Business24 Newspaper 13th November, 2020 by Business24 Online

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FRIDAY NOVEMBER 13, 2020

NO. B24 / 126 | NEWS FOR BUSINESS LEADERS

FRIDAY NOVEMBER 13, 2020

Agyapa faces uncertain path to London

Business sentiments on employment improve marginally By Joshua Worlasi Amlanu macjosh1922@gmail.com

usinesses’ anticipation over the impact of the pandemic on job losses has improved marginally from the earlier dire sentiments captured in the Ghana Statistical Service’s Business Tracker Survey. Cont’d on page 3

Inflation drops for third consecutive month By Joshua Worlasi Amlanu macjosh1922@gmail.com

Ken Ofori-Atta’s faces a long wait in his attempt to raise US$500m on the London bourse via the Agyapa IPO

By Nii Annerquaye Abbey annerquaye@gmail.com

he prospects of Agyapa Royalties, the company set up by government to leverage the country’s future gold royalties for half a billion dollars on the London

Stock Exchange, are uncertain as pressure mounts on government to abandon the planned initial public offering (IPO). Ken Ofori-Atta, the Finance Minister, had revealed government’s intention to list the company on the London

ECONOMIC INDICATORS EXCHANGE RATE (INT. RATE)

bourse by year’s end, before the deal was rocked by multiple challenges from civil society organisations (CSOs) over the IPO’s valuation as well as the transparency of the process. 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

onsumer inflation has for the third consecutive month seen a decline reaching 10.1 percent in October. At the release of the latest data, the Government Statistician, Professor Samuel Kobina Annim said,

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 NOVEMBER 14 13, 2020 2020 MONDAY SEPTEMBER

EDITORIAL Editorial

Wash your hands 2

Cover your cough 3

Pay before boarding order needs a rethink

The Agyapa way forward

The new directive for all passengers to pay for their he controversies COVID-19 test online before their the Agyapa arrivalsurrounding at Kotoka International dealhas have dominated the Airport been meet with resentment by airlines and news for at least the past three passengers. months. At a time government when passengershad are While still coming to terms with the maintained that 900� the deal is in the US$150 � GHC mandatory best interest Ghanaians, civil payment for of COVID-19 test upon arrival at KIA, the new society organisations as directive well as has generated more debate. other stakeholders have gone Passengers travelling to Ghana great lengths to point out flaws will from Tuesday, September 15 in the deal. be required to make online Indeed this paper that payments for thebelieves mandatory government’s C O V I D - 1 9 t emove s t a tto Koffload otoka International Airport prior to shares in Agyapa Royalties on the boarding of their flight, London Stock Exchange to raisea directive by Frontier funds development H e a l ttoh finance Care� th e c o m p a nisy in itself not entirely a badout idea. contracted to carry the antigen test at KIA--to all airlines But listening to CSOs, the Office on Friday has revealed. of the Special Prosecutor as well B y t experts, h e n e wthere d i rseems e c t i vto e, as other “Passengers are required to show be fundamental disagreement proof of payment to airlines as a regarding processes leading to the listing in London.

condition for boarding of flights to KIA.” What is clear is that all parties, T h e n e wand d iCSOs, re c t ive , they has government say however, been described by are working the interesttoof the airlines as in detrimental the people which is nottoin doubt. renewed efforts stimulate demand for airwelcoming travel, given that that It was cash payments remains government called the CSOsthe to predominant mode of payment the table Ghanaian to listen totravelers. some of their for most concerns raised on the deal. This An airline operator who afforded opportunity to wishes tothem remain anonymous, make input and offer suggestions told Business24 that “The cost is already too high and now that would shape the deal. this new is also to the be Butpolicy given the workgoing done by implemented. There are Office of the Prosecutor hundreds of Special Ghanaian traders on risk-of-corruption and whothe travel to buy goods to retail in the country. anti-corruption assessment, the “Most of them t carry any CSOs argue that don� the deal needs electronic payment cards to be to be jettisoned altogether. able to pay online. They should In a press conference earlier have the flexibility to pay cash this the coalition lauded whenweek, they arrive.” theThe work done by the Special Consumer Protection Prosecutor, adding that the Agency � CPA� has also raised critical questions the revelations providedabout sunshine relatively high cost of the on the concerns they had earlier

raised.

country� s COVID-19 testing regime. The coalition did not only The Chiefas Executive describeCPA� thes deal “defective Officer, Kofi Kapito, said in as and beyond repair” but much as the government wantalso to called imported for the entire curb casesagreement of the respiratory disease, it must not to be terminated. burden the passenger but to charge Much as there appear be a what is enough to cover their lot for onprofit one hand, cost andCSOs, not to from and the government, on the other, to passenger. disagree on, thisAfrica paperand believes “Look around you thatthat the two parties should see what is paid in Ghana for the test is the highest. Why explore the areas where they should that be� ” have consensus. He also raisedjust questions about This paper, like the two why the Noguchi Memorial parties, believes in leveraging Institute for Medical Research of the University country’sof Ghana, resources for the was not made to handle projects. the testing Given for a development reasonable fee but have rather a how these resources been contract given to a foreign wantonly dissipated in the past, company to do what Noguchi there adequately is the need to let history could handle. beBusiness24 our guidewould so we fail likedon’t to urge generations that are to come a flexible approach that allows passengers after us. to either pay online or cash on arrival. Agyapa must leave on, we

need to clear every doubt!

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

Agyapa faces uncertain path to London CONTINUED FROM COVER

that the desired outcomes are achieved and the economy Continued from cover brought back on track.”

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Mr. Awuah� s remarks were The controversy invited the reinforced by majority of the top intervention of the Office of the bank executives who responded Special which to the Prosecutor survey. The(OSP), respondents conducted a risk-of-corruption advised the Bank of Ghana to and anti-corruption increase stakeholder assessment consultation of transaction. inthe order to propose more The findings beneficial policies.of the OSP, published last week, to This, they said, pointed will help several procurement breaches estimate the timelines and extent by the Ministry of Finance, to which the policies of the regulator will remain available. with President Akufo-Addo S o m e r e s p odirecting n d e n t s that s i mthe ply consequently thought that there was the need deal be taken back to Parliament for detailed guidelines from the for the anomalies to be rectified. government and Bank of Ghana In August, when the Agyapa on the implement ation of deal was approved by legislators, measures put in place to curb the the Finance had argued impact of theMinister pandemic. that government was keen to In their view, clear guidance launch the IPO in time to benefit was missing, and though this from the record-high gold price could be shared during on the world market. stakeholder consultation, they On August 14, the could not fully embed the day new Parliament off on the policies in signed operational strategy deal, goldatraded at US$1,944 per without detailed documented directive. ounce – a 28.3 percent increase since the beginning of the year. That was exactlybanking three months Post-pandemic ago, and the price of gold has When asked by the audit firm remained relatively stable then, about how the pandemic� recording only a 3.8 percent s

outbreak had transformed their team structures to the new way of operations, the bank chiefs working in order to maximise decline. consultative process for options responded that the immediate efficiencies of digital banking, However, Agyapa’s uncertain to gettingoperations the best response was to enforce remote and and solutions ensure less-paper future casts on whether our mineral resources,” working whiledoubt realigning workers� value and for requirements for social government would be able to said Dr. one roles. distancing.Steve In theManteaw, long run, these ride the the wave of the the spokespersons the measures may result in for possible While majority, 69 metal’s percent, of exceptional price inindicated 2020. layoffs forcoalition. some whose jobs of respondents that 25-member automated,” report remote working will become a become Commenting on the whether said. permanent CSOs’ fight option going forward, investors would still be Commenting on the findings there was general consensus that interested in Agyapa should itof the survey, which was onand the the new norm will ultimately lead The coalition of civil society debut in London, economist to the shedding of workers whose theme “The new normal� banks� organisations which has been political risk analyst Dr. Theo response to COVID-19”, PwC� s jobs have become automated. fighting the deal believes it is Acheampong said the prevailing “ M o s t b a n k s i n t e n d t o Country Senior Partner, Vish better government abandons price willcautioned continue tothat endear Ashiagbor, for permanently incorporate remote gold the Agyapa idea and devises the IPO to investors. working as an option available to workers that survive the digital another means of roles. maximising “I g re think s s i o nthere’s , t hey still, h aveandto staff based on their 12.5� of p ro the benefits from that the country’s be, their appetite fortotheremain deal upgrade skills banks confirmed they have would mineral gold prices continue to remain already royalties. begun and will continue ifrelevant. toInrealign theconference job roles and work high. The PE (price-to-earnings) a press earlier this week, the coalition lauded multiples may come down a the work done by the Special bit to reflect the political risk Prosecutor, adding that the associated with the transaction, revelations provided sunshine that is, the likelihood of on the concerns they had earlier cancellation if a new government raised. comes into power.” The coalition did not only But just like the CSOs, Dr. describe the deal as “defective Acheampong wants government and beyond repair” but also to abandon the planned IPO, if called for the entire ADVERTISE agreement possible – his reasons include the WITH US to be terminated. presence TEL: +233 024 212 2742of mistrust and the lack “The abrogation of the Agyapa of consultation at the formation transaction should www.thebusiness24online.net lay the stage of the deal. grounds for a more open and

FRIDAY NOVEMBER 13, 2020

Business sentiments on employment improve marginally Continued from cover The latest survey conducted between August and September has businesses predicting that eight percent of all jobs are likely to be lost in the next six months – an improvement in the first survey which predicted 14 percent job losses. According to the survey, firms outlook on sales and employment improved under the most likely scenario, between the two rounds. While firms held the view in May-June that sales and employment would fall by one percent and 6 percent respectively over a six-month period -- compared to the same period last year, expectations for the most likely scenario improved in August-September to 14 percent and 2 percent respectively. The finding also showed that the most optimistic scenario expected by firms did not change much in terms of sales but improved in terms of employment. Despite improvements over

the first-round results, the latest results indicate that the COVID-19 shocks forced many firms to continue to cut costs by reducing staff hours, wages, and in some cases laying off workers. About 297,088 estimated workers had their wages reduced in August-September, whilst 230,361 estimated workers had reductions in their working hours with 11,986 estimated employees laid-off. Policies The results of the survey also suggested that policies are needed to support firms both in the shortand medium-terms. “The continued decrease in demand as well as difficulties in financing cash shortfalls put many firms in a difficult position. In view of this, the Government Statistician, Professor Samuel Kobina Annim noted, saying; “firms continue to report that measures at improving liquidity (subsidized interest rates, cash transfers and deferral of

payments) are the most desired policies.” “The share of firms having received support almost tripled in the second round compared to the first round, with currently 9 percent of firms (up from 3 percent during the first-round survey) reporting that they have received government support. Many firms continue to indicate that they were not aware of support programs, suggesting the need for increased awareness and clarity on the guidelines and requirements of current programs,” he said. In the medium and longer term,

Inflation drops for third consecutive month Continued from cover “We recorded a rate of inflation for the month of September at 10.4 percent and now we are reporting a rate of 10.1 percent, which means that prices relatively have gone up but the rate at which it has gone up has reduced by 0.3

percent.” “This indicates that we are 0.2 percentage point away from the single digit we aspire to reach as a country. For the first time in the last two months, we see that food contribution to year-onyear inflation has risen beyond 50 percent, specifically at 54.7

Government Statistician, Professor Samuel Kobina Annim

percent,” he added. The combined consumer price index measures the change over time in the general price level of goods and services that households acquire for the purpose of consumption. The consistent drop in inflation towards the Bank of Ghana’s

the results of the survey suggest that more efforts should be concentrated on re-establishing supply channels, as well as ensuring access to finance and access to foreign markets. This is expected to boost demand, which will be crucial for firms to regain productivity. “Policies can support the private sector in the recovery stage in several ways. Three avenues include providing credit guarantee schemes for those accessing finance, assisting with input procurement, and facilitating trade,” the survey noted. target band of 6-10 percent could create a window of opportunity for the central bank to ease the monetary policy rate at its next meeting. Food and non-food inflation The food and non-alcoholic beverages division recorded a year-on-year inflation rate of 12.6 percent, representing 1.4 percentage point higher than in August 2020 at 11.2 percent. This higher inflation rate for food translates into food having a higher contribution to overall inflation. Food contributed 54.7 percent to the total inflation and thus is still the predominant driver of year-on-year inflation. Within the food division, vegetables recorded inflation at 24.9 percent, which was the subclass with the highest rates of inflation. This high inflation for vegetables is explained by the relatively low index for vegetables back in October 2019. In contrast to food inflation, non-food inflation decreased, recording a year-on-year inflation of 8.3 percent. This is the lowest rate since April 2020.

FRIDAY NOVEMBER 13, 2020

News

FRIDAY NOVEMBER 13, 2020

First National Bank expects big spike in Black Friday purchases this year

hile the concept of Black Friday is purported to have emerged from the United States of America, it has become quite popular in urban Ghana. This is as a result of the enormous business and product deals offered by merchants and service providers, which usually leads to increased purchases towards the Christmas holidays. In consideration of the many electronic transactions by patrons of Black Friday, First National Bank is expecting a 100% increase in purchases on Friday, November 27, 2020. Hannah Annobil-Acquah, First National Bank’s Head of Retail Banking says: “We expect the value of Black Friday transactions to rise significantly this year. When comparing typical Friday spend to Black Friday, we usually see a 100% increase in spend by customers.” Hannah is however, urging proper financial planning towards Black Friday and the

Hannah Annobil-Acquah,

Christmas festivities. “We encourage consumers to be mindful that Black Friday is effectively the start of a very long festive season, therefore it’s important to plan for it properly and budget for purchases,” she says. “Those participating should also consider making purchases for Back to School necessities to ease possible financial pressure at the beginning of next year.” Increasingly, consumers are choosing convenient ways to shop

on Black Friday. According to the statement from First National Bank Ghana, there was an increase in online and in-app transactions on Black Friday by 26% while card present transactions saw a 14% increase in 2019. “We estimate card present transactions to make up the majority of consumer spend this year, but also expect consistent growth in online purchases. Currently, online merchants continue to be in the top 10 of

retailers where First National Bank customers prefer to spend on Black Friday.” Mrs Annobil-Acquah further stated that the Black Friday euphoria is a perfect opportunity for customers who do not have their gold or platinum cards to get one from the bank. “We encourage customers to minimise reliance on cash, especially for larger purchases. More importantly, by enabling consumers to tap to pay, retailers can process transactions faster, reduce queue times and the risk of basket abandonment.” “It is a good time to be a First National Bank customer and even a better time to get and use your gold or platinum card. You get a three-tier benefit if you are purchasing anything towards Christmas and the new year during this Black Friday period. First National Bank pays you for every swipe for payment, you get deals from our merchants and then earn interest on your gold or platinum cheque account. You certainly are on the great helpful side with First National Bank gold or platinum account,” she ended.

Airlines urged to take decisive measures to remain resilient

he African Airlines Association (AFRAA) has made a rallying call on airlines operating in Africa to take decisive measures to build resilience and emerge stronger after the COVID-19 pandemic. Participants at the AFRAA’s 52nd General Assembly Meeting, held virtually, called on African governments to adopt multisectoral and pragmatic approaches to support the recovery of the air transport and interrelated sectors like the tourism industry. The Association welcomed two airlines at its General Meeting; Overland Airways Limited, and Syphax Airways, thus increasing the membership to 47. Also, De Havilland Canada, PRODIGY Avia Solutions Limited and South African Tourism, joined the Association’s partnership programme. The partnership programme serves as a forum for industryrelated organisations to support the development of air transport in Africa. Mr Ricardo de Abreu, the Transport Minister of Angola, who was the Chief Guest, emphasised the important role airlines played in the aviation industry to facilitate trade of many economies. “As we collectively navigate these times, we will seek to emerge

from this pandemic more resilient, organised and determined to succeed,” he said. The meeting was hosted by TAAG Angola Airlines on the theme: “Redefining Air Transport for a New Era”. It brought together top African airline chief executive officers, industry partners, and leaders of international and regional air transport associations. Others were representatives of the African Union, the International Air Transport Association, and International Civil Aviation Organisation among others, with delegates from 76 countries worldwide. A comprehensive analysis of the industry’s outlook for 2021 and beyond was presented in the AFRAA’s Annual Report. The meeting discussed plans of recovering air traffic in Africa, especially highlighting the need to start recovery with domestic markets. Intra-African routes are projected to follow suit, while international traffic is expected to take more time to reach precrisis levels due to a challenging operating environment, according to the Report. During the meeting, key stakeholders emphasised the importance of coordinated efforts

Rui Carreira

and collaborative approach as the surest way to securing business continuity. They also appealed to governments and development financial institutions to continue supporting the industry as a means to securing the continent’s social and economic recovery, given the sector’s strategic contribution to national Gross Domestic Product. Mr Rui Carreira, TAAG Angola Chief Executive Officer, said strategic deliberations at the meeting would set the foundation for the recovery and successful restart of the industry. “Although we foresee a slow recovery, we are currently implementing key measures that will restore passenger confidence and optimize our operations for a more affordable and successful industry,” he said. The 52nd AFRAA saw the re-

election of Mr Carreira as President of the Association for 2021. Desire Bantu Balazire, the Chief Executive of Congo Airways, was elected Chairman of the Executive Committee, with Yvonne Makolo, Chief Executive of RwandAir, being elected First Vice Chairperson and Amal Mint Maouloud, CEO of Mauritania Airlines elected 2nd Vice Chairperson for 2021. The African Airlines Association is a trade association of airlines from the member states of the African Union (AU). It was founded in Accra, Ghana, in April 1968, and headquartered in Nairobi, Kenya. AFRAA’s mission is to promote, serve airlines and champion Africa’s aviation industry. The Association envisions a sustainable, interconnected and affordable air transport industry in Africa to drive economic growth.

FRIDAY NOVEMBER 13, 2020

News

FRIDAY NOVEMBER 13, 2020

World Bank supports Ghana with US$130m to boost COVID-19 response

he World Bank Board of Executive Directors on November 10, 2020 approved an additional credit of US$130 million from the International Development Association (IDA) for the Ghana COVID-19 Emergency Preparedness and Response Project. This additional financing will support Ghana to scale up its efforts to mitigate the resurgence of the COVID-19 pandemic and to safely reopen its economy. “This additional funding is timely and critical to save lives and build resilient systems by further increasing capacity of surveillance, diagnosis, treatment with increased availability of intensive care unit beds and adopt new COVID-19 medications. These are integral efforts towards the broader objective of achieving Universal Health Coverage, which Ghana has committed as a priority,” said Pierre Laporte, The World Bank Country Director for Ghana, Liberia and Sierra Leone. The project will strengthen the Government of Ghana’s efforts to prevent and contain the virus and to safely revive socioeconomic activities in the country. It will also support preparations for future COVID-19 vaccine deployment.

Pierre Laporte, The World Bank Country Director for Ghana, Liberia and Sierra Leone

“The project complements both the World Bank Group and other development partners’ investments in disease control and surveillance, and citizen engagement. We will continue to work closely with other partners to support the scale up of Ghana’s COVID-19 response and secure essential health and nutrition service delivery,” said Anthony Seddoh, Senior Health Specialist at the World Bank Group. The project will also expand communications and awareness campaigns nationwide to

reduce risks of infection and to increase understanding of the COVID-19 vaccines. It will also increase support to persons with disabilities and other vulnerable groups such as survivors from gender-based violence, who have been disproportionally affected by the pandemic. With this additional financing the World Bank has delivered a total of US$1.005 billion in IDA resources to Ghana during 2020, which was complemented by US$86.6 million in Bank-managed Trust Fund resources.

This is the highest level of support provided by the World Bank to Ghana in a single year since the country joined the institution and covered a range of sectors namely Health, Education, Jobs and Skills, Water and Sanitation, Transport, Digital Transformation, Development Finance, and Statistics. The World Bank Group, one of the largest sources of funding and knowledge for developing countries, is taking broad, fast action to help developing countries strengthen their pandemic response. It is supporting public health interventions, working to ensure the flow of critical supplies and equipment, and helping the private sector continue to operate and sustain jobs. The World Bank Group is making available up to $160 billion over a 15-month period ending June 2021 to help more than 100 countries protect the poor and vulnerable, support businesses, and bolster economic recovery. This includes $50 billion of new IDA resources through grants and highly concessional loans and $12 billion for developing countries to finance the purchase and distribution of COVID-19 vaccines.

Organisation seeking to resolve inadequate blood supply launched

collaboration of stakeholders in the public and private sectors across sub-Saharan Africa (SSA) launched the Coalition of Blood for Africa (CoBA) on a virtual platform. This reflects a growing consensus that progress toward adequate, safe and sustainable blood in Africa requires multistakeholder, multi-pronged and innovative approaches to impact lives across the continent. Blood is a vital healthcare resource. It is most often used in Africa to treat pregnancyrelated complications and severe childhood anemia that is caused by a variety of contributors including malaria and sickle cell disease. Blood is increasingly important for patients with kidney failure who are on dialysis and to help cancer patients. The World Health Organization (WHO) states that the number of units of blood needed to sustain an adequate level of health equals 1% of a nation’s population – 10 units per 1000 people. Yet many

African countries fall well short of the minimum goal. The lack of infrastructure and equipment for collection and processing of blood components is a key impediment to providing a sustainable blood supply. Though blood and safe transfusion services are essential parts of any strong health system, the safety, sustainability and adequacy of blood remains a major health challenge in many African countries. “Today is about mobilizing action, as we convene the first ever Coalition of Blood in Africa,” said Antoinette Gawin, President and Chief Executive Officer, Terumo Blood and Cell Technologies. “The coalition’s goal is to support the World Health Organization’s commitments [WHA63.12] and aligns with our global mission to serve more patients. Providing safe access to blood in Africa is one way to achieve this.” The coalition is anchored on three pillars, namely; reflection, which targets supporting informed-decision making with

Photo of Ghanaian Queen Mothers: The Coalition of Blood for Africa (CoBA) is anchored on three pillars: reflection, dialogue and action.

research, policy analysis and data collection. The second pillar focuses on dialogue, which creates awareness about the need for blood and blood safety, whereas the third pillar, focusing on action by providing technical assistance to support initiatives, capacitybuilding programs and activities like blood collection drives. The coalition brings together an unprecedented array of health experts, including publicsector research institutes, ministries of health, academia, not-for-profit research and development organizations, NGOs, international organizations and funders all committed to finding solutions to address the

challenges facing access to safe, sustainable blood in Africa. “The scale of the challenge is clearly beyond the scope of a single organization and I am confident that the Coalition will facilitate a coordinated approach to address the challenges facing blood in Africa and find sustainable solutions,” says Gavin Evans, Executive Director, Global Blood Fund. The launch of CoBA was convened by Terumo Blood and Cell Technologies, a global leader in blood component, therapeutic apheresis and cell technology, in collaboration with Global Blood Fund, Africa Practice, Africa Health Business and Siemens Healthineers.

FRIDAY NOVEMBER 13, 2020

Banking

FRIDAY NOVEMBER 13, 2020

Future of business travel unclear as virus upends work life

rian Contreras represents the worst fears of the lucrative business travel industry. A partner account executive at a U.S. tech firm, Contreras was used to traveling frequently for his company. But nine months into the pandemic, he and thousands of others are working from home and dialing into video conferences instead of boarding planes. Contreras manages his North American accounts from Sacramento, California and doesn’t expect to travel for work until the middle of next year. Even then, he’s not sure how much he will need to. “Maybe it’s just the acceptance of the new normal. I have all of the resources necessary to be on the calls, all of the communicative devices to make sure I can do my job,” he said. “There’s an element of face-to-face that’s necessary, but I would be OK without it.” That trend could spell big trouble for hotels, airlines, convention centers and other industries that rely so heavily on business travelers like Contreras. Work travel represented 21% of the $8.9 trillion spent on global travel and tourism in 2019, according to the World Travel and Tourism Council. Delta Air Lines CEO Ed Bastian recently suggested business travel might settle into a “new normal” that is 10% to 20% lower than it used to be. “I do think corporate travel is going to come back faster than people suspect. I just don’t know if it will be come back to the full volume,” Bastian told The Associated Press. Right now, Delta’s business travel revenue is down 85%. Dubai-based MBC Group, which operates 18 television

stations, says it’s unlikely employees will travel as often once the pandemic ends because they’ve proven they don’t need to. “We have managed to deliver projects and negotiate deals very successfully, though remotely,” MBC spokesman Mazen Hayek said. MBC has reduced trips by more than 85%, Hayek said. Amazon, which told it employees to stop traveling in March, says it has saved nearly $1 billion in travel expenses so far this year. The online shopping giant, with more than 1.1 million employees, is the second-largest employer in the U.S. At Southwest Airlines, CEO Gary Kelly said while overall passenger revenue is down 70%, business travel — normally more than one-third of Southwest’s traffic -- is off 90%. “I think that’s going to continue for a long time. I’m very confident it will recover and pass 2019 levels, I just don’t know when,” Kelly told the AP. U.S. hotels relied on business travel for around half their revenue in 2019, or closer to 60% in big cities like Washington, according to Cindy Estis Green, the CEO of hospitality data firm Kalibri Labs. Peter Belobaba, who teaches airline management at MIT, said business travel is down partly because some people are afraid to fly and partly because companies fear liability if employees contract COVID-19 while traveling for work. Companies have also reined in travel because times are lean, he said. ExxonMobil cut business travel in February — even before the pandemic’s full impact was felt in the U.S. — because of falling global demand for oil. Those who want to travel

may also be limited by travel restrictions, Belobaba added. Last month, Polestar CEO Thomas Ingenlath observed a mandatory 14-day quarantine in China after flying in from Sweden for the Beijing Auto Show. Polestar, an electric car brand jointly owned by Sweden’s Volvo and China’s Geely, has always tried to limit travel for environmental reasons. But the 14-day quarantine has restricted travel even further, said Kiki Liu, Polestar’s head of communications. The cutback in travel has been a boon for teleconferencing services. Zoom said it had 370,200 customer businesses with at least 10 employees at the end of July, more than triple the number it had at the end of April. But for some workers, teleconferencing can’t replace being there in person. Rebecca Lindland, an automotive consultant and founder of Rebecca Drives, used to travel 38 weeks each year for test drives and auto shows. This year, she didn’t fly from March until September. Test drives have been cut back to regional events, so attendees don’t have to travel as far. Lindland misses the downtime air travel gave her, and she’s confident she can return to the skies safely. She wears a mask, and even before the pandemic she always carried Lysol wipes and hand sanitizer. “I’ve been wiping down my tray tables since 1985,” she said with a laugh. Sam Clarke, an assistant professor in the college of business at California State University San Marcos, agrees that some in-person events — like trade shows — will still be important in the future. But he

thinks new kinds of business travel could also emerge. Lockdowns have taught employees how to adapt to different work environments, he says, so hotels, airlines and even cruise ships should beef up their connectivity and cater to business travelers. Late last month, Marriott introduced flexible options aimed at business travelers, including one-day stays with an evening check-out. Clarke also expects some companies will flip their travel. Instead of letting a few executives travel a lot, he said, companies could let most employees work from home and fly them all back to their headquarters once a year. Some businesses are already changing the way their work is done. Cynthia Kay and Co., a media production company based in Grand Rapids, Michigan, used to send its seven employees around the country to make videos for clients like Siemens. When travel came to a halt in March, the company invested in proprietary software and sent iPads and other equipment to clients so it could coach them through their own video shoots, President Cynthia Kay said. As a result, the company’s sales are down only 15-20% even though its travel spending has plunged 75%. Still, Kay and her staff were eager to get back on the road once they felt they could do that safely. Kay began traveling again last month. “For some people, this is the way they will work going forward,” Kay said. “But you can’t account for the spark that happens when you get people in the same room.” AP

FRIDAY NOVEMBER 13, 2020

Feature

FRIDAY NOVEMBER 13, 2020

How artificial intelligence may be making you buy things

he shopping lists we used to scribble on the back of an envelope are increasingly already known by the supermarkets we frequent. Firstly via the loyalty cards we scan at checkouts, and more and more so from our online baskets, our shopping habits are no longer a secret. But now more retailers are using AI (artificial intelligence) - software systems that can learn for themselves - to try to automatically predict and encourage our very specific preferences and purchases like never before. Retail consultant Daniel Burke, of Blick Rothenberg, calls this “the holy grail... to build up a profile of customers and suggest a product before they realise it is what they wanted”. So the next time you dash into your local shop to buy certain snacks and a particular wine on a Friday night, perhaps you can blame AI, and a computer that has learned all about you, for the decision. Will Broome is the founder of Ubamarket, a UK firm that makes a shopping app that allows people to pay for items via their phones, make lists, and scan products for ingredients and allergens. “Our AI system tracks people’s behaviour patterns rather than their purchases, and the more you shop the more the AI knows about what kinds of products you like,” he says. “The AI module is designed not only to do the obvious stuff, but it learns as it goes along and becomes anticipatory. It can start to build a picture of how likely you are to try a different brand, or to buy chocolate on a Saturday.” And it can offer what he calls “hyper-personalised offers”, like

cheaper wine on a Friday night. Ubamarket has struggled to persuade the UK’s biggest supermarkets to adopt the app, so it has instead done deals with smaller convenience shop chains in the UK including Spar, Co-op and Budgens, stores not traditionally associated with hitech. Take-up of the app remains low but it is growing, in part thanks to the coronavirus pandemic, which has made people more reluctant to touch tills or stand in queues. “With the app we have found that the average contents of a basket are up 20%, and people with the app are three times more likely to return to shop in that store,” says Mr Broome. In Germany, a Berlin start-up called SO1 is doing similar things with its AI system for retailers. It claims that nine times more people buy AI-suggested goods than those offered by traditional promotions, even when the discounts are 30% less. Getting offers on goods that you actually might want to buy rather than random coupons is great for consumers. However, Jeni Tennison, who heads up the UK’s Open Data Institute, a body that campaigns against the misuse of data, remains cautious about the vast amounts of information on people that is being collected. “People are happy to be recommended products, but start to feel more uncomfortable when they are being nudged, or manipulated, into particular buys based on a caricature of who they are rather than the full complexity of their personality,” she says. And she adds that there are bigger societal questions raised by the use of AI in retail. “We need to ask how equitable and ethical the data collection

is. So, for example, are middleclass white women being offered money off fresh vegetables, but it is not being offered to someone who could really benefit from it?” says Ms Tennison. “What we really need to understand is what impact data collection and profiling has on different sectors of society. Is it profiling people based on race, social economic status, sexuality?” Online giant Amazon is no stranger to data collection. It has vast amounts of information on its customers from their online purchases, and via its products such as Ring doorbells and Echo speakers. It is now making a move into physical retailing, with bricks-and-mortar shops packed full of AI-aided computer vision technology. It means that in its Amazon Go grocery stores, currently up and running at 27 locations in the US, people can shop with no interaction with a human or a till. They simply swipe their smartphones on the scanner when they enter the supermarket, pick up what they want to buy, and then just walk out. The AI is watching of course, and sends you a bill at the end. The first Amazon Go stores were small sites, because of the expense of the sensors and equipment needed, but the company is gradually expanding to larger stores. Amazon is also working on tech for supermarkets that don’t want to retrofit their stores with such costly systems. This is where its Dash Cart comes in, a supermarket trolley that is packed with sensors to detect and collate everything you put in. In the Los Angeles store where it is being tested, it has a special

fast lane to check out, without the need for a human, of course. Another US retailer, Kroger, is experimenting with smart shelves fitted with LCD displays that beam contextualised content designed to draw customers towards them. Some display offers and personalised content by connecting via Bluetooth to loyalty apps on phones. More than three-quarters of large retailers around the world either have AI systems now in place, or plan to install them before the end of the year, according to research group Gartner. Its analyst Sandeep Unni says the global pandemic has accelerated this trend because it has dramatically changed consumer habits. “People panic bought, and focused on essential rather than non-essential goods, which in turn created a huge supply-demand imbalance,” he says. “This meant that we saw shelves becoming empty, and demand forecasting was suddenly not working.” US firm Afresh makes AI-based supply systems for supermarkets to help best plan for what stock levels are required. Afresh founder Matt Schwartz says that staff have to teach the AI systems about key events in the calendar, such as the recent Halloween. “Historically taking account of things like holidays [and other events] has been one of the biggest challenges for AI,” he says. “[And] we can’t fully automate away the humans. The AI may suggest 20 cases of pumpkins for October, and the humans can adjust that if they need to.” BBC

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Special Economic Zones in Ghana, Blessings or a Mixed Bag?

arely a month to the December 2020 polls in Ghana, and in line with calls for issues-based electioneering, the logic and operation of Special Economic Zones (SEZs) or Free Zone enclaves in Ghana, their fiscal regimes and the wellbeing of the Ghanaian worker within them, need to make it to the economic and political basket of issues that must attract the attention of the political contenders. This is especially so in the wake of the Covid_19 Pandemic which has exposed sharply the vulnerabilities of the Ghanaian economy, just like other economies depending on raw materials exports, with limited diversification. The pandemic has, once again, highlighted the enduring features of the Ghanaian economy: weak productive capacities, less value capture domestically, low-quality jobs, foreign capital dominance and integration into the global economy as raw materialsdependent country. Again, pressing is the range of the promises to offer stimulus packages to businesses--small and medium enterprises-- as well as promises to provide some free essential services like education, health etc. These are captured in the manifestos of the political parties. - Special economic zones, trends and role in economic development Special economic zones are

delineated geographical areas by governments to facilitate industrial activity through fiscal (taxation and expenditure) and regulatory incentives and infrastructure support like roads, water, electricity, communication facility, etc. to those areas. In Ghana, the number of firms operating as free zones companies has been rising. It was only 8 in 1997 but by 2013, the number of registered companies had grown to two hundred and forty (240) and then to three hundred and fifty-two (352) by 2015 according to figures from the Ghana Free Zones Board . Globally, there are nearly five thousand four hundred (5,400) free zones across one hundred and forty-seven (147) economies today, up from about four thousand (4,000) five years ago. But there are a lot more in the pipeline . This means SEZ is becoming an important feature in many economies. In terms of the policy logic, it is Foreign Direct Investment (FDI) driven. That is, the host state provides incentives and the support infrastructure with the expectations that benefits in terms of employment, revenue, technological transfer etc. will compensate for the incentives offered. These economic zones can make important contributions to economic growth. However, they are much more meaningful where there is a strong domestic private sector which the foreign investments complement . In that sense the domestic firms can

dictate the pace and direction to create meaningful jobs and boost exports â&#x20AC;&#x201C; both directly and indirectly where they succeed in building linkages with the broader economy. The zones can also support domestic and regional value chain participation, industrial upgrade and diversification. However, SEZs are neither a precondition nor a guarantee for development. Where they contribute to raise the level of economic growth, the stimulus tends to be temporary . After the build-up period, most zones grow at the same rate as the national economy. And too many zones operate as enclaves with limited impact beyond their confines and become a drain on the national purse because of the special incentives offered them. - Ghanaâ&#x20AC;&#x2122;s generous incentives to SEZs Ghana, in the quest to attract foreign capital, created and designed free zone enclaves/ special economic zones and offered juicy investment incentives as baits. These are underpinned by the expectation of the benefits of FDI though evidence of FDI-led development remains patchy. The country went ahead to create the Ghana Free Zone Board to oversee the regulation of these zones since 1995. Fiscal incentives, which are grounded in laws and treaties (trade, tax, investment etc.), have been a feature of Ghanaâ&#x20AC;&#x2122;s

quest for FDI. For instance, free zone enterprises in Ghana are exempted 100 percent from payment of direct and indirect taxes and duties on all imports for production and exports from free zones. Also, the companies enjoy hundred (100) percent exemption from payment of income tax on profits for up to 10 years from the date of commencement of operation. They have relief from double taxation for foreign investors and foreign employees. Shareholders are exempted from the payment of withholding taxes on dividends arising from free zone investments. Again, within the free zones, both foreign and domestic investors have equal rights to take and hold a maximum of 100 percent of shares in any free zone enterprise. No restrictions on total foreign or local ownership of free zone enclaves and enterprises and there are minimal customs formalities. Furthermore, the laws also shield these enterprises from nationalization and expropriation. There are no conditions or restrictions on repatriation of dividends or net profit, payment for foreign loan services, payment of fees and charges, for technology transfer agreement and remittance of proceeds from sale of any interest in a free zone investment. Free Zone investors are permitted to operate foreign accounts with banks in Ghana.

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CONTINUED FROM PAGE 17 Admittedly, tax and broader fiscal incentives are instrumental in reducing the cost of investment and raising output of beneficiary firms and could contribute to economic growth. However, the economic development impact of such fiscal incentives hinges on other factors such as industrial, trade, finance and technology policies by the host state. - What can Ghana show for the incentives offered over the years? Ghana, after operating the free zone model, over almost three decades, cannot be said to be fully achieving or benefiting from the purpose for which the Special Economic Zones were established. A number of challenges have emerged and demand immediate attention following research conducted on the operations of the Free Zone companies . They relate to employment, working conditions and revenue issues, capacity of state, technology transfer issues and abuses by the companies and the contextualization of the SEZ logic to development. Using the employment indicator, Free Zone companies altogether employed a total of twenty-seven thousand two hundred and thirty-five (27,235) workers as of December 2018. This, in terms of formal employment, it is about 0.02 percent. This means that in spite of the many incentives and the cost to the country for providing generous incentives to the Free Zone companies, they are not contributing sufficiently to the objective of creating employment. Additionally, the few jobs that have been created have often been described as lowquality jobs. Also, there have been reports about abuses of the country’s generosity. They relate to relocation of companies to neighbouring countries after establishing their businesses at the expense of Ghana’s taxpayer’s money. Others are liquidation after the 10 years tax holiday and coming back in a different form and new business name, poor linkage to the rest of the economy, and low quality of employment conditions. Again, the whole country has been declared a Special Economic Zone but the capacity of state cadres to monitor effectively is lacking. This results in ineffective monitoring of imports of raw materials, capital goods, equipment and machinery, and

vehicles by Free Zone companies. This is partly due to the inadequate customs resident officers at these companies leading to ineffective monitoring of production and sales volumes. Challenges in escorting imports from harbours to their factories i.e. tracking devices not adequate and effective thereby aiding diversion of imported raw materials into the domestic market. These result in revenue loss to the state. In 2017 alone, tax exemptions granted by government amounted to US$475 million. And this was a year when government had promised to review the exemptions regime and to tighten the screws on tax exemptions. Government had planned to abolish the use of special import permit that allow companies in the free zones, for example, to import without paying the required custom duties. When fiscal incentives are loosely applied to firms, they can up end entrenching historic structures of dominant firms rather than transcend those historic structures of imbalances, to create and generate dynamic domestic ones. It can also be a form of extra surplus transfer to those who get it only because they are powerful enough to grab it. Thereby worsening the challenges of financial flows, both licit and illicit. Also, the conditions of the Ghanaian worker in the zones demand attention by the political contenders. Though there are sterling examples of companies in the zones that allow unionization, others do not allow unionization and collective bargaining. There are also irregular in the payment of Pay As You Earn (PAYE) and Social Security and National Insurance Trust (SSNIT) for their employees. The above goes against Section 24 (3) of Ghana’s Constitution which provides that “every worker has a right to form or join

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a trade union of his choice for the promotion of his economic and social interests”. In addition, Section 70 (1) of the Labour Act (Act 651) also guarantees workers the right to form or join trade unions. A 2012 Annual Survey of Violations of Trade Union Rights conducted by the International Trade Union Confederation (ITUC) indicated the persistent violations in EPZ as one core issue of its survey in Ghana. The above challenges and abuses corroborate the 2019 World Investment Report, produced by the United Nations Conference on Trade and Development (UNCTAD), which shows that the performance of many zones remains below expectations. - Looking forward to rebuilding the Ghanaian economy in the wake of Covid-19 Pandemic In the wake of the above and in the drive to rebuild the Ghanaian economy post-Covid Pandemic, three main solutions are proffered. First of all, the model of the SEZ, as a model for economic development, needs to go hand in hand with a clear industrial path with tighter and appropriate trade, finance, investment and technology policies. Policies that prioritise the creation and nurturing of domestic firms even as foreign firms complement their efforts. This will ensure that FDI operations interact meaningfully with the rest of the Ghanaian economy by ensuring backward and forward linkages in the wider economy. Secondly, it is long overdue to review the incentives regime offered to Free Zone enterprises and link them to clear measurable indicators such as employment, technology transfer, market to local producers. All over the world countries are rebooting their economies and seeking to capacitate the locals to take a commanding role in the economy. Last, but not the least, powers

of the state to ensure that workers are treated properly, fairly and their economic rights enhanced within the Free Zones should be exercised. This will give a clear signal to companies operating there that the Ghanaian workers’ rights are as inalienable as those of workers anywhere in the world. Commissioned by Public Services International (PSI ) and co-authored by Daniel Oberko daniel.oberko@worldpsi.org) and Sylvester Bagooro ( vester2004@yahoo.com) i. This was taken from Research findings on tackling tax incentives commissioned by Public Services International and supported by FES. ii. World Investment Report by United Nations Conference on Trade and Development (UNCTAD), 2019 iii. Strengthening linkages between domestic and foreign direct investment in Africa Note by the UNCTAD secretariat for the Trade and Development Board meeting in June 2013 iv. World Investment Report by UNCTAD, 2019. credit: Study by PSI on tackling tax incentives in Ghana, presentations at workshops on tax incentives in Ghana organised by PSI and supported by FES. v. Research commissioned by Public Services International (PSI) and supported by FES on tackling tax incentives in Ghana vi. PSI Affiliates in Ghana are Local Government Workers’ Union of Ghana (LGWU); Health Services Workers’ Un-ion of TUC (HSWU); Public Services Workers’ Union of TUC (PSWU); Public Utility Workers’ Union of TUC (PUWU); Teachers & Educational Workers’ Union (TEWU); Ghana Registered Nurses’ Association (GRNA); Civil and Local Government Staff Association of Ghana (CLOGSAG); Federation of Universities Senior Staff Associations of Ghana (FUSSAG) and the Union of Industry, Commerce and Finance Workers (UNICOF)

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