Business24 Newspaper 30th October, 2020 by Business24 Online

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FRIDAY OCTOBER 30, 2020

NO. B24 / 120 | NEWS FOR BUSINESS LEADERS

Gov’t cuts 2021 deficit target to 8.3% of GDP

FRIDAY OCTOBER 30, 2020

ISSER Director asks parties to link manifestos to long-term dev’t plan By Joshua Worlasi Amlanu macjosh1922@gmail.com

n order to address the strategic needs of the country, it is imperative to have a direct linkage between political party manifestos and the country’s long-term development plan, Professor Peter Quartey, Director, Institute of Statistical, Social and Economic Research (ISSER), University of Ghana, has said. Cont’d on page 3

Call for full disclosure on gov’t’s takeover of AirtelTigo By Eugene Davis ugendavis@gmail.com

Ken Ofori-Atta, Finance Minister

By Joshua Worlasi Amlanu macjosh1922@gmail.com

inance Minister Ken Ofori-Atta says government will scale down the earlier projected

2021 fiscal deficit from 9.6 percent of gross domestic product (GDP) to 8.3 percent of GDP. This, according to the Minister, reflects expected improved revenues from

ECONOMIC INDICATORS EXCHANGE RATE (INT. RATE)

the anticipated pick-up of economic activities and a more rationalised public expenditure programme in 2021. Cont’d on page 2 INTERNATIONAL MARKET

USD$1 =GHC 5.7027

BRENT CRUDE $/BARREL

POLICY RATE

14.5%

NATURAL GAS $/MILLION BTUS

GHANA REFERENCE RATE

15.12%

GOLD $/TROY OUNCE

OVERALL FISCAL DEFICIT

11.4% OF GDP

PROJECTED GDP GROWTH RATE AVERAGE PETROL & DIESEL PRICE:

0.9% GHC 5.13

member of Parliament’s Communications Committee, Ras Mubarak, is demanding full disclosure from the government on the AirtelTigo agreement, describing it as a “bad deal”.

CORN $/BUSHEL COCOA $/METRIC TON COFFEE $/POUND:

Cont’d on page 3 Follow us online:

$41.26 2.622 1,922.57 329.50 $2,339.27 $109.65

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NEWS/EDITORIAL Editorial / News

FRIDAY OCTOBER 30, MONDAY SEPTEMBER 14 2020 2020

EDITORIAL Editorial

Pay before boarding order needs a rethink

Floods still a big deal

The new directive for all passengers to pay for their COVID-19 test online before their this week, some arrivalarlier at Kotoka International Airport has of beenAccra meet were with parts resentment by airlines and heavily flooded after passengers. what seemed like a harmless At a time when passengers are rainfall. still coming to terms with the While Accra various US$150 � GHC has 900� had mandatory payment for COVID-19 flood prone areas test in upon the arrival at KIA, the new directive past, it seems over the years has generated more debate. the entire city is becoming Passengers travellingwith to Ghana practically unlivable flash will from Tuesday, September 15 floods becoming than be required to regular make online exception. payments for the mandatory CO V I D - 1 9thet usual e s t arefrain t K o tthat oka Indeed, International Airport prior to people have built on waterways boarding of their flight, a hence d i r e cthe t i v floods e b y is Fno r o longer ntier enough not H e a l t h–Cthat a r eis � th e to c odiscount mpany contracted to cause. carry out the that particular antigen test at KIA--to all airlines What has become more on Friday has revealed. evident is that we can no longer By the new directive, as a people settle for the low “Passengers are required to show hanging fruit in our quest as to,a proof of payment to airlines first of all, understand the mess we find ourselves as well as

Wash your hands 2

Cover your cough 3

condition for boarding of flights country� s COVID-19 testing to KIA.” regime.

T h e n e w d i re c t ive , h a s come up with solutions to deal however, been described by with same. airlines as detrimental to the renewed to thousands stimulate It is a efforts fact that demand for air travel, given that of people may have died cash payments remains the through these floods and predominant mode of payment properties worthtravelers. billions of for most Ghanaian cedis haveoperator been lostwho to An may airline these However, the wishes floods. to remain anonymous, told Business24 that “The cost is lack of a comprehensive multialready too high and now this stakeholder approach to tackle new policy is also going to be these floods implem e n t e dmean . T h ethat r e athe re worst is probably yet to come. hundreds of Ghanaian traders who goods to owes retail As travel much to as buy government in the country. it a duty to a large extent to “Most themlivable don� t carry any make ourofcities by taking electronic payment cards to be measure to preventt these able to pay online. They should rampant floods, the citizens have the flexibility to pay cash which suffer the most – in the when they arrive.” interim – must own their space The Consumer Protection Agency has alsopossible raised and do � CPA� everything critical questions about the to stop these disasters from relatively high cost of the happening or minimize their effects.

The CPA� s Chief Executive Policy makers and elected Officer, Kofi Kapito, said in as officials have slept onwant what much as the government to curb cases of the needs imported to be done to address respiratory it must these floodsdisease, for far too long.not As burden the passenger but charge if by a conspiracy of nature, we what is enough to cover their are seeing these floodsfrom closethe to cost and not to profit passenger. the election day which should nudge to Africa actionand if they “Lookthem around you see that what is paid in Ghana have any conscience at all. for theThe testhavoc is the highest. Why wreaked by these should that be� ” floods would be fresh on the He also raised questions about minds of the electorates and why the Noguchi Memorial should at push them of to Institute for least Medical Research holding those who have power the University of Ghana, was not made handle the testing for a or aretoseeking power to make reasonable fee but rather a firm commitment on dealing contract given to a foreign with this menace. company to do what Noguchi If we continuehandle. to play ostrich, could adequately weBusiness24 will not only havelike ourto fingers would urge aburnt flexible approach but our faces asthat wellallows as the passengers to either online disaster which loomspay cannot be or cash on arrival. overestimated.

COVID-19: Banks deferred GH¢3bn in loan repayments

Gov’t cuts 2021 deficit target to 8.3% of GDP that the desired outcomes are outbreak had transformed their team structures to the new way of CONTINUED FROM COVER

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achieved from andcover the economy operations, the bank chiefs working in order to maximise Continued brought back on track.” responded that the immediate efficiencies of digital banking, Mr. Awuah� s remarks were response was to enforce remote and ensure less-paper operations Mr. Ofori-Atta made this known working while realigning workers� and requirements for social reinforced by majority of the top when he presented revenue roles. distancing. In the long run, these bank executives who responded and expenditure estimates measures may result in possible While the majority, 69 percent, to the survey. The respondents for the first quarter of 2021 layoffs for some whose jobs of respondents indicated that advised the Bank of Ghana to to Parliament on Wednesday. increase stakeholder consultation remote working will become a become automated,” the report Lawmakers are expected to permanent option going forward, said. in order to propose more Commenting on the findings of approve estimates to enable there was general consensus that beneficialthe policies. the survey, which was on the the new norm will ultimately lead theThis, government run until full they to said, will a help post-election budget statement is to the shedding of workers whose theme “The new normal� banks� estimate the timelines and extent response to COVID-19”, PwC� s jobs have become automated. prepared March next year. to whichbythe policies of the “ M o s t b a n k s i n t e n d t o Country Senior Partner, Vish Althoughwill theremain projected 2021 regulator available. permanently incorporate remote Ashiagbor, cautioned that for deficit S o m e rexceeds e s p o n d ethe n t s legallys i m p l y working as an option available to workers that survive the digital thought thatlimit there the need established of was 5 percent of staff based on their roles. 12.5� of p ro g re s s i o n , t hey h ave to for detailed guidelines the banks confirmed that they have upgrade their skills to remain GDP, the minister was from certain government andwould Bank return of Ghana that the country to already begun and will continue relevant. on the implement ation of to realign the job roles and work compliance with the limit before measures put in place to curb the 2024. impact of the pandemic. “With this path, we expect a In their guidance of our implementation of the return to theview, fiscal clear responsibility The overall fiscal deficit was missing, and though this transformation and revitalisation resulting from the revenue and threshold of 5 percent of GDP c o u l ddeficit b e s and h a r e ad positive during fiscal phase of the Ghana CARES expenditure performance for stakeholder consultation, they primary balance earlier than (Obaatanpa) Programme.” January through September could not fully embed the new the 2024 fiscal year previously The country’s fiscal deficit is 2020 stood at GH¢34.6bn, policies in operational strategy announced,” he said. without a detailed documented projected to reach 11.4 percent of representing about 9 percent of He further assured that GDP by the end of 2020 from the GDP, against a target GH¢34.3bn. directive. government is approaching the 4.7 percent initially estimated for corresponding primary ADVERTISE The WITH US next fiscal year with increased the fiscal year. This has largely balance was a deficit of Post-pandemic banking TEL: +233 024 212 2742 optimism, saying, “we expect been attributed to the impact GH¢15.7bn, representing 4.1 growth rebound strongly in of the novel coronavirus on the percent of GDP, against the target Whentoasked by the audit firm www.thebusiness24online.net 2021 at 5.7 percent as a result of GH¢15.4bn. about how the pandemic� s economy.

FRIDAY OCTOBER 30, 2020

ISSER Director asks parties to link manifestos to long-term dev’t plan Continued from cover He opined that political party manifestos are important documents that help to deepen the country’s democracy and allow campaign debates to be issues-based. He added, however, that manifestos must be aligned to the long-term development plan of the country. Prof. Quartey made this statement during a presentation at the 13th National Development Forum in Accra, organised by the National Development Planning Commission (NDPC) and dubbed, “Towards Election 2020: Political Party Manifestos and Long-Term Strategic Needs of Ghana”. The Development Forum discussed, among other issues, the long-term sustainability of Ghana’s development agenda. Prof. Quartey said since a longterm plan is developed based on broad consultations and consensus building, it provides the vision for the country, while manifestos only spell out how to achieve the vision in the short term.

He said it would be difficult to run the country on manifestos and medium-term plans alone, since they oftentimes are not sustainable and can lead to lack of continuity in development projects and programmes. Ghana@100 agenda The forum was also used to launch the Ghana@100 long-term development framework, prepared by the National Development Planning Commission (NDPC). Chairman of the NDPC, Prof. Stpehen Adei, said the framework draws on historical lessons as well as emerging development issues and charts a path for the Ghana the country wants by 2057, when the nation turns 100 years. The framework seeks to provide the continuity in strategic direction necessary for Ghana’s social and economic transformation to achieve the vision of a democratic, inclusive, self-reliant, and developed country by 2057, he said. The preparation of the document was based on the draft 40-Year Long-Term National

Peter Quartey, Director, Institute of Statistical, Social and Economic Research (ISSER), University of Ghana

Development Plan prepared by NDPC in 2016 and the Ghana Beyond Aid Charter prepared in 2019. “Ghana@100 envisages a just, free and prosperous nation that guarantees high income per capita of not less than US$50,000 equivalent, with opportunities for all Ghanaians to develop their fullest potential, live healthy and fulfilling lives, and contribute to national development,” Prof. Adei said. He further explained that this aspiration is founded on a highly industrialised, diversified, export-oriented economy driven by Ghanaian entrepreneurship and producing high-value goods and services. Other features are a dynamic

and globally competitive manufacturing sector, an efficient and climate-smart agricultural sector, sustainably managed natural resources, well-planned human settlements, strong institutions, and an economy that is resilient to both internal and external shocks. Underpinning the Ghana@100 vision are four key pillars: economic, social, environment, and governance, peace and security. To accelerate the achievement of the goals of the four pillars are 10 catalytic drivers. These are critical crosscutting driving forces that must be consistently pursued to ensure the successful achievement of the goals.

Call for full disclosure on gov’t’s takeover of AirtelTigo Continued from cover The government announced on Tuesday that it was in advanced stages of discussions for the transfer of AirtelTigo shares to the state, along with all customers, assets and agreed liabilities. AirtelTigo is one of the three dominant mobile network operators in the country, with a customer base of 5.1m. A statement from the Ministry of Communications said “the Government of Ghana, through this transaction, will temporarily operate this national asset in the best interest of the nation, and ensure the protection of the interests of all employees, customers and stakeholders, and a continuation of the digital transformation in Ghana.” Mr. Mubarak, however, told Business24 in an interview that he was disappointed by the fact that the transaction was first disclosed by India-based Bharti Airtel, one

Ras Mubarak wants the government to disclose the details of the AirtelTigo transaction.

of the two major shareholders of AirtelTigo. “I find it unacceptable that my own government will enter into such an agreement to use the taxpayer’s money to acquire 100 percent shares in AirtelTigo, and they have not had the courtesy to inform the good people of Ghana what this is all about, why it is happening and how much is involved. I expect nothing but

full disclosure of the details of the transaction,” the opposition Member of Parliament for Kumbugu said. He added that he found it worrying that the government was attempting to become a player in the telecommunications industry, despite its also being a regulator through the National Communications Authority. “If you recall, when [the

government] sold then Ghana Telecom to Vodafone, the argument was that government should not be in the business of running telecommunications; the private sector was best placed to be the one to be used as the engine of growth.” However, in its statement, the Ministry of Communications said “given the multiplier impact the telecommunications sector has on the economy and various related industries, the Government of Ghana has entered into this agreement to ensure that thousands of Ghanaian jobs are safeguarded.” Bharti Airtel in 2017 merged with Millicom’s Tigo in Ghana to form AirtelTigo. Prior to the merger, the Government of Ghana was a shareholder in Airtel Ghana with a 25 percent holding through the Ghana National Petroleum Corporation, and retained an option to acquire additional shares after the merger.

FRIDAY OCTOBER 30, 2020

News

FRIDAY OCTOBER 30, 2020

Rwanda targets key sectors as it deepens bilateral relations with Ghana By Patrick Paintsil p_paintsil@hotmail.com

wanda has identified business and trade, tourism, agribusiness and education as key areas that it intends to partner government to fully explore to the benefit of the two nations, the nation’s High Commissioner to Ghana, Dr. Aisa Kirabo Kacyira, has disclosed. Speaking to journalists ahead of the official commissioning of the Rwandan Embassy in Accra, she indicated that these were critical areas for knowledge and expertise sharing that could create the much-needed jobs and prosperity for both parties. “Rwanda has well-packed tourism products; Ghana has a solid education system. We also see opportunities in business and trade. We hope to facilitate business and partnerships that will ensure that both countries benefit from

the competitive advantage in a win-win manner,” she said. In the area of agriculture, Dr. Kacyira hinted that her office was already working on a partnership with Ghana Cocoa Board (COCOBOD) to facilitate the latter’s access to Pyrethrum—a flower that is highly produced in Rwanda—to

boost the productivity of cocoa, which is a big foreign exchange earner to the country. The Rwandan High Commissioner stressed that her country has a strong agenda to unite Africa hence the need to forge stronger relations with Ghana by building on the existing excellent relationship

between the two nations. She described the opening of an embassy in Ghana as a turning point in Ghana-Rwanda bilateral relations as it will facilitate the sharing of expertise that will be valuable to both nations. Rwanda played a key role in the selection of Ghana as the host of the AfCFTA Secretariat which, according to the high commissioner, is testament to the cordial relations that the two countries have enjoyed over the years. The media engagement formed part of the Embassy’s ways of selling its vision and aspirations for Ghanaians and the business community and to solicit feedback on their activities in the country. “We believe in keeping people at the centre of leadership and the media plays a key role in deepening that culture. We intend to have regular review sessions with you because we appreciate the role of the media in molding society,” she said.

Sensitisation of shippers and businesses to AfCFTA critical—AGI

he Volta and Eastern Regional Chairman of the Association of Ghana Industries (AGI), Mr. Dela Gadzanku has underscored the need for shippers and businesses to be sensitised to the benefits of the African Continental Free Trade Area (AfCFTA) agreement. This, he said , would help them to make informed business decisions in order to take advantage of the full potential of the agreement for the economic transformation of Ghana and Africa as a whole. Mr. Gadzanku made the call

on Wednesday when a team from the Ghana Shippers’ Authority(GSA) called on his office in Ho to discuss shipment and business related needs of members of the AGI. He said the AGI was doing its part to build the capacity of its members in business advisory support, partnering with the Ghana Standards Authority to offer training programmes on standardisation and certification of products, establishment of an e-platform for members to sell their products, among others. The Tema Branch Manager

of the GSA and leader of the delegation, Mrs. Monica Josiah reiterated the significance of the AfCFTA to the growth of local businesses stressing on the role of shipping and logistics in the successful implementation of the agreement. The GSA, she said , had started sensitisation programmes for shippers across the country on the benefits of the AfCFTA and what businesses need to do to take full advantage of its implementation. Mrs. Josiah stressed the need for the GSA and AGI to work together to address concerns

of shippers in Ghana. She appealed to members of the AGI to promptly report their shipment challenges to the GSA for early redress. In a related development at the 60th Volta Regional Shipper Committee meeting (VRSC), the Tema Branch Manager updated members of the Ho Committee of the VRSC on current happenings in the industry. She touched on progress of work on the Tema-Akosombo Railway project and status of the Boankra Integrated Logistics Terminal and the potential both projects portend for the growth of the shipping and logistics industry. She also sensitised the Committee members on the benefits of insuring their imports with local insurance companies. The visit to the Volta Region forms part of the GSA’s shipper visitation and outreach programme. The outreach programmes have been an avenue for identifying new shippers and having a one-onone engagement with them to highlight the services of the Authority and also address any peculiar challenges they may have.

FRIDAY OCTOBER 30, 2020

Banking

FRIDAY OCTOBER 30, 2020

UBA Ghana launches 2020 National Essay Competition

he United Bank for Africa (Ghana) has launched the seventh edition of the UBA National Essay Competition aimed at funding Senior High School (SHS) students in any university of their choice in Africa. The UBA Foundation National Essay Competition (NEC) which was launched in 2014 in Ghana has provided a competitive platform to develop the intellectual and writing abilities of SHS students in Ghana, and other African Countries where UBA operates and granting winners scholarships to study in any University in Africa. The competition in Ghana has so far produced over 18 winners currently studying in various universities in the country. The seventh edition promises to be more intriguing as it’s expected to witness an increase in the number of participants to over 5,000. The participating students will battle it out in the essay writing competition on the captivating topic: “You have been given the opportunity to speak at the U.N general assembly meeting

believe that giving back to the society through education can impact everybody and help the continent grow”. “This year, we hope to receive entries from applicants from secondary schools across the entire country. The advent of the novel coronavirus has also brought in its wake more innovation and therefore, we have modified the submission process to ensure ease of access and increased participation of senior secondary school students”. Online submission portal

Olalekan Balogun

in New York on the challenges facing education of the African Youth in the midst of the novel coronavirus pandemic. Write your speech”, unveiled at the launch. Speaking at the launch, UBA Ghana MD/CEO, Olalekan Balogun said: “UBA is very committed to the area of education of the African in a bid to transform the continent and achieve Africapitalism as espoused by our Chairman Mr. Tony Elumelu. Tony Elumelu’s

Africapitalism concept believes in using African resources to develop Africa and chief among them is the human resources”. Mr Balogun noted the essay competition forms part of UBA’s Corporate Social Responsibility (CSR) initiatives to support the educational sector in Ghana. He continued the UBA believes in the future of Africa’s youth and had therefore instituted a number of interventions in education to secure the future of the continent saying “we

Applicants can now submit entries through an online submission portal www.ubaghana.com/ nationalessaycompetition2020. He therefore urged students, teachers, parents and guardians from all parts of the country to continue supporting for the NEC project by participating or encouraging students to submit their entries. Prizes In spite of the challenges of the COVID, UBA has kept the winning prizes as US$5,000, US$3,000 and US$2,000 to assist the first, second and third place student to attend any University of their choice in Africa.

ADB receives ISO: 27001 certification

he Agricultural Development Bank (ADB) has earned the ISO 27001; 2013 Certification following a rigorous process by PECB Group based in Canada. The Managing Director of the Bank, Dr. John Kofi Mensah, disclosed that the certification process commenced last year and was completed successfully last month as part of its commitment in ensuring that customers information is secured and protected. The certification which applies to all core banking Processes, People, and Technology Systems at the bank is in line with global standards and Bank of Ghana directives for data protection. “The certification is a validation of our ability to provide adequate security for customer information and assure our valued customers that their information is safe, sound and secured with the bank,” he said.

Dr. John Kofi Mensah

According to the ADB Managing Director, the certification further validates the aim of the board, management and staff to make ADB, the people’s Bank especially in the area of agribusiness. He said that with the attainment of the ISO certification, structures and processes have been put in place to identify and elevate

information security risks and guard confidential information. “Receiving the ISO 27001 certification serves as an assurance to our customers that we see the security of their information as a top priority for our business,” he mentioned. Dr Mensah stated that due to high risk of cyberattacks, customers were drawn to banks who could provide information

security, confidentiality and integrity thus ISO 27001 giving ADB a competitive advantage. “We do not only have secure management and information systems but we are also compliant and also have better processes complimented by skilled staff to deliver excellent services to our customers,” the Managing Director added.

FRIDAY OCTOBER 30, 2020

Feature

FRIDAY OCTOBER 30, 2020

The big public debt debate: A historical analysis of Ghana’s public debt and fiscal deficits from 2001-2020 By Dr Theo Acheampong

hana’s social media and political space have been pre-occupied with the ‘ageold’ debate on public debt and which of the two political parties, namely the NPP and NDC, left the biggest hole in the country’s public finances. Stoking up the debate is a recently published (October 2020) IMF Sub Saharan Africa Regional Economic Outlook report in which the Fund is forecasting that the country’s debt-to-gross domestic product (GDP) will reach 76.7% by the end of 2020 - potentially the highest since 2002. The release comes ahead of the December 2020 presidential elections which is expected to be closely fought by the two parties. Some have indicated that Ghana is going back to the erstwhile Highly Indebted Poor Country (HIPC) status, but the IMF and other official releases have debunked this. So, what is the history of Ghana’s public debt and fiscal deficits since 2001? In the next section, I create various charts based on publicly available data to show the underlying trends and provide some contextual commentary. Public debt, deficit statistics and growth rates under NPP 1 (2001-2008), NDC 2 (2009-2016) and NPP 2 (2017-2019 and 2020 forecast) The IMF defines gross debt as follows: “gross debt consists of all liabilities that require payment or payments of interest and or principal by the debtor to the creditor at a date or dates in the future. This includes debt liabilities in the form of special drawing rights (SDRs), currency and deposits, debt securities, loans, insurance, pensions and standardised guarantee schemes, and other accounts payable” (Government Finance Statistics Manual, 2001, paragraph 7.110). The rate of growth or reduction means the frequency at which debt is added or subtracted annually. Computationally, it is taking the final number at the end of the party or president’s tenure divided by the beginning number and subtracting one from it. As Figure 1 and Table 1 show, Ghana’s gross public debt reduced by 33 percentage points between 2001 and 2004, and a further 27 percentage points between 2005 and 2008 during the second term of President Kufuor. This massive

reduction was due to the country signing on to the Heavily Indebted Poor Countries (HIPC) initiative in 2001 and Multilateral Debt Relief Initiative (MDRI) in 2005 – all under former President John Agyekum Kufuor. HIPC and MDRI came with a significant reduction in Ghana’s multilateral and bilateral debts owed to the likes of the IMF, World Bank and African Development Bank, among others. However, debt accumulation began to pick up in 2006 - when we recorded our lowest public debt of 18.6% of GDP - and has been on the ascendency to date (Figure 1). The NDC under the late President John-Evans Atta mills increased the public debt by 32 percentage points between 2009 and 2012 while President John Dramani Mahama also increased it by another 32 percentage points at the end of his tenure in 2016, despite the rebasing of Ghana’s GDP. In September 2018, the Ghana Statistical Service (GSS) rebased

its economic calculations from the base year of 2006 to 2013. The GSS had earlier changed the base year for Ghana’s GDP calculation from 1993 to 2006. This rebasing shrunk Ghana’s debt-to-GDP ratios from 2013 onwards. For example, Ghana’s GDP was worth 26 times more from the original USD42 billion to USD 53 billion in 2017. The base year is very important in determining the size of a country’s GDP and other metrics such as the public debt and overall debt sustainability analysis (DSA) which relies on it. Likewise, the rebasing meant that Ghana’s hitherto 72.5% debt-to-GDP at the end of 2016 had magically shrunk to 56.8% of the rebased GDP in 2016. These rebased figures created the expectations of extra fiscal space being available because after all, 57% is much better than 73%. No? The NPP, likewise, on winning the 2016 elections increased the public debt by 12 percentage points from 55.5% to 62.4% of rebased

GDP between 2017 and 2019 (Table 1). My assessment of the fiscal data indicates that Ghana’s public debt will increase by 33 percentage points representing 74% debt to GDP by the end of 2020 (Table 1). This includes additional COVID-19related expenditures and revenue downturns. Ghana’s public debt accumulation since 2017 has been driven primarily by the twin – financial and energy sector debts. Government has spent GHS21 billion (USD 3.7 billion or 5.6% of 2018 GDP) in cleaning up the financial sector (universal, savings and loans, microfinance) which commenced in August 2017. The COVID-19 pandemic will likely cause the country’s debt position to deteriorate further as revenue and expenditure targets are missed. The reality is that Ghana’s public debt has been growing every year since 2007, the only exceptions being 2011 and 2017 (see Figure 2).

CONTINUED ON PAGE 21

FRIDAY OCTOBER 30, 2020

News

FRIDAY OCTOBER 30, 2020

Rotary Club Accra Ring Road Central receives donation from FBN Bank

taff of FBNBank Ghana Limited including the Managing Director have presented an amount of GH¢10,865 in support of the Rotary Club of Accra Ring Road Central (RRC’s) “Walk for a Child” fund raising initiative. The donation will be channeled into two projects being undertaken by the Rotary Club of Accra RRC for the renovation and construction of classrooms and library for the Golden Spring School in Tetegu as well as the purchase of essential equipment for the children’s cancer unit at the Korle Bu Teaching Hospital. Mr. Enoch Vanderpuye, FBNBank Ghana Country Team Lead for Marketing & Corporate Communications who presented the donation said staff of the bank contributed to make the lives of the beneficiaries better because giving is a responsibility, we must all take seriously.

He gave the assurance that as a brand that puts its stakeholders at the heart of its business and remains committed to promoting the health and wellbeing of Ghanaians, FBNBank and its staff will continue to support the communities in which it operates. He stated that the donation by staff from all the branches was

in response to a call to support children that had needs. Mr. Vanderpuye was supported by other staff of the bank including the Managing Director, Mr. Victor Yaw Asante who himself is a Rotarian. Receiving the donation, Rosemary Puni, President of the Rotary Club of Accra Ring Road

Central expressed appreciation to the Management and staff of FBNBank Ghana. She revealed: “we are indeed touched by your kind gesture and generous donation. Your donation will go a long way to help improve lives of the community and for this the Rotary Club of Accra Ring Road Central is eternally grateful.”

Vodafone CEO urges engineering students to acquire practical experiences

he Chief Executive Officer (CEO) of Vodafone Ghana, Patricia Obo-Nai, has urged engineering students of Ashesi University to also seek practical experiences whilst in school. According to her, acquiring practical knowledge is key to the engineering course and it will enable them to fully understand what they learn in class. Speaking during the Engineering Department’s virtual programme dubbed, ‘Time with Engineers’, Mrs. Obo-Nai, who is a celebrated engineer, encouraged the student engineers to take up internships for the practical exposure. “Internships give young engineers the opportunities to meet people who have years of great engineering experiences. With internships, you are able to fully understand the theoretical aspects you have studied in the classroom. During internships, you learn how to work with people, fit in the working environment, build your professional competency and offer you the room to make mistakes and correct them. These experiences are valuable in the field of engineering,” Mrs. OboNai added.

She also advised the students to acquire diverse knowledge, be open-minded and try to make themselves relevant as engineers.

She said digital transitions happen every day, and due to these changes, the country have had to move from analogue to

digital. From 2G to 3G, then 3G to 4G, and now 4G to 5G. “It is therefore important to learn new things. Acquire advance technology knowledge because consumer needs keep changing. Therefore, you need to gain additional knowledge always,” she added. Touching on the importance of studying engineering, Mrs. OboNai said, “as an engineer, because you understand technology as it is embedded in everything that you do, it makes you very analytical. You also become a strong person since you come across and resolve complex problems on the job; you are able to build resilience as well. You are in the best place. To fully enjoy your courses, you must love what you are studying. If you hate it, it won’t be easy for you. Don’t try to impress anybody. Understand who you are. Read about the various programs and know the ones you are comfortable and flow with before you decide,” she said. She further encouraged female students to position themselves well to be able to fit in the engineering field, saying “though this field is male dominated and you will not be able to change the social bias, you must work hard to position yourself to be a valuable asset to your team and to the engineering career.”

FRIDAY OCTOBER 30, 2020

Feature

FRIDAY OCTOBER 30, 2020

Democratic victory to provide big push towards renewable energy By Institute of Energy Security

decisive win for the Democratic Party in the U.S. is a near-term catalyst for the renewable energy sector. The scenario for a Joe Biden win would speed up a push away from fossil fuels towards renewable energy. The assessment is based on the energy sector Manifestoes of the two key political parties, coupled with the promises made by the two candidates while on the campaign trail. Democrat’s aggressive energy plans are expected to alter consumer behavior without adding to consumer’s direct electricity and car costs, if implemented today. There would not be any additional cost because both the cost of producing “green” electricity and electric vehicles (EVs) is declining. The plan is also expected to create an estimated 10 million jobs across the United States. With less than a month to see the U.S. go to the poll, CNN poll suggest that President Donald Trump has hit a new low, trailing former Vice President Joe Biden by his largest margin of 16 points conducted in the entire 2020 election cycle. Joe Biden’s lead in the recent CNN poll is the best of any challenger since 1936, when the first scientific poll was conducted in a Presidential election. Joe Biden has proposed a staggering US$1.7 trillion in federal spending over the next decade to boost renewable energy production, leveraging additional private sector and state and local investments to total more than US$5 trillion. The US$1.7 trillion climate plan is geared towards changing America after Trump’s Big Oil presidency. Biden’s plan focuses on research and development (R&D) for clean energy, tax credits to fast track renewable power and electric vehicles. The restoration of the full EV tax credit, which is currently capped by manufacturers’ sales, and has already been cut for General Motors and Tesla, is to incentivize particularly middle class consumers and, to the greatest extent possible, to prioritize the purchase of made-in-America vehicles. The boosted R&D will focus on technologies including large-

scale battery power storage, and carbon capture and minimization, and modernizing infrastructure, including the country’s electricity grid and a nationwide network of public charging stations for EVs. The extension of existing tax credits for wind, solar, and battery storage is to encourage utilities and private power developers to build more solar and wind power plants, retire coal plants and replace with cleaner capacities, and to boost the acquisition of EVs. In addition, Biden intends to repeal the generous tax bonanza offered U.S. fossil fuels by Donald Trump, in a bid to recover taxpayer costs. Biden’s plan to make an historic investment in U.S. clean energy future and environmental justice is expected to be paid for by reversing the excesses of the Trump tax cuts for corporations. He is also expected to reduce incentives for tax havens, evasion, and outsourcing, ensuring corporations pay their fair share, closing other loopholes in U.S. tax code, and ending subsidies for fossil fuels. His win will see higher corporate tax rates for fossil producers,

more challenging infrastructure permit requirements and restricting permissions to drill on federal lands. Biden’s term in office may see the Environmental Protection Agency (EPA) pushing for regulations that make fossil emissions from oil, coal, and gas more inconvenient and expensive in nature. Fossil fuel infrastructure such as pipelines and export facilities would also face greater obstacles. The Democratic presidential hopeful’s fuel economy standard would force U.S. automobile manufacturers towards European standards for emissions. It is to establish an enforcement mechanism to achieve net-zero emissions no later than 2050, including a target no later than the end of Biden’s first term in 2025. On the other hand, President Donald Trump’s policies hinges on the deregulation of utilities carbon emissions, expanding drilling for oil and gas on federal lands and offshore. Trump second term offers continuity, with some further easing of regulations on the oil, gas and coal industries. Should Trump secure a win,

the U.S. power sector is likely to continue along the path it has followed in his first, with massive support for coal. The President has not proposed a climate plan. He rejects the idea of using government policy to cut Greenhouse gas (GHG) emissions, and talks about energy in terms of prices and jobs. There would be a continuation of his attempt to ease fuel economy standards, and of the administration’s legal challenge to California’s autonomy to set its own more stringent rules. Trump’s election campaign has signaled the extension until 2032 the moratorium on drilling off the coasts of Florida, Georgia, the Carolinas and Virginia. The re-election of Trump therefore would likely have a limited impact on the global energy sector. In contrast, Joe Biden administration’s policies of “clean energy revolution and climate justice” would likely accelerate the de-carbonization and electrification of energy – a complete structural shift in energy demand and investment, which may position the United States as the world’s clean-energy superpower.

FRIDAY OCTOBER 30, 2020

Feature

FRIDAY OCTOBER 30, 2020

The inventor inspired by wanting to keep his daughter safe

This Clear Win unit is in place on an escalator at London Stansted Airport

hen Kim Kyeong Yeon’s 13-year-old daughter fell and injured herself on an escalator, she set in train events that years later might prevent millions of people around the world from contracting Covid-19. The accident happened because the teenager didn’t want to hold the handrail due to hygiene concerns. Kyeong Yeon, a South Korean interior designer, realised that many other people did likewise for the same reason. So he decided he would have a go at inventing a sterilising system. This was in 2014, and a year later he unveiled his product. Called the Clear Win, it is a small unit that is attached to both sides of an escalator at the end where people get on, so that the handrails pass through them. Powered by a dynamo, which generates electricity from the constant movement of the escalator, the product beams sterilising ultraviolet light (specifically the UV-C wavelengths) on to the handrail as it moves through it, destroying all viruses and bacteria. As Kyeong Yeon had no experience of running a company, he brought on board his cousin, Kim Yoo Cheol, who was a businessman. Both were sure that they were sitting on a gold mine. “We were 100% convinced that it was going to be very successful, because when it was released in July 2015, South Korea had just come out of the Mers (Middle East Respiratory Syndrome) outbreak,” says Kyeong Yeon, who is 50. Mers is a coronavirus similar to Covid-19 and, like the current pandemic, South Koreans had been required to wear face

masks. However, the outbreak was much smaller than today’s, and passed more quickly. “No-one was interested in our product [at the time],” says Kyeong Yeon. For the next four years the Clear Win continued to fail to gain traction. “We wanted to demonstrate their usage [to potential customers], but we were met with cold rejections. People thought they were unnecessary and pointless.” Realising that time was running out, Yoo Cheol, who was in charge of the finances, even cancelled his health insurance to invest in the venture, without telling his wife. “Yoo Cheol would always say to me, ‘Let’s try for one more year.’ And a year later he would again say, ‘Just one more year,’” says Kyeong Yeon. Then 2020 and Covid-19 arrived. The two cousins have been inundated with orders from around the world ever since. They have now sold 43,000 units across 51 countries, including the UK, US, China, Japan and Saudi Arabia, with revenues this year of more than $14m (£11m). Their sterilisers have been installed at airports including London’s Heathrow and Stansted, shopping malls, hospitals, cinemas, football grounds including Arsenal’s Emirates Stadium, and even at Masjid al-Haram, the Great Mosque of Mecca. On Monday, Transport for London announced that it would be installing sanitising devices on 110 escalators in its underground stations, following a six-week trial using Clear Win devices at Heathrow T123 Tube station. Utilising UV-C light to disinfect things may sound futuristic, but

it has in fact been used for that purpose since it was discovered in the late 19th Century. The light, a form of electromagnetic radiation, kills viruses and bacteria by damaging their DNA so that they cannot multiply. UV-C is also damaging to human skin and eyes, so it should not be pointed at them. No UV-C light is released outside of the Clear Win unit. UV-C is produced by the Sun, but is absorbed by the Earth’s ozone layer. The two other main ultraviolet light wavelengths UV-A and UV-B - pass through. They are the types of ultraviolet light that people use sunscreen to protect themselves from. At the start of this year there had been some speculation about whether UV-C did indeed destroy SARS-CoV-2, the virus that causes Covid-19 the disease, but several studies have concluded that it does. These include a report this month from the American Journal of Infection Control. As the continuing pandemic has increased interest in using UV-C light as a sterilisation tool, the Clear Win device is just one of many such pieces of technology now on sale. At the start of October, Turkish home appliance brand Beko launched a new range of products that incorporated the use of UV-C light. These include a fridge, tumble dryer and a “UV cleaning cabinet”. The latter looks like a microwave, but users can put everything from mobile phones to keys, wallets, baby bottles and toys inside to be cleaned in 20 to 40-minute cycles. Hakan Bulgurlu, chief executive of Arcelik, Beko’s owner, says: “It has been a very difficult year [for everyone]. The products have been tailored

to help consumers achieve professional levels of hygiene at home, and protect them from infections and diseases.” US business Healthe also makes a small box that uses UV light to clean mobile phones and wallets, and it is now producing a “UV wand” for plane maker Boeing. The wand, a 2ft-long (60cm) strip of lights, which comes attached to a base unit that resembles a carry-on suitcase, is said to be able to sanitise a flight deck in less than 15 minutes. It projects a different type of ultraviolent light called “far-UV” which can kill viruses, but unlike UV-C cannot damage human eyes or skin. “Far-UVC light kills microbes, but is harmless to humans,” says Dr Alex Berezow, a microbiologist at the American Council on Science and Health. Back in South Korea, Kyeong Yeon and Yoo Cheol are looking to take on more staff to keep up with demand at their factory 20km (12 miles) south of the capital Seoul. “When things were especially difficult, we would drink beer by the Han River in Seoul to console each other. We still do that nowadays but instead to celebrate,” says Kyeong Yeon. “Even after the coronavirus pandemic has ended and our normal lives are resumed, I think many people around the world have been traumatised by this experience and might have fears for future viruses. “So we think there will be a sustained interest in public health conditions and hygiene, giving our products further room to grow. We will continue to cater to people’s demands for a safer world.” BBC

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News

FRIDAY OCTOBER 30, 2020

The big public debt debate: A historical analysis of Ghana’s public debt and fiscal deficits from 2001-2020 CONTINUED FROM PAGE 9 Also, the fiscal deficit since 2010 has never been below 5% of GDP despite a positive primary balance in some years (See Figure 3). The fiscal deficit is unlikely to reduce significantly over the next four years (2021-2024) due to the constrained revenue envelope and structural rigidities in the budget manifesting in extra expenditures, including debt servicing costs. Ghana has had to resort to external or commercial financing of its budget since it became a lower-middle-income country

(LMIC) in 2011 with loss of access to relatively cheaper concessional loans. Thus, commercial debt continues to be the largest source (41%) of external debt liabilities due to significant Eurobonds portfolio. Eurobonds have been a regular financing mechanism for Ghana; the country has borrowed USD12 billion in Eurobonds from 2007 to 2020. Also, about 70% of the external debt is dollardenominated with significant impacts for the cedi. For example, the amortisation of 2012 and 2014 Eurobonds are expected in 2024 and 2026, respectively. While the government reported deficits (overall balance including discrepancy) of 3.9% and 4.8% of GDP for 2018 and 2019, it is important to note that this excludes the cost of the financial sector clean-up. Essentially, the government, through the Ministry of Finance, was treating these costs as below the line or one-offs. Hence, the total deficit or overall balance (cash, discrepancy) including the financial sector clean-up cost) was much higher at 7.2% of GDP in 2017 and 5.8% of GDP in 2018

respectively, as indicated in the various fiscal outturn reports, which are publicly available on the finance ministry’s website. In conclusion, except for the Kufuor administration (20012008) which managed to bring down Ghana’s public debt levels significantly, both the Atta Mills (2009-2012), Mahama (2013-2016) and Akufo-Addo (2017-2020) administrations have added to the public debt in similar amounts. The writer is an economist and political risk analyst.

Huawei launches 2020 Seeds for the Future in Ghana …50 University Students to Benefit this Year

e a d i n g Te l e c o m m u n i c a t i o n s giant, Huawei Technologies, has launched the 6th edition of their global flagship Corporate Social Responsibility (CSR) initiative, ‘Ghana Sky Seeds for the Future programme’ in Accra. The programme, in partnership with the Ministry of Communication, the Ministry of Education, UNESCO, National Council of Tertiary Education, University of Ghana, Kwame Nkrumah University of Science and Technology (KNUST) and the Ghana Communications Technology University (GCTU) looks forward to giving 50 university students in STEM the opportunity to expand their scope in ICTs whiles advocating for more female participation. The intensive 5 days experience which will be held online, will introduce students to new technologies, equip them with necessary skills to enable them identify and harness new opportunities in ICT whiles offering them the opportunity to meet and connect with top ICT

professionals in the tech space. This year, beneficiaries will experience a virtual tour of the Huawei Head Quarters in China as they are taken through advanced courses like IoT, Cybersecurity, Digital Trade, Digital Economy, Cross-Cultural Management, Strategic Management, Leadership Skills and other open ecosystem trainings. Participants will also get the opportunity to experience Chinese Culture and hi-tech Huawei laboratories through various scheduled virtual tours as well as live interactions with industry leaders in Ghana and China. Speaking at the event, the Minister of State in charge of Tertiary Education, Hon. Kwesi Yankah applauded Huawei for the effort made in ensuring the 2020 Seeds for the Future Programme comes off successfully despite the difficult times we are in. “Government knows with gratitude, Huawei’s support of technical university across the country in capacity building, promoting cutting edge projects like 5g technology, cloud computing and Routing

&Switching and as a result highly appreciates the effort.,” he said, whiles entreating beneficiaries to embrace the project with all seriousness and cease the opportunity to learn and obtain the skillset needed to become useful to themselves and the country at large. Mr. Diallo Abdourahamane, Country Director, UNESCO Ghana, congratulated Huawei for prompting the 2020 Seeds for the Future program well in Ghana and contributing its quota towards ICT development across borders. “As an organization working with its member states to bring knowledge to societies that are inclusive, open and participatory, UNESCO does not only applaud your effort but recognizes Huawei as a partner in building knowledgeable societies. Prof. Felix Asante, ProVC for Research and Development, University of Ghana, further indicated that Huawei’s Seeds for the future initiate in very key and much appreciated by UG and as such they hope that through this collaboration, the digitization agenda of Ghana and UG as a

public university will be improved upon. “UG is very happy to be part of this launch and we will be glad to work with you to develop more ideas to support STEM in Ghana,” he said. Adding up to what the partners had reiterated earlier, Ing. Dr. Abdul-Rahman, Dean, Faculty of Electrical and Computer Engineering, KNUST, mentioned that ICT is the bedrock in the currency in which we transact businesses and engage citizens hence its relevance for current development by any country. Therefore, Huawei’s participation in making it possible for tertiary students to get quality skills in ICT is very significant and this is the kind of partnership KNUST looks forward to, in engaging students to make them relevant in the economy. In entreating student to take the programme seriously, Charge d’Affaires of the People’s Republic of China to Ghana, H.E. Zhu Jing encouraged students to make good use of the opportunity to develop Ghana’s ICT Talent pool and broaden their horizon.

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FRIDAY OCTOBER 30, 2020