Business24 Newspaper 20th November, 2020 by Business24 Online

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FRIDAY NOVEMBER 20, 2020

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FRIDAY NOVEMBER 20, 2020

Education budget could get US$1bn boost with 5ppts increase in tax-toGDP ratio

Gov’t to extend new housing finance scheme to other regions By Joshua Worlasi Amlanu macjosh1922@gmail.com

ollowing the successful piloting of government’s new National Mortgage and Housing Finance Initiative over the past two years, the next major move is to extend the initiative to other regions of the country, the Cont’d on page 3

Gov’t sets 70% private financing target under Ghana CARES By Joshua Worlasi Amlanu macjosh1922@gmail.com

Ken-Ofori-Atta, Minister of Finance

By Benson AFFUL affulbenson@gmail.com

overnment could increase the education budget by US$1.5bn if it increases the tax-to-GDP ratio by 5 percentage points in the medium term, international

civil society organisation ActionAid has said in a new report. ActionAid estimated that a 5-percentage-point increase in the tax-to-GDP ratio would lead to about US$7.8bn in additional revenue by 2023, and if the government allocated just 20

ECONOMIC INDICATORS EXCHANGE RATE (INT. RATE)

percent of this extra revenue to education, as international benchmarks require, this could increase the sector’s budget by US$1.5bn, nearly 60 percent of the 2019 education budget. 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

he Finance Minister, Ken Ofori Atta, says government is seeking to raise at least 70 percent out of the GH¢100 billion needed to fully implement the Ghana COVID-19 Alleviation and Revitalization of Enterprise Support initiative.

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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Editorial / News

FRIDAY NOVEMBER 20, 2020

Editorial

Housing is crucial

hile there are no readily available reliable statistics on the Ghana’s housing deficit, conservative estimates put the figure above 1.5 million housing units. It is imperative to note that the housing deficit does not necessarily mean that there is a shortage of actual housing units. While it has something to with the supply side, the cumbersome means of home ownership generally expressed in costly financing does not make things better. Mortgage financing is perhaps the most popular way of home ownership in many parts of the world. In Ghana, the mortgage market while still growing faces a number of challenges that make it unattractive.

Generally, due to their longterm nature, people seeking mortgage prefer a lower yield financing. But the relatively high interest rate in Ghana make this nearly impossible with people rather preferring to explore other painstaking alternatives to home ownership. Indeed, many believe that unless there is a strategic government policy to making mortgage a mainstay, the status quo would reign for a long time. It was not surprising seeing government begin to take active role to encourage home ownership with the introduction of the National Mortgage and Housing Finance Initiative two years ago. After being piloted for the last two years, government has declared its interest of scaling

up the initiative to other regions which is a very laudable thing to do. The National Housing and Mortgage Fund (NHMF) was set up under the initiative to pilot two schemes—the National Mortgage Scheme (NMS) and the Affordable Housing REITs (rentto-own) scheme. The mortgage scheme works with participating banks—GCB Bank, Stanbic and Republic Bank—to provide mortgages at reduced rates of 10-12 percent compared with the market average rate of 28 percent. This paper supports that plan to expand the housing financing scheme to other regions to afford everyone an opportunity to own decent houses which are gentle on the pocket.

Education budget could get US$1bn boost with 5ppts increase in tax-to-GDP ratio Continued from cover

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“Ghana requires new public funds to meet the sustained costs required to meet SDG4 over the long term. Yet, in a time of increasing fiscal pressures on the budget, this will become ever more difficult. This means raising new revenues has become increasingly important,” the report said. According to ActionAid, Ghana relies on tax revenue as a key source of domestic revenue, but is not currently collecting as much revenue as it could. “It is increasingly important for Ghana to increase taxes, given that debt servicing is sucking away precious revenues,” it said. The report said over the period 2007 to 2017, the country did too little to improve its tax-toGDP ratio. It however added that the country reduced reliance on indirect taxes versus direct taxes during the same period, suggesting that the tax system has become increasingly progressive.

It said government spending on education has been shown to be progressive due to a high share of public spending on pre-primary, primary, and junior high school education. It said in 2013, for instance,

Ghana spent 7 percent of its education budget on pre-primary education, which has been shown to have an equalising impact—as pre-primary schooling has been shown to support the poorest to learn better throughout their life.

FRIDAY NOVEMBER 20, 2020

Gov’t to extend new housing finance scheme to other regions Continued from cover co-coordinator of the National Housing and Mortgage Fund, Dela Zumanu, has said. In an interview with Business24, Mr. Zumanu said the pilot phase, which has been completed, is being reviewed for lessons learnt in order to inform government on the scalability of the project. “Going forward, we will be going to the regions. The result of the pilot in Accra looks promising. So the idea is to go into other regions and replicate what has been done in Accra in those other regions.” Government launched the National Mortgage and Housing Finance Initiative in 2018 to fix the challenges of home ownership and stimulate the local currency mortgage market. The National Housing and Mortgage Fund (NHMF) was set up under the initiative to pilot two schemes—the National Mortgage Scheme (NMS) and the Affordable Housing REITs (rentto-own) scheme.

The mortgage scheme works with participating banks—GCB Bank, Stanbic and Republic Bank— to provide mortgages at reduced rates of 10-12 percent compared with the market average rate of 28 percent. The Affordable Housing REITs scheme, on the other hand, promotes the rent-to-own scheme, whereby renters of

affordable houses supported by the scheme have the option, after a period, to acquire the rented properties. In October, the government inaugurated 204 housing units located in the Ashaiman municipality, which were constructed under the scheme and will be offered to public sector workers.

Other privately-developed housing units, including 60 apartment houses at Tema Community 25 and 50 apartment houses at Tema Community 26, are being offered to workers under the rent-to-own scheme. Mr. Zumanu indicated that as the initiative expands, more banks are expected to sign up as participating institutions.

Gov’t sets 70% private financing target under Ghana CARES Continued from cover “We have already signaled that 70 percent of the financing will be sought from the private sector and government will do its utmost to create a more conducive environment for them to invest, create jobs and

thrive,” Mr. Ofori-Atta said at the launch of the initiative. To fully implement this programme, he emphasised that government will need the full engagement of private sector partners, both on the international and domestic market.

He explained that the Ghana CARES “Obaatan Pa” programme provides a mechanism to consolidate private sector investment into productive sectors of the economy to create a dynamic regional economy for Ghana. “We will provide the support

to build back boldly but smartly, paying greater attention to inclusive growth especially in the areas of health, agriculture, industrial processing and service delivery,” he said. The Minister noted that government’s comprehensive approach under this programme is focused on saving lives, as well as protecting the poor and vulnerable, whilst ensuring business rebuilding and growth in sustainable ways. “So, we look forward to establishing a dynamic national enterprise culture of an open economy with flexibility of labour, capital and product markets. An economy characterised by efficiency, social justice, social mobility and prosperity for all; the preferred destination for business and commerce on our beautiful continent with a common African Continental Free Trade Area market and population of 1.2 billion and a GDP of US$2.5 trillion,” Mr. Ofori-Atta said.

FRIDAY NOVEMBER 20, 2020

Housing Fair

Day 1

Day 2

Thank you for featuring in the First National Bank virtual housing fair this year. We are glad to have you as partners in providing opportunities for Ghanaians to own their dream homes. To watch a recap of the First National Bank Housing Fair, kindly scan the QR code above for day 1 and 2. Featured Developers :

Integral Associates

0242435050 | 0800770522 YouTube: FirstNationalBankGH First National Bank Ghana Limited. Reg No CS350172014. A subsidiary of FirstRand Limited, South Africa.

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News

FRIDAY NOVEMBER 20, 2020

Gov’t releases funds for customers of revoked fund managers – SEC By Joshua Worlasi Amlanu macjosh1922@gmail.com

overnment has authorised a partial bailout for customers of fund management companies that had their licences revoked last year, the Securities and Exchange Commission (SEC) has said. In a statement, the regulator noted that this will involve a partial payment of up to GHc 50,000 to all customers of the remaining affected Fund Management Companies. The action by SEC follows deliberations with government regarding an agreed social and humanitarian intervention for all remaining customers of the failed fund managers. “The decision to make this partial payment is predicated on the government’s commitment to protecting its citizenry and its sensitivity to the plight of affected clients compounded by the disruptive impact of the Covid-19 pandemic,” the regulator said. It further indicated that, this intervention has become necessary at this stage because liquidation petitions for the remaining affected Fund

Rev Ogbarmey Tetteh, SEC Director-General

Management Companies are currently at different stages. In addition, the regulator noted that some affected Fund Management Companies like Gold Coast Fund Management Limited (now Blackshield Fund Management Company Limited) are contesting the liquidation petition and as a result, have filed a Stay of Proceedings until its application for judicial review of the decision of the Administrative Hearings Committee has been heard. “There is the possibility for these legal processes to take some time and, therefore, extend the pain and suffering of the affected investors hence this decision by the government,” it stated.

The partial bailout is expected to cover all clients of the failed Fund Management Companies whose licenses were revoked but are yet to come under official liquidation including customers of Blackshield Fund Management Company Limited. This partial bailout would cover a total of 92,460 claims filed against the remaining 27 Fund Management Companies, out of which Blackshield Fund Management Company Limited accounts for a total of 84,656, representing 92 percent of the claims. Claims filed by individuals (including pensioners) is 86,506 with Gold Coast Fund Management Limited (now

Blackshield Fund Management Company Limited) accounting for 80,018 (92.5 percent) of these claims. Based on the validated claims, the partial bailout being offered would result in 89 percent and 82 percent of affected individuals and pensioners being fully settled respectively. “Validated claims in excess of this partial payout amount shall be covered after the liquidation proceedings in Court, in line with the terms being applied under the bailout package for the clients of the Fund Management Companies currently under official liquidation,” the Regulator said. The partial bailout shall be channeled through the Amalgamated Fund Ghana Limited, the same Special Purpose Vehicle (SPV) being used to pay the clients of the Fund Management Companies currently under official liquidation. Amalgamated Fund Ghana Limited is managed by GCB Capital Limited, a subsidiary of GCB Bank Limited. The SEC’s agent for receiving and validating claims is PwC.

African ICT students shine at the Huawei ICT competition global final

frican ICT students emerged among the world’s best at the Huawei ICT Competition Global finals, taking top prizes at an awards ceremony held this weekend. Two teams from Nigeria won grand prizes, while teams from Kenya, Uganda, Tanzania, and Mauritius all earned the highest level of achievement for the first time in what is seen as one of the biggest ICT events globally. Despite being the newest contestants of Huawei ICT Competition since 2017, African students have made stunning progress this year. In 2019, only five African teams made it to the global final and reaped only one third prize, compared with 13 teams this year, winning a total of seven medals. Hamza Atabor Adenoi, a Nigerian student from Ahmadu Bello University who won the grand prize, shared his experience with Huawei and the competition, while speaking on behalf of triumphant teams.

“This journey with Huawei came with benefits such as professional certification in the fields of interest,” he said. “Huawei gave students the opportunity to learn skills which are recognized in the world of ICT. Huawei provided us with a platform to experience and practice on new, innovative and cutting-edge technology to grow and develop ourselves.” The students’ achievement is due to African countries’ continued recognition and efforts to build a competitive ICT talent pool among the young generation, who will be an indispensable accelerator for the continent’s post-COVID recovery and digitization. Due to the COVID-19 pandemic, all the training and competition activities were completed online. The victorious students had a good reason to rejoice after over 10 months of hard work and fierce competition all the way from national screening contests, the regional final, and the global final. Speaking on behalf of the

President of the Federal Republic of Nigeria, Muhammadu Buhari, the Special Assistant on Youth & Students Affairs, Mr. Nasir Saidu Adhama, said “I congratulate the Nigerian students for coming this far in this Global ICT Competition. I also thank Huawei for supporting our Nigerian students and hope Huawei will continue to partner with the country in developing our ICT capabilities.” Over the past five years, Huawei has signed cooperation agreements with over 250 universities in 14 Sub-Saharan countries on establishing Huawei

ICT academies. This cooperation has enabled more than 7,000 university students to obtain Huawei ICT certification, which makes them better candidates for ICT-related jobs. This year’s Huawei ICT Competition attracted nearly 150,000 students from over 2,000 universities in over 82 countries. 327 students from 39 countries participated in the online global final, making the scale the largest in all years. Teams from Zambia, Lesotho, and South Africa also reached the global final.

FRIDAY NOVEMBER 20, 2020

News

FRIDAY NOVEMBER 20, 2020

Academic City, Yensesa to deploy real time climate data collection technology

cademic City University College, a premium STEAM tertiary institution has signed a Memorandum of Understanding with Yensesa Company Limited, a leading weather company in Ghana to produce and deploy an innovative technology to measure and collect real time temperature, pressure and humidity data. The MoU signed by Mr. Pawan Varyani, Director Strategy at Academic City and Mr. Blaise B. Bayuo, CEO of Yensesa Company Limited, seeks to empower students to become local climate leaders. This partnership signifies the two institutions commitment to push the boundaries on innovation and prototype technology development among students. Over the years, timely and reliable weather data has become very important for vulnerable communities in helping them plan and mitigate adverse weather conditions such as drought, floods and storms in both the short and long term. The project, dubbed ‘Kanda Weather Balloons’ is a Telos

blockchain solution that will allow local communities to launch weather balloons to gather real time weather data for dissemination and get paid as well. The project will significantly contribute to building an entirely community-owned network. With this MoU, Academic City will become the first weather station to pilot this project and offer students the opportunity to learn and teach other local communities about running their weather stations. Speaking on the partnership,

Mr. Bayuo, CEO of Yensesa Company Limited was optimistic that the project will significantly contribute to resolving uncertainties among vulnerable communities with regard to daily weather conditions. “We are happy to partner Academic City on this project. Bringing together Yensesa’s and Academic City’s expertise and talents will help leverage this project to achieve its intended purpose”, he said. Mr. Varyani remarked “We are excited to offer our students

the opportunity to work on practical issues we face today as a society. Industrial experience is very important to students, both academically and in terms of setting them apart in the job market” “The importance of historical and real-time data, especially when aggregated with artificial intelligence, has the ability to predict or provide direction on future outcomes. This when applied to mother nature, can really have an impact,” he said. Academic City is a fast developing premium STEAM and Entrepreneurial tertiary institution set to define modern tertiary education in Ghana and throughout the African continent. The university’s elite undergraduate degree programmes in Engineering, Information Technology, Business Administration and Communication Arts are carefully. These programmes are strategically designed taking into consideration world class STEAM education to develop students to become more practical, hands-on and productive.

NBSSI signs MoU with four organisations to boost business growth

he National Board for Small Scale Industries (NBSSI) has signed a memorandum of understanding with four strategic organizations to help accelerate the growth of Ghanaian-owned micro, small and medium scale enterprises (MSMEs). The MoU signed between NBSSI and Intelligent Capital, a private start-up development consortium; Ghana Tech Lab, a digital solutions provider; She Hub, a women-focused entrepreneurship centre; and the Association of Ghana Industries (AGI), which provides networking support to businesses. The agreement under the GH₵70 million NBSSI Mastercard Foundation Young Africa Works initiative is to enable the respective organisations to bring their expertise to bear in improving the business and entrepreneurial skills of the women and the youth in the MSMEs sector. The NBSSI Mastercard Foundation Young Africa Works initiative aims to create 39,000 jobs within two years through effective collaboration with partners across the country. Commenting on the

partnership, the Executive Director of NBSSI, Kosi YankeyAyeh said the goal of the deal was to ensure the building of longterm sustainable businesses. She said a key factor in the Mastercard Foundation involving the partners in the design of the project was to ensure sustainability, enhance capacity building and scaling up of the work in the future. “I can say that within the first year, we have hit the target of majority of interventions. The goal now is to sustain and move it to the next level,” she said. Ms Kosi Yankey-Ayeh said the programme was seeking to enhance the capacity of MSMEs in three areas of focus Innovation, Creativity and Entrepreneurship, Apprenticeship to Entrepreneurship and MSME Business Acceleration. She said all these were targeted at ensuring the creation of dignified and fulfilling jobs. She said under the Young Africa Works project NBSSI envisaged that partnerships would help make the work easier and also achieve the overall goal. Ms Yankey-Ayeh urged the

partners to commit to the timelines in the delivery of the work to ensure that the goal of the project to enhance women and youth businesses were attained. Ms Barbara Ghansah, National Project Coordinator NBSSI Young Africa Works, said the MoU signified the effective collaboration between the public and private sectors to deliver on entrepreneurship development to drive the growth of the economy. Chief Executive officer of AGI, Seth Twum-Akwaboah, said the Association would bring to bear its expertise in business development to support the NBSSI to deliver on the goal of job creation and capacity building.

He said ensuring the growth of Ghanaian businesses was important to enable them to take advantage of the African Continental Free Trade Area (AfCFTA) agreement. He urged MSMEs to enhance their capacity to become efficient and competitive to benefit from the AfCFTA. Erica Adutwumwaa Kyere, Executive Director of She Hub, said the partnership with NBSSI provided an opportunity to reach out to more women to achieve the target of 70 per cent of women under the Young Africa Works initiative. GNA

FRIDAY NOVEMBER 20, 2020

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FRIDAY NOVEMBER 20, 2020

United States supports Ghanaian Women entrepreneurs

arking Global Entrepreneurship Week, U.S. Ambassador to Ghana Stephanie S. Sullivan delivered remarks on November 17, 2020 at the graduation ceremony of the U.S. Department of State’s Academy for Women Entrepreneurs (AWE) second cohort. Hosted by the Embassy’s implementing partner, the event took place at the Young African Leaders Initiative (YALI) Regional Leadership Center located in the Ghana Institute of Management and Public Administration. AWE follows the DreamBuilder course developed by the Thunderbird School of Global Management in Arizona. This online program provides flexibility to budding women entrepreneurs, who follow the course at their own pace, with supplemental sessions facilitated

U.S. Ambassador to Ghana Stephanie S. Sullivan with Dr. Shola Safo-Duodu YALI RLC Director (2nd from right), staff of U.S. Embassy and AWE training facilitators.

by experienced women entrepreneurs and subject matter experts in finance, marketing, and logistics. AWE provides online education resources, fosters networks that support access to mentorships, and connects women through existing U.S. government exchange programs. Participants from the second AWE cohort included entrepreneurs from the

agricultural, food and beverage, cosmetics, personal care, and textile sectors. During the ceremony, Ambassador Sullivan applauded the 48 cohort members and encouraged them to remain resilient and determined saying, “All of us here today know how much women business owners, both in the informal and formal sectors, contribute to and drive

Ghana’s economic prosperity. In addition to boosting economic growth, investing in women produces a multiplier effect because women reinvest a large portion of their income in their families and communities.” AWE is a part of the U.S. Women’s Global Development and Prosperity Initiative, a wholeof-government effort to advance global women’s economic empowerment, established in February 2019. Since the program’s inception, 78 Ghanaian female entrepreneurs have completed the AWE program. AWE was a pilot program in 2019 in 26 countries, including 10 in Africa: Ghana, Kenya, Nigeria, Rwanda, Senegal, South Africa, Tanzania, Uganda, Zambia, and Zimbabwe. Since then, the program has expanded to over 50 countries and has trained over 7,000 women. For more information about the State Department’s AWE program, please visit www. eca.state.gov/awe.

Covid to leave lasting scars on emerging market credit quality in 2021 -- Moody’s By Benson AFFUL affulbenson@gmail.com

espite a tentative recovery from the coronavirus pandemic, emerging market (EM) credit conditions will remain fragile and vulnerable to setbacks in 2021, Moody’s Investors Service says in its 2021 EM Outlook report. The report cited obstacles ranging from COVID-19 containment fears to limited room for stimulus will threaten the recovery. “While Moody’s expects a growth bounce in 2021, obstacles ranging from persistent COVID-19 containment fears to limited room for stimulus will pose a threat to the recovery,” Moody’s said. The international ratings agency said the key focus in 2021 will be stabilising budget deficits and debt levels, adding that how governments manage the balance between policy support and fiscal credibility will be an important credit differentiator. “Companies across retail, transportation and automotive related sectors will take several years to recapture pre-crisis sales levels amid sluggish demand Furthermore, the impact of deteriorating asset quality on EM

banking systems and structured transactions will come to the fore in 2021, particularly as credit forbearance and fiscal support for households and small businesses starts to taper,” Moody’s said in the report. For EM sovereigns, the key focus in 2021 will be stabilizing budget deficits and debt levels. A key credit differentiator will be how governments manage the balance between policy support and fiscal credibility. Financial conditions will remain broadly supportive for most major EMs thanks to ultra-loose monetary policy globally. It said the impact of deteriorating asset quality on EM banking systems and structured transactions will come to the fore in 2021. Digital transformation On digital transformation, Moody’s said governments and companies will focus on enhancing resilience to future lockdowns and economic disruptions by investing in the digital economy. Incumbent banks and new entrants will benefit from deepening technology-driven financial inclusion across lowincome EMs, but cyber risks will rise in tandem.

Ghana’s business community saddened by death of former President Jerry John Rawlings

he leadership of the Ghana National Chamber of Commerce & Industry (GNCCI) has learned with deep sorrow the death of the first President of the Fourth Republic of Ghana, His Excellency Jerry John Rawlings, on November 12, 2020, at the Korle-Bu Teaching Hospital in Accra. Former President Jerry Rawlings devoted most of his life fighting corruption and teaching the ethos of transparency, probity and accountability which are crucial for the private sector to thrive and for Ghana to continue on the path of development. His role in the transition

process from military regime to democratic system of governance made Ghana once again the envy of many and the pride of Africa As the champion of Ghana’s now democratic governance and liberal economic model which has increasingly placed the business community at the heart of equitable distribution of wealth, captains of industry are profoundly saddened by his sudden death. The GNCCI on behalf of the Private sector extends its heartfelt condolences to the former first Lady Nana Konadu Agyeman Rawlings, children and family at this difficult time.

FRIDAY NOVEMBER 20, 2020

Feature

FRIDAY NOVEMBER 20, 2020

America should rewrite the China trade contract By Arvind Subramanian

nce US President-elect Joe Biden’s administration has made the relatively easy decisions to rejoin the Paris climate agreement, remain in the World Health Organization, and attempt to reboot the World Trade Organization, it will confront three key foreign-policy issues. In order of importance, they are China, China, and China. Biden’s dilemma is that China has become too deviant to cooperate with fully, too big to contain or ignore, and too connected to decouple from. So, what principles should govern America’s economic engagement with it? Two decades ago, the United States and the rest of the world bet that China, as it became richer, would open up economically and politically, while remaining benign in its international conduct. Under the resulting implicit contract, embodied in China’s 2001 WTO accession agreement, the world promised to guarantee market access for Chinese exports; in return, China would make its economy more open and transparent, and play by international rules. But China has changed since then, and not only by becoming much richer and a much larger trader. Under President Xi Jinping, an authoritarian in the mold of Mao Zedong, China has repudiated Deng Xiaoping’s three guiding tenets: collective leadership in domestic politics, steady economic opening and reliance on market forces, and quiet cooperation with the world. Instead, Xi’s repressive regime is fashioning a new brand of inward-oriented, state-dominated capitalism. And it poses a threat to many of its neighbors, including Taiwan, Australia, India, the Philippines, Vietnam, and Japan. In other words, the world has lost its China wager. Even where China has adhered to the letter of the contract – concerning currency and intellectualproperty, for example – it has violated the spirit. The Biden administration and the rest of the world are thus entitled to renegotiate the deal. America and others have no right to obstruct China’s economic rise, because its 1.4 billion citizens are entitled to pursue prosperity and security. Likewise, China is entitled to choose its development model, with its own balance between the state and the market.

Subject to these caveats, however, America can – and should – revise the decades-old contract to account for changed realities. The more China plays by the rules, the more such a revision would benefit developing countries that can trade with it. For starters, China is no longer a poor country, but its status as a developing country entitles it to favorable treatment under global trade rules. This status must be revoked. Second, China departed from the spirit of the original contract through beggar-thyneighbor exchange-rate policies (especially from 2004 to 2010) that artificially preserved its economic competitiveness. That problem went away for a while, but is beginning to resurface. The world must respond by codifying and enforcing rules on exchange-rate manipulation. And where the line between state and commercial entities is blurred – as it is in China – the definition of “excessive” intervention should be widened to include foreignexchange purchases by stateowned banks as well as those by the central bank.2 Third, the 2001 WTO accession agreement imposed obligations on China concerning its stateowned enterprises (SOEs). But, with the Chinese state playing a much larger direct and indirect economic role under Xi, these rules have to be adapted, tightened, and made more justiciable. Regarding Chinese investment abroad, for example, the world should treat skeptically China’s claim that the government is distinct from SOEs because the latter are run on commercial principles. The burden of proof should be on China to prove this. As for inward foreign investment, the basic aim should be to ensure a far more level playing field. The new rules should therefore cover not only explicit state policies but also the actions of SOEs, as well as more of China’s government procurement policies and practices.

But Biden must first persuade China to agree to renegotiate the contract. Immediately removing all of President Donald Trump’s unilateral tariffs on Chinese imports could help. The Biden administration could also lend quick support to the WTO, by approving the choice of the body’s new director-general and restoring its Appellate Body. And the US could signal its willingness to join China-led international financial institutions such as the Asian Infrastructure Investment Bank, and to end the West’s monopoly of the leadership of the World Bank and International Monetary Fund. Beyond improving the atmospherics, Biden must consider his tactical options: unilateral, multilateral, and regional. In theory, he could go even further down the unilateral road than Trump by threatening China with a return to the preWTO arrangement under which its market access would be reviewed annually by a fickle, more protectionist Congress. But, as Chad Bown of the Peterson Institute for International Economics has demonstrated, even the more limited Trump strategy has failed, because the world has become too dependent on China to embrace restrictive trade actions against it. Moreover, success would be enormously costly: the global trading system’s integrity would be decimated, wrecking a halfcentury of international efforts. Biden also has the multilateral option of renegotiating with China as part of an effort to revive the WTO, which has been languishing largely because of Trump’s hostility to it. The problem is that China – as a WTO member with significant clout – would have to agree to any changes. The Biden administration must therefore consider the regional route that Trump abandoned when he withdrew the US from the Trans-Pacific Partnership (TPP) in 2017. Rejoining its successor, the Comprehensive and Progressive

Agreement for Trans-Pacific Partnership (CPTPP), would enable the US to integrate more deeply with the rest of Asia and possibly also with Europe, thereby reducing its dependence on China while inflicting de facto exclusion costs on it. This strategy has major advantages. It would create a trading area that would complement, rather than undermine, the international trading system. And such a move would not be subject to a Chinese veto; in fact, it would likely force China to the negotiating table, because it would not want to be kept out of such a large market. But joining the CPTPP would not be painless: it would require the US to countenance more trade opening, which the current domestic mood might not allow. The recent signing of the Regional Comprehensive Economic Partnership, a panAsian free-trade agreement including China, might seem to signal a different approach than that proposed here. But Asian countries have fewer options relative to China: They are more dependent on and integrated with it, and Trump’s 2017 rejection of the TPP left them without an anchor for managing economic relations with China. After Trump, and considering China’s increasing assertiveness, Asian countries might go along with or even secretly hope the US and Europe reset relations with China. In any event, Biden should have no illusions: China is too important to ignore, but the challenge it presents defies easy solutions. America and the world should brace themselves for the long haul. About author Arvind Subramanian, a former chief economic adviser to the government of India, is Professor of Economics at Ashoka University. He is the author of Eclipse: Living in the Shadow of China’s Economic Dominance.

FRIDAY NOVEMBER 20, 2020

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FRIDAY NOVEMBER 20, 2020

MTN Ghana inducted into CIMG Hall of Fame … wins nine awards in one night

TN Ghana has been inducted into Chartered Institute of Marketing Ghana (CIMG) Hall of Fame after it was adjudged Telecom Company of the Year for the third consecutive time and Marketing Oriented Company of the Year. The awards were presented to MTN in acknowledgement of its execution excellence in marketing strategies and operations in the telecoms space. These strategies have contributed significantly to enhancing the image of the brand, providing exceptional customer experience and brightening the lives of people in the communities in which it operates. In addition to the CIMG awards, MTN Ghana further consolidated its leadership in the telecoms industry by winning seven other awards at the Ghana Information Technology and Telecom Awards (GITTA). MTN was adjudged the Social Impact Company of the year, Customer Experience

Company of the Decade, Digital Transformation Company of the Year, Mobile Money Company of the Decade and Telecom Company of the Decade. Chief Executive Officer of MTN Ghana, Mr. Selorm Adadevoh was recognised as the Industry Personality of the Year while General Manager for MobileMoney Limited, Mr.

Eli Hini won the Mobile Money Leadership Award. Commenting on the awards, the CEO of MTN Ghana, Selorm Adadevoh expressed his excitement about the recognition MTN received at both the CIMG and GITTA awards. He said, “For nearly 25 years of the company’s existence, we have delivered the

best value propositions to our customers. As we journey towards becoming a digital operator by 2023, the experience we provide the customer has been our main focus. We continue to research to develop solutions that meets and exceeds their expectations in the digital world. We thank our customers and stakeholders for their support which has culminated into the awards received”. Selorm also congratulated Eli Hini for his commitment and drive which has made MoMo the most preferred brand for all mobile financial transactions thereby creating more opportunities for the financially excluded to gain inclusion. MTN Ghana has over the years received many awards from various institutions in relation to its operations of telecoms services. MTN will continue to adopt innovative ways to ensure its customers enjoy reliable and excellent telecommunication services.

Banks urged to adapt to shifting customer expectations zero touch, zero paper, across post COVID-19 pandemic the board. They must continually

he Chief Executive Officer of FBNBank Ghana, Victor Yaw Asante, says banks must reshape their products and services by providing a consolidated offering to meet shifting customer expectations. He believes the shift in customer preferences will drive their demand for seamless banking transactions across different channels; instant payment on all transactions that are reliable and secure without any delay or interruptions; and digital payment products that are tailored to their needs and produces instant satisfaction for them. Speaking on the topic: The Future of Banking Post the Global Pandemic at the 2020 Virtual Digital Banking Summit, Mr. Asante highlighted the need for banks to embrace emerging technologies in the banking sector as that would drive changes in processes, products and service offerings and engagement with customers. According to him, the future of banking rests on three pillars: Customer Expectations, Emerging Technologies and Optimal Business Model.

Mr. Asante said banks need to focus on how to use data and insights to deliver a more customized, individual experience from content and insights, to the value proposition that a customer receives from their bank. Shedding light on emerging technologies, Mr. Asante stated that the fourth industrial revolution technologies will drive higher levels of customer experience and productivity in the banking industry. He said these technologies will combat data fragmentation and accelerate feedback loops to anticipate customer moments of need allowing banks to capture value quickly. He emphasized that “bringing these technologies together allows for dynamic optimization, delivering a tailored product to a customer in the exact moment of need through a channel likely to maximize attention.” He called on banks to operationalize business models that are adaptable to ensure that their institutions are nimble and can quickly respond to the rapid changes in the operating environment.

Victor Yaw Asante, FBNBank Ghana Managing Director

“In the post pandemic era, banks have an opportunity to challenge themselves and ask how they can achieve zero latency,

invest to deliver innovative digital capabilities that leverage technologies to innovate faster and provide tailored products to meet changing customer needs and habits.” At the same time, he tasked banks to reengineer their processes so as to contain cost and improve on efficiency while automating all their risk processes to ensure that risks are proactively mitigated in real-time.” The Digital Banking Summit is a C-Suite platform that creates a medium for discussions on global trends and disruption in Digital Banking, how market players can seize opportunities and respond to trends, while focusing on pertinent issues like FinTech disruption, Financial Inclusion, Block Chain and RegTech. This year’s Summit was under the theme, “Digitization of Banking Sector – En Route to a Cashless Africa” and it was organized by the International Centre for Strategic Alliances (ICSA). FBNBank Ghana and its parent, First Bank of Nigeria Limited were the official banking partners of the 2020 Virtual Digital Banking Summit.

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PS5 launch day delivery delays and row over who is to blame Launch day woes

ustomers who pre-ordered a PlayStation 5 from UK retailer Game may not receive it on launch day, partly because of huge demand - and also the size of the console. In an email to customers, Game blamed courier firm Yodel, which has strenuously denied it is at fault. People keen to get their hands on the console are also struggling to order with other online retailers. There are huge virtual queues on retailer Curry’s website. The PS5 is released in the UK on 19 November but lockdown has meant that people cannot purchase one in physical stores. The US launch took place last week. Currys PC World was forced to institute a virtual queuing system which grew to 150,000 long, while John Lewis and Game’s own site suffered slow loading times as they were inundated with hopeful shoppers. There were also issues with the Tesco and John Lewis websites. Those hoping to receive their consoles today are from pre-orders that took place in September. Many people who were not allocated a pre-order tried to buy a console when launch day stock went on sale at

09:00. Size matters People pre-ordering from one of the largest retailers, Game, may face disappointment if they were expecting to unbox their goods on launch day. In an email to customers, Game said: “Due to the volume of PlayStation 5s in the UK market and the size of the product, the launch has led to UK-wide delivery challenges for all retailers and couriers.” It goes on to say that it has had to use “multiple couriers” to get the consoles delivered on time but then singled out Yodel, saying the firm has “informed us that not all orders due to be delivered

by them will be delivered on release day”. Yodel issued a furious clarification about its role. “Yodel does not work directly with Game. Our client is GFS, a fulfilment business who work in partnership with Game,” it said in a statement. “We have been consistently clear on the order volumes we are able to carry for them and it is deeply disappointing that Yodel’s name has been incorrectly used in an email to customers on the status of orders.” It said there were “currently no delays within our network”. Game has since clarified that the “vast majority” of deliveries would be made on time, with the remainder coming a day later.

Nevertheless, the delays have led to customers venting frustration on Twitter - much of it targeted at Yodel. Some of those who had preordered from Game asked why they had paid an extra fee to have a Royal Mail delivery that has now been given to another courier firm. Others reported delays with orders from Amazon and other retailers. Piers Harding-Rolls, a gaming analyst with research firm Ampere said demand for both the PS5 and the new Xbox consoles had been very strong and would probably “come in waves as the product is restocked”. “Clearly it is disappointing for consumers that have preordered not to receive their console on launch day. The situation is exacerbated as there is no opportunity to buy on launch day at physical retail as in the past. “Whether you are impacted or not appears to come down to the retailer you pre-ordered with which indicates that this is a company-specific issue rather than a broader industry problem. The UK is not alone in this respect - some US retailers also had their challenges last week during the launches.”

Apple to pay $113m to settle iPhone ‘batterygate’

pple will pay $113m (£85m) to settle allegations that it slowed down older iPhones. Thirty-three US states claimed that Apple had done this to drive users into buying new devices. Millions of people were affected when the models of iPhone 6 and 7 and SE were slowed down in 2016 in a scandal that was dubbed batterygate. Apple declined to comment, however, it has previously said the phones were slowed to preserve ageing battery life. The deal is separate from a proposed settlement Apple reached in March to pay affected iPhone owners up to $500m in a class action lawsuit. In 2016 Apple updated software on models of the iPhone 6, 7 and SE - which throttled chip speeds on aging phones. Unusual slowdowns Apple acknowledged

its

update reduced power demands after researchers found unusual slowdowns in 2017. The states argued that Apple had acted deceptively and should have replaced batteries or disclosed the issue. According to an Arizona filing, millions of users were affected by power shutoffs. Apple denies that the slowdown was for financial gain. But Arizona Attorney General Mark Brnovich wrote in a court document made public on Wednesday: “Many consumers decided that the only way to get improved performance was to purchase a newer-model iPhone from Apple. “Apple, of course, fully understood such effects on sales.” Under the settlement, Apple did not admit to any wrongdoing or breaking any law. The tech titan also agreed for the next three years to provide

“truthful information” about iPhone power management across its website, software update notes and iPhone settings. The settlement comes after a series of other allegations against Apple.

It is currently locked in a legal battle with Epic Games - amid accusations the iPhone-maker uses its stranglehold over its App Store to unfairly charge developers.

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