunities for limited cooperation. It may well be that constructive relations with Russia do not emerge until well into a postPutin era. But this in no way alters the West’s interest in seeing that relations do not fall below a certain floor in the interim.
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| MARKET REVIEW
WEDNESDAY, MAY 11, 2022
WEEKLY MARKET REVIEW FOR WEEK ENDING - MAY 6, 2022 MACROECONOMIC INDICATORS Q3, 2021 GDP Growth
7.0%
Average GDP Growth for 2021
5.4%
2022 Projected GDP Growth
5.5%
BoG Policy Rate
17.0%
Weekly Interbank Interest Rate
17.45%
Inflation for February, 2022
19.4%
End Period Inflation Target – 2022
8.0%
Budget Deficit (% GDP) – Dec, 2021
9.7%
2022 Budget Deficit Target (%GDP)
7.4%
Public Debt (billion GH¢) – Dec, 2021
351.8
Debt to GDP Ratio – Dec, 2021
74.4%
STOCK MARKET REVIEW The Ghana Stock Exchange retreated for the week on the back of a decline in GCB Bank’s share price. The GSE Composite Index (GSE CI) lost 0.25 points (-0.01%) to close at 2,690.94 points, reflecting year-to-date (YTD) loss of 3.53%. The GSE Financial Stocks Index (GSE FI) also lost 0.46 points (-0.02%) to close at 2,209.24 points, reflecting year-to-date (YTD) gain of 2.67%. Market capitalization inched up marginally by 0.07% to close the week at GH¢63,859.57 million, from GH¢63,817.52 million at the close of the previous week. This reflects YTD decrease of 0.99%. Trading activity registered a total of 10,671,215 shares valued at GH¢10,716,327.61 changing hands, compared with 87,630,871 shares, valued at GH¢89,227,903.01 in the preceding week. MTN dominated both volume and value of trades for the week, accounting for 95.02% and 94.07% of volume and value of shares traded respectively . The market ended the week with no leader and 1 laggard as indicated on the table below.
THE CURRENCY MARKET The Cedi marginally depreciated against the USD for the week. It traded at GH¢7.1132/$, compared with GH¢7.1128/$ at week open, reflecting w/w and YTD depreciations of 0.01% and 15.56% respectively. This compares with YTD appreciation of 0.50% a year ago. The Cedi appreciated against the GBP for the third consecutive week. It traded at GH¢8.7859/£, compared with GH¢8.9333/£ at week open, reflecting w/w appreciation and YTD depreciation of 1.68% and 7.50% respectively. This compares with YTD depreciation of 1.80% a year ago. The Cedi retreated against the Euro for the week. It traded at GH¢7.5280/€, compared with GH¢7.4963/€ at week open, reflecting w/w and YTD depreciation of 0.42% and 9.30% respectively. This compares with YTD appreciation of 1.46% a year ago. The Cedi meanwhile appreciated against the Canadian Dollar for the week. It opened at GH¢5.5547/C$ but closed at GH¢5.5235/C$, reflecting w/w appreciation and YTD depreciation of 0.56% and 14.16% respectively. This compares with YTD depreciation of 3.97% a year ago.
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BUSINESS TERM OF THE WEEK
COMMODITY MARKET Crude oil prices rose up again for the week. However, worries about an economic downturn that could impact fuel demand persisted. Brent futures traded at US$113.12 a barrel on Friday, compared to US$107.58 at week open. This reflects w/w and YTD gains of 5.15% and 45.44% respectively. Gold prices were up on Friday and for the week despite a rally in the U.S dollar and Treasury yields over the U.S. Federal Reserve’s hawkish stance. Gold settled at US$1,883.50, from US$1,863.60 last week, reflecting w/w and YTD appreciation of 1.07% and 3.00% respectively. Prices of Cocoa retreated for the week. The commodity traded at US$2,471.00 per tonne on Friday, from US$2,604.50 last week, reflecting w/w and YTD loss of 5.13% and 1.94% respectively.
GOVERNMENT SECURITIES MARKET Government raised a sum of GH¢2,130.58 million for the week across the 91-Day, 182-Day and 364-Day Treasury Bills, 2-Year Fixed Rate Note and 5-Year Fixed Rate Bond. This compared with GH¢453.36 million raised in the previous week. The 91-Day Bill settled at 17.88% p.a from 17.41% p.a. last week whilst the 182-Day Bill settled at 18.81% p.a from 18.53% p.a. last week. The 364-Day Treasury Bill settled at 20.65% p.a from 19.67% p.a last week. The 2-year FXR Note settled at 21.50% p.a whiles the 5-Year FXR Bond settled at 22.30%. The table and graph below highlight primary market yields at close of the week.
INTERNTIONAL COMMODITIES PRICES
Price Skimming: Price skimming is a product pricing strategy by which a firm charges the highest initial price that customers will pay and then lowers it over time. As the demand of the first customers is satisfied and competition enters the market, the firm lowers the price to attract another, more price-sensitive segment of the population. The skimming strategy gets its name from “skimming” successive layers of cream, or customer segments, as prices are lowered over time. Source: https://www.investopedia.com/ terms/p/priceskimming.asp
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NO. B24/317 | NEWS FOR BUSINESS LEADERS
WEDNESDAY, MAY 11, 2022
Pros, cons of eCedi Money is a vital tool in our modern society. From the early days of barter, where physical items were used to facilitate the exchange, to the modern world, where paper notes and coins serve as legal tender, society’s need to find some form of instrument for exchanging goods and services remains a vital. Advancements in modern digital technologies are giving rise to digital payments; with an emergence of private issued digital currencies, including cryptocurrency. These developments have given rise to the need for central banks to consider issuing their own digital currency, known as a Central Bank Digital Currency (CBDC). These can be described as a digital legal tender issued by a central bank, pegged to the value of the issuing country’s fiat currency and regulated as part of its monetary and fiscal system. Digital currency The Bank of Ghana (BoG) announced its plan to launch a digital currency to be known as eCedi in 2019, and in 2022 it issued a 32-page design document that provides information on the eCedi vision, key motivations, expected benefits, and design
principles, including governance and accessibility, interoperability, requisite infrastructure and security. The e-Cedi is designed as a digital replica of the Ghana cedi notes and coins. It is crafted as a retail tokenbased CBDC stored in a digital wallet, convertible to Ghana cedis in the form of cash or deposit money on a 1:1 ratio. This is to say that the owner of e-Cedis can redeem them for physical cedis and use it for a variety of payments. The eCedi comes with various advantages; prominent among them is the potential for more efficient and secured payments, lower transaction costs and faster processing times. Also, it can save the central bank money, as it by-passes the high price of printing notes and minting coins abroad. It also enables citizens to consume central bank digital products directly, increasing the speed of settlement especially when it comes to real-time payments. With the central bank backing, the eCedi holds a stable value compared to cryptocurrency, which is characterised by high volatile pricing. One of the economic challenges that eCedi can help solve, is the
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considerable number of unbanked and underbanked persons in Ghana, as it can serve as a powerful tool for financial inclusion by increasing access to digital payments and creating lower or zero-cost bank-type accounts. Disadvantages There are several disadvantages associated with the eCedi. Cash offers a high level of privacy and anonymity since there is no means of monitoring cash transactions; however, with eCedi it will be possible to track and trace each transaction. Given that the central bank is a government entity, some people are just not enthused about the idea that a state entity can access information about their spending patterns. Although there are a number of safeguarding mechanisms suggested to deal with these privacy concerns, some believe they does not go far enough and the risk remains and that the central bank of Ghana must work toward assuring better anonymity, even better than what commercial banks or other digital payment providers are currently offering. Another challenge with eCedi is that it may position the Bank of Ghana as a direct competitor to digital payment providers, especially
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mobile money, meaning possible loss of income for players in the fintech ecosystem. Also, for the banking sector, if consumers increase their holding in CBDC, it may provide direct competition to in-person bank deposits. Lastly, there is no guarantee that consumers will be interested in accepting eCedi since it does not offer any perceived advantages over existing digital payments meaning it may not attain widespread adoption In conclusion, eCedi offers many advantages and innovations needed to support our fast-evolving digital payments ecosystem; in the same breath, it is confronted with many challenges. By deciding to pilot the eCedi, the Central bank of Ghana is putting itself in a position of being a pioneer in digital currency, meaning it can learn the ropes over time about how to manage CBDC effectively, evolve standards and mechanisms to sustain its uptake. The writer is a Technology Innovations Consultant. E-mail: kwami@mangokope.com