Business24 Newspaper 14th December, 2020 by Business24 Online

THEBUSINESS24ONLINE.NET

MONDAY DECEMBER 14, 2020

NO. B24 / 139 | NEWS FOR BUSINESS LEADERS

Stock market returns surge after election

MONDAY DECEMBER 14, 2020

Multinational retailers to increase stocking of local products

Delese Mimi Darko, CEO, FDA

ultinational retail outlets in Ghana are keen to increase the volume of local products on sale in their various supermarkets to consolidate the gains of the Food and Drug Authority’s Progressive Licensing Scheme (PLS) certification initiative. Cont’d on page 3

Moody’s sees further loan quality decline among Ghanaian banks By Joshua Worlasi Amlanu

Mr. Ekow Afedzie, Managing Director, Ghana Stock Exchange (GSE)

By Joshua Worlasi Amlanu macjosh1922@gmail.com

rading on the Ghana Stock Exchange (GSE) surged following last Monday’s election, as investor confidence improved in reaction to the victory by the incumbent administration, which is seen as more probusiness.

Trading activity strengthened in value terms as 25.51m shares valued at GH¢60.5m changed hands last week—compared with 37.59m shares valued at GH¢23.2m the previous week. The GSE Composite Index (CI), the market’s benchmark index, advanced by 34.1 points to close the week ending Friday, December 11 at

ECONOMIC INDICATORS EXCHANGE RATE (INT. RATE)

1,854.32. This amounted to a weekly return of 1.87 percent on the index. Prior to the elections, the index had recorded a year-todate return of -19.36 percent as at December 4. However, with last week’s performance, the index cut its year-to-date losses to -17.85 percent.

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

redit rating agency Moody’s Investors Service is projecting a reversal of the improving trend in Ghanaian banks’ financial metrics, with loan quality to be hit hardest, resulting from the impact of the coronavirus-induced economic disruption.

Cont’d on page 2

Cont’d on page 3

INTERNATIONAL MARKET USD$1 =GHC 5.7027

macjosh1922@gmail.com

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

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Editorial / News

MONDAY DECEMBER 14, 2020

Editorial

Big boost for Made-in-Ghana!

espite a boom in the business of retail of consumer goods, Ghanaian businesses struggle to participate. Most small-medium scale enterprises have found the process and associated costs to get their products certified by the Food and Drugs Authority (FDA) highly prohibitive. This has stifled the growth of these SMEs as they are unable to expand their businesses. The FDA seeing this bottleneck-without relaxing on its stringent requirement that ensures the safety of consumers--eased the processes and attendant cost to product certification to create a respite for these SMEs. For an economy that is largely

dominated by SMEs, this is a major boost as it expands the market of these SMEs. Given the damage the Covid-19 pandemic has caused businesses, the FDA’s Progressive Licensing Scheme (PLS) could not have come at a better time. The PLS certification enables SMEs to produce local goods that meet international health, safety and hygienic standards. Currently, 56 SMEs have received the certification from the FDA. Ghana has a very vibrant retail culture and for products of these SMEs to be given a chance to have a go at it, a lot of these SMEs are in line to have their businesses transformed. This is paper would like to

commend the regulator on its proactiveness to the plight of these small businesses. Indeed, making made-in-Ghana goods a mainstay on our supermarket shelves requires a comprehensive approach. With the regulatory bit attended to, it is welcoming to see the retailers also expressing their intention of providing more shelves for these products. The increase in access to market is bound to come with it an expansion in capacity. These SMEs must stand ready to expand or maintain a constant supply when need be. They risk shooting themselves in the foot if they fail to put in place measures that can help them meet demand.

Stock market returns surge after election Continued from cover The market’s total capitalisation increased by 0.67 percent to GH¢53.46bn, from GH¢53.1bn at the end of the previous week. Trading activity is expected to continue to surge until the end of the year. GDP data due to be issued on Wednesday will probably show a rebound in economic activity in the third quarter, after the Covid-induced contraction recorded in the second quarter. This will further increase investor confidence in the final weeks of 2020. “The market would have reacted otherwise if the elections could not produce a president. That would have been seen as some level of political instability,” Kofi Bussia Kyei, an analyst at UMB Stockbrokers, said in an interview with Business24. “Current post-electoral issues, such as the claims by the largest opposition party, are not affecting the performance of the

market,” he added. Largely, analysts had expected that the market would react better to a victory by the incumbent administration, which is seen as more pro-business than the opposition party, even though

the current government has presided over the longest bear market in the history of the GSE. Last week’s market advance was largely influenced by the GSE Financial Stock Index (FSI), which cut its year-to-date losses

News

MONDAY DECEMBER 14, 2020

Multinational retailers to increase stocking of local products Continued from cover Most are targeting a range of Made in Ghana items in stock for the Christmas sales and beyond. The PLS certification was introduced by the FDA to enable Small and Medium Scale Enterprises (SMEs) to produce local goods that meet international health, safety and hygienic standards. Currently, 56 SMEs have received the certification from the FDA. Instructively, six leading retail shops – Shoprite, Melcom, Marina Mall, Spar Supermarkets (Citydia), Koala Shopping Centre and Palace Shopping Mall – have all endorsed the PLS and are anticipating to stock products from these 56 enterprises into their product portfolio. Last year, a report by a diversified international advisory firm, Konfidants, indicated that only 18 percent of consumable goods sold in Ghana’s leading supermarkets were locally manufactured The report which covered eight leading supermarkets aimed at monitoring local content to provide evidence-based insights to: (i) guide policymaking, (ii) inform strategic engagement with supermarkets, and (iii) provide technical support to local producers. The report findings indicated that the best performing category

of Made in Ghana goods was eggs (with 91 percent of all eggs on sale produced in Ghana), followed by bottled water (with 56 percent). Worst performing categories, however, were jointly rice and cosmetics and beauty products with six percent each of the products sold in this category produced locally. Confectioneries and biscuits, beverage powder, tea and sanitary products also recorded less than 10 percent of local products (Made in Ghana) across the supermarkets. With the introduction of the PLS initiative, according to the retail outlets involved in the initiative, supermarkets will see a significant increase in the volume of Made in Ghana products that are on sale in these shops. Expectations from supermarkets Shoprite is optimistic about the partnership and said the PLS has made stocking Ghanaian products a lot easier. Mr Kwame Larbi-Siaw, the Divisional Buyer Manager at Shoprite said though they have a policy of supporting local SMEs to thrive. “After FDA’s approval, we look at other qualities of the product to consider but the approval of FDA is a significant starting point for us,” he disclosed.

The Director of Logistics at Palace Shopping Mall, Emmanuel Kobby Hagan expressed excitement at the PLS and said the initiative will lead to increased stocking of locally-manufactured products from Ghanaian SMEs. “We have always worked closely with the FDA and this certification scheme further strengthens our confidence in made in Ghana products. Palace has its own internal checks and regulatory requirements for locally-produced goods but approval from the FDA usually is a key and first requirement for us,” he said. Melcom has also highly commended the initiative and said the first point it considers before stocking made in Ghana goods is the FDA certification and approval. The Regulations Manager at Melcom Ghana, Mark

Frimpong, said the PLS will help erase the several inconveniences that confront their operations including being approached by individual lobbyists to stock locally produced goods in Melcom. A Regulatory Officer at Spar Supermarkets, Hephzibah Sam, said Spar is excited at this PLS partnership and looks forward to stocking more made in Ghana products that meet the FDA’s requirement. She added that the basic requirement for Spar as a retail shop is quality and this is further deepened by the FDA certification. The retailers anticipate that through the PLS, challenges such as packaging, labeling, branding and the production of items under strict hygienic conditions will be adhered to. All have said the number one challenge they encounter is branding and packaging of these locally manufactured products, which will be resolved by the PLS. Products targeted in high volumes With the PLS, the retailers are anticipating to increase the stock of local products such as eggs, bottled water, gari, sugar, porridge powder, cooking oil, confectioneries, pepper sauce, fruit juice and beverages, local dairy products, among several others.

Moody’s sees further loan quality decline among Ghanaian banks Continued from cover In its latest 2021 outlook for banks in Africa, Moody’s is anticipating nonperforming loans (NPLs) to potentially double from 2019 levels as payment holidays expire, while increased provisioning needs, reduced business generation, and margin pressure erode profitability. NPLs, according to central bank data, stood at 15.3 percent of total loans in October compared with 14.3 percent in December 2019. The ratio has fallen from a peak this year of 16.1 percent in July. “We expect NPLs to continue to increase due to the coronavirusinduced economic disruption,

but remain below the 21.6 percent level as of December 2017. While central bank’s support measures help moderate the negative impact on the banks and the broader economy, they are unlikely to fully counter the impact of the pandemic,” Christos Theofilou, a vice president and banking analyst at Moody’s, said in an email interview with Business24. Moody’s anticipates that rising government arrears will hurt the loan repayment capacity of government contractors and subcontractors. Sectors most at risk include loans to small and midsize firms (SMEs), companies exposed to

subdued commodity prices and to the broader hospitality sector, and foreigncurrency loans to unhedged borrowers. “Although loan repayment holidays and other support measures by authorities will help support viable companies, they will not eliminate risks, and in some cases, they will simply delay the recognition of problem loans,” the rating agency said. It added: “Ghanaian banks are nonetheless entering the downturn in a stronger position

than a few years ago. Banks’ capital, profitability and efficiency have strengthened, and funding and liquidity concerns had been easing following a clean-up and recapitalisation of the financial sector.”

MONDAY DECEMBER 14, 2020

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MONDAY DECEMBER 14, 2020

AfDB says new strategy will address debt distress risks in Africa By Eugene Davis

he African Development Bank (AfDB) will from next year roll out a five-year strategic economic governance plan for the continent, the Director of Macroeconomic Policy, Forecasting and Research at the bank, Dr. Morsy Hanan, has said. According to her, the “New Strategy for Economic Governance in Africa” (SEGA), expected to run from 2021 to 2025, deals with comprehensive collation of data to inform regular debt sustainability analyses, and supports the design and adoption of legislation and regulations on implicit guarantees and contingent liabilities of stateowned enterprises (SOEs). Speaking at a virtual seminar on debt management postCovid-19 in Africa, held under the auspices of the AfDB, Dr.

Hanan said institutionalising the creation of medium-term debt strategies and publication of annual debt reports; enhancing capacity for compiling debt statistics; and recording, monitoring and reporting using credible IT systems, such as debt management and financial analysis systems, were critical. The bank is also developing a framework for the multidimensional action plan on the management and mitigation of debt distress risks in Africa, she added. There has been heightened interest among African countries to access international capital markets, which has put public debt sustainability high on the continent’s policy agenda once again. Dr. Hanan said fiscal policies will need to play a greater role in maintaining debt sustainability in the future.

Dr. Morsy Hanan is the Director of Macroeconomic Policy, Forecasting and Research at the AfDB.

According to the AfDB, Africa has embarked on a process of economic transformation, which has resulted in sustained growth over a decade. However, the growth has been uneven, without a sufficiently firm foundation, and is not—by any estimation— complete, it added. The bank said it aims to broaden and deepen the process

of transformation, mainly by ensuring that growth is shared and not isolated, and is for all African citizens and countries, not just for some. The Chief Economist of the AfDB, Rabah Arezki, urged the international community to come to the aid of Africa in these challenging times.

expressPay begins international remittances from the UK

inancial technology company, expressPay, as part of its expansion drive, has launched its innovative remittance service from the UK to Ghana. The service allows users in the UK to send remittances from the UK instantly into recipient bank accounts or mobile money wallets. In a virtual ceremony to launch the service in Accra, CEO of expressPay, Curtis Vanderpuije underscored the significant role its loyal customers played in the introduction of the remittance

service. “At expressPay, we are constantly driven by our customer needs. We have come this far on a remarkable journey together with customers whose needs have always informed our next set of innovative products and services. We are leveraging our vast experience in realtime domestic money transfers to deliver international money transfers.” The CEO added: “Our launch starts the service from the UK to Ghana, but will soon expand to other corridors. Our

customers abroad can look forward to transfers to many other destinations in the coming months”. During the launch event, one lucky participant was rewarded with an instant transfer from a participant who joined from London. The funds were sent using a UK issued Visa card straight to the recipient’s MTN Mobile Money wallet in seconds, marking the first transaction of the expressPay remittance product. expressPay Client Engagement Manager, Charles Edem Goh,

added, “the tagline for the service, ‘Twa Me Pounds’ resonates well with Ghanaians who are keen to receive funds from friends and family abroad. The service comes at a muchneeded time as it eases the need for UK senders to leave their homes to make transfers at traditional money transfer agent outlets, in the middle of the pandemic. They can simply transact using the expressPay app, right at home. The service is as affordable as it gets – there are currently no charges for the transfers.”

MONDAY DECEMBER 14, 2020

News

MONDAY DECEMBER 14, 2020

Huawei donates to Cantonment Divisional Police

n the bid to support frontline police officers discharge their duties in times of the Covid-19 pandemic especially within the Cantonment enclave, Huawei Technologies Ghana this month, has donated groceries and confectionaries to the Cantonment Divisional Headquarters of the Ghana Police Service. The Items worth over GHC50, 000 benefited police personnel who have shown much dedication and commitment in delivering their mandate towards the protection of both citizens and foreign residents in Ghana. Speaking on the intent of the donation, Jenny Zhou the Deputy Director for Public and Government Affairs at Huawei Ghana mentioned that the donation forms part of Huawei’s commitment to give back to the society in which it operates. According to her, the Police Service has and continues to play a significant role in keeping the citizenry safe in times of covid-19 and beyond and this donation is a way to further support them in their operations. Receiving the items on behalf of the Police Service, the District Commander, Superintendent

Simon Peter Akabati thanked Huawei for the kind gesture stating that, the Police Service is appreciative of the ICT giant’s effort and support and looks forward to more collaborations which will help the police serve the district better. Since entering the Ghanaian market in 2001, Huawei has undertaken several CSR activities

to support the socio-economic development of various communities in the country especially in the areas of ICT, Education and health. In the heat of the pandemic earlier this year, Huawei contributed to Ghana’s fight by donating ICT equipment which helped in the observance of various Covid-19 safety protocols,

provided remote talent training, and supported network coverage improvement with unserved and underserved communities. Huawei will continue to create value for all Ghanaians through innovative technologies and social contribution towards the achievement of a fully connected intelligent Ghana and the world at large.

A AAAM, VDA appoint Project Managers

he African Association of Automotive Manufacturers (AAAM) in partnership with the German Association of the Automotive Industry (VDA) have announced the appointment of two Project Managers that will support the implementation of the Partner Africa project to industrialise and grow the automotive sector in Africa.

These appointments have been facilitated through the financial support of the German Federal Ministry for Economic Cooperation and Development (BMZ). Victoria BackhausJerling will be based at the NAACAM (National Association of Automotive Component and Allied Manufacturers) offices in Johannesburg and will lead the

engagements between the AAAM and the VDA. Victoria’s recent employment in the German government, along with her knowledge of the German automotive industry and her fluency in both English and German equip her well to coordinate and drive automotive development projects in Africa. Eugene Sangmortey on the

other hand will be based at the offices of the Delegation of German Industry and Commerce in Ghana (AHK Ghana). Eugene’s engineering background and experience in vehicle dealerships and the after-sales environment position him well to develop the automotive ecosystem in Ghana and the ECOWAS region. “We are privileged to have two such experienced project managers joining the AAAM which will strengthen our African footprint and are grateful that the VDA have partnered with AAAM to assist in our drive to grow the automotive industry on the continent. We welcome Victoria and Eugene and look forward to their valuable contribution to the Partner Africa project, said David Coffey the CEO of AAAM. There will initially be two project offices - one in Johannesburg which will open in January and the other in Accra which opened on 1st December. Victoria and Eugene will be the contact points for both AAAM and VDA members as well as for public and private stakeholders of the automotive cooperation project.

MONDAY DECEMBER 14, 2020

News

MONDAY DECEMBER 14, 2020

World Bank Grants US$60million for resilience of Agricultural Sector in Africa

he World Bank Board of Directors today approved a US$60 million International Development Association (IDA) grant to help African countries strengthen the resilience of their agricultural sectors to the threat posed by climate change. The grant fulfils the World Bank’s commitment at the 2019 United Nations Climate Summit to increase its support to the CGIAR, a global partnership that unites international organizations engaged in research about food security, to help advance agricultural research efforts for the benefit of rural households that rely on agriculture as a major livelihood source, and to increase food security. Through the new operation --Accelerating the Impact of CGIAR Climate Research for Africa project, AICCRA—the World Bank will support research and capacity-building activities carried out by the CGIAR centers and partner organizations, with the goal of enhancing access to climate information services

and validated climate-smart agriculture technologies in Africa. By gaining better access to climate advisories linked to information about effective response measures, farmers and livestock keepers will be able to better anticipate climate-related events and take preventative actions that can help to safeguard productive activities and avoid catastrophic losses. Mobilizing science and innovation for the benefit of

agricultural development is consistent with the commitments made during the Africa Food Security Leadership Dialogue (AFSLD), a multi-partner initiative formed in 2019 to deal with the problem of hunger and vulnerability to climate change on the African continent. The new project responds to the AFSLD call for joint action against hunger in the face of climate change, at a time when the COVID-19 pandemic has further increased

the vulnerability of millions of households. AICCRA activities will be concentrated in six countries — Senegal, Ghana, Mali, Ethiopia, Kenya, and Zambia— but its benefits will be realized regionwide: “Knowledge generation and technology transfer are deserving of IDA regional support, because the benefits flow across national boundaries and therefore are unlikely to be supported adequately by individual governments acting alone,” says Ms. Deborah Wetzel, World Bank Director of Regional Integration for Sub-Saharan Africa, the Middle East, and Northern Africa. “CGIAR plays a unique catalytic role in strengthening global, regional and local capacity to combat the effects of climate change, in Africa and throughout the world”. AICCRA will be administered by the International Center for Tropical Agriculture, the lead center for the CGIAR Program on Climate Change, Agriculture, and Food Security (CCAFS).

GSS commences CAPI Training of Master Trainers for the the importance of the exercise 2021 Population and Housing Census and the need for participants to

he Ghana Statistical Service (GSS) has commenced the last phase of training for Master Trainers for the 2021 Population and Housing Census (PHC) in Winneba. This in-person training workshop on Computer Assisted Personal Interviewing (CAPI) is scheduled to last for 8 days (i.e. from 9th to 16th December 2020). This follows a 9-day virtual training programme which was held earlier (23rd November to 3rd December, 2020 excluding weekend). The CAPI training is necessary because the upcoming 2021 PHC which is scheduled to take place in April and May 2021 is a digital census that involves the use of tablets (Computer Assisted Personal Interviewing, CAPI) for electronic data capture and syncing. As such, trainers for the 2021 PHC are required to have mastery of the use of tablets in addition to the questionnaire content and enumeration procedures. In all, 127 prospective Master Trainers are participating in the workshop which will involve assessments to determine the

participants who will be selected as Master Trainers for the 2021 PHC. The Master Trainers are at the apex of a four-tier training strategy for the 2021 PHC which aims to train approximately 75,000 Field Officers to collect data. Master Trainers will train National Trainers who will in turn train Regional Trainers who will directly train Field Officers. At the opening ceremony for the training, Mr. Owusu Kagya, the Head of Census Methodology welcomed participants on

Participants listening to the welcome address

behalf of the Management of Ghana Statistical Service and the training team. He entreated participants to take the training seriously because census work is demanding and requires commitment. He stressed that the main objective of the census is to collect credible usable data for decision-making and as such effective training is key to making this possible. The Head of the National Census Secretariat, Mr. George Emmanuel Ossei also emphasized

observe all the health and safety protocols that have been put in place. The conduct of the Census is in accordance with the objectives of Ghana Statistical Service to provide quality, relevant, accurate and timely statistical information for national development as stipulated in Clause 3 of the Statistical Service Act, 2019 (Act 1003) and oversight of capacity building in the statistical ecosystem.

MONDAY DECEMBER 14, 2020

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MONDAY DECEMBER 14, 2020

Why network?

ots of people ask “should you network when you need a new job?” If you choose to network just to try and find a new job it will not be successful. Networking is the process of building and maintaining a network of contacts, and successful networking needs to be ongoing. It should be a regular event within you diary. It does take effort to get to know new people, and to keep up with existing contacts. Networking is based on the idea that you can build a relationship with people from a point of common interest. This might be, for example, your professional background, membership of an institution, club or college, or a business interest. Why is networking so important? Networking is important because we all prefer to do business with people we know, or who are known to people we know. Broadening your network

therefore opens up your business opportunities, whether to sell, buy, recruit or get a job. It is worth remembering the value of ‘small talk’ in building relationships. Do not underestimate the value of ‘chat’. Relationships are built on personal connections, and the feeling that someone else cares about you and is interested in what you are saying. Try to build up rapport and find a common ground with people. It is also important not to discard anyone on the grounds that you don’t think they can do anything for you—you may find that there is a lot more to them than meets the eye.

(BforB)

Top Tip!! Remember, networking is about building relationships and not selling yourself or a product. It is also far better to make a genuine connection with just one or two people than press your business card on 30 people.

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you can build quality relationships within your group, backed up by an ongoing member support programme. BforB is committed to helping small to medium scale businesses expand. In our professional network, members meet regularly in business networks to develop relationships, support each other and to share and record referral business. We are here to help you get new business from quality business introductions and referrals made through our meetings. Kindly join our next meeting using this link: https://rb.gy/qrf4pl

BoG, Monetary Authority of Singapore sign MoU to promote SMEs

he Bank of Ghana (BOG) has on December 8, 2020 signed a Memorandum of Understanding (MOU) with the Monetary Authority of Singapore (MAS) to collaborate in promoting Small and Mediumsized Enterprises (SMEs) through the use of technology. This is a follow up to earlier engagements between the Governments of Ghana and Singapore, which culminated in an understanding between the two countries to work together and explore the use of technology in improving their economies for global competitiveness. The MOU is aimed at building the capacity of SMEs to leverage technology for efficiency, market discovery and accessibility to global markets. Importantly, the partnership is expected to assist the seamless integration of each country’s SME ecosystem into the global trade value chain, while introducing innovative FinTech solutions to improve SMEs’ access to financial and digital tools. The BOG and MAS will also collaborate to develop a Financial Trust Corridor (FTC) to engender trust aimed at promoting

trade between businesses and financial institutions in Ghana and Singapore. This MOU is important to Ghana’s development agenda due to the significant contribution of SMEs towards the provision of goods and services, job creation, and ultimately economic growth. Notably most SMEs are womenowned, represent a majority of businesses, and contribute significantly to the country’s Gross Domestic Product (GDP). Improving the market reach of

SMEs through digitization will therefore advance gender-related employment opportunities, provide affordable access to finance, and boost economic growth. Currently, Ghana is a satellite host of the five (5) day 2020 Singapore Fintech Festival (SFF) which started on December 7, 2020 and ended on December 11, 2020. Indeed, the choice of Ghana as a satellite host is an endorsement of Ghana’s growing technological

capabilities and nascent Fintech industry. With Singapore being an important technology hub in Asia, and Ghana, being an emerging FinTech powerhouse in sub-Saharan Africa as well as hosting the Africa Continental Free Trade Area (AfCFTA) Secretariat makes this relationship significant. The anticipated gains from this MOU will have a positive impact on AfCFTA and underscore Ghana’s position as a gateway to Africa.

MONDAY DECEMBER 14, 2020

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MONDAY DECEMBER 14, 2020

Home delivery is the new normal for many – ensure a smile in the last mile

utting a “smile into the last mile” will be key to retaining customers through lockdown and beyond, as the widespread shift to home deliveries is set to outlast the Covid-19 pandemic. From large retailers and restaurant chains to artisan food producers and small farmers, lockdown in South Africa has seen a surge in online shopping and home delivery ordering, a trend that’s expected to turn into a lasting change in consumer behaviour. This change makes the last mile, which refers to the delivery of a product into the customer’s hands, even more critical to customer satisfaction and repeat business. University of Stellenbosch Business School (USB) senior lecturer in operations management, Tasneem Motala, said that consumer behaviour studies show that the final encounter with a business – which includes “the last mile” in logistics-speak – is one of the most critical elements in customers’ judgment of their overall shopping experience and decisions on repeat purchases. “Realistically this means that significant investment in customer acquisition activities, website quality, and offering competitive prices could be partially nullified if a customer has a poor experience when taking final receipt of the goods,” said Motala, who heads up the USB’s Postgraduate Diploma in Business Management and Administration (PGDip BMA) programme. Businesses who responded to lockdown restrictions with agile and flexible delivery solutions have set the bar and increased customer expectations. The businesses who are lagging behind now need to reconfigure supply chain strategies, integrate information technology and strengthen delivery partner relationships in order to continue meeting these new demands and gain competitive advantage, she said. “In the past few weeks, it’s been often said that we ‘should never let a good crisis go to waste’. While the Covid-19 pandemic has resulted in significant economic upheaval locally and globally businesses can also use it as an opportunity to innovate their operating models and enhance their service offering to acquire and retain customers,” she said. While customers may have been patient and tolerated shipping delays or inconsistency in

she said. A business could consider the Amazon Prime model and introduce a paid loyalty programme with an annual subscription that offers member discounts and free and/or sameday shipping for a certain number of deliveries over the course of a year. This will ensure speed and convenience, both considered order winners in the online environment, and will also delight loyal customers. She warned though that the business would need to tightly manage shipments to customers willing to pay a premium for expedited service, so as to meet expectations and not disrupt the rest of its operation. • Alternate channels

delivered products as businesses and individuals all adapted to an uncertain new reality in the first weeks of lockdown, Motala said consumers would now expect businesses to have adapted and be capable of seamless service from ordering to delivery. Motala outlines aspects that businesses could consider to improve their “last mile” and strengthen competitive advantage: • Outsource or insource the last mile Outsourcing deliveries has the benefit of reduced delivery costs and greater network reach, but the business also relinquishes control of their last mile delivery. Owning the delivery channel allows for greater control over the quality of the customer encounter and providing value-added services such as booking of delivery slots and reassurance on sanitisation and hygiene protocols. Motala says smaller businesses can capitalise on the #supportlocal sentiment brought about by the pandemic by making changes in their operations and marketing, for example by hiring local delivery drivers. “A slightly increased (yet still palatable) delivery fee, stating that the increase is due to hiring

individuals from the community and that 100% of the delivery fee goes to the driver, may in fact attract new customers to the business.” For restaurants and takeaway outlets, using their own delivery channels can overcome the obstacle of only being available to those within a certain geographical radius, as is the case with deliveries outsourced to established food delivery services. • Customer loyalty programmes Motala said that online retailers often reward only first-time customers with discount codes or free delivery as part of their customer acquisition strategy but the new shift in buying habits suggests that now is the time for businesses to consider how to reward loyal, repeat customers. “Evidence from behavioural science indicates that services should be designed in such a way that pleasurable encounters are broken up, whereas painful encounters are combined. For example, the ‘painful’ experience of paying for delivery may appear less painful if done once-off at the beginning of the year, compared to the current segmented approach of delivery per order,”

Alternatives such as curb-side pickup or click-and-collect in store are attractive to both businesses and customers because they reduce last mile delivery costs and pressure on delivery slots. But they need to be well-managed to avoid customers waiting in queues or in their vehicles, which could do more harm than good for the business in the long-term, Motala said. She suggests taking a lesson from manufacturing to control the process for operational efficiency and customer satisfaction, adopting strategies such as booking time slots for collections and incentives for customers using off-peak collection times. The visual management used in manufacturing to communicate processes to employees is another useful lesson, she said. Retailers can improve collection processes by clearly marking parking bays and collection areas with visual cues and sending guidelines or simple process maps to customers in advance so that they are “trained” on how to receive their goods smoothly. Even as lockdown restrictions are relaxed, the risk of “superspreading events” in malls and supermarkets makes it likely that consumers will continue preferring contactless shopping and the convenience of home deliveries. Businesses therefore need to ensure that they pay as much attention to their last-mile strategy as to the quality of their product, to guarantee customer satisfaction. CONTACT DETAILS Dr Marietjie van der Merwe USB Representative Marie@globalnatives.com +230 606 2341 / +230 5 701 1362

MONDAY DECEMBER 14, 2020

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MONDAY DECEMBER 14, 2020

T. 1 9 5 7

O F GH A

BANK OF GHANA NOTICE TO BANKS AND PUBLIC NO BG/FMD/2020/84 GOVERNMENT OF GHANA SECURITIES 1.

RESULTS OF TENDER 1724 HELD ON 11TH DECEMBER, 2020 FOR GOVERNMENT OF GHANA SECURITIES TO BE ISSUED ON 14TH DECEMBER, 2020.

ISIN

SECURITIES

BIDS (AMT) TENDERD GH¢ (M)

BIDS (AMT) ACCEPTED GH¢ (M)

RANGE OF BID RATES (% P.A.)

BID RATES ALLOTTED IN FULL (%P.A.)

Discount Rate

Interest Rate

WEIGHTED AVG. RATES FOR THE WEEK 14TH – 18TH DEC. 2020. (%P.A)

Discount Rate

Interest Rate

GHGGOG062035

91 Day Bill

GH¢880.29

13.5500-13.6500

14.0251-14.1323

13.5988

14.0774

GHGGOG062043

182 Day Bill

GH¢123.87

13.1000-13.2500

14.0182-14.1901

13.1827

14.1129

GHGGOG062050

364 Day Bill

GH¢62.38

14.3500-14.6000

16.7542-17.0960

14.5214

16.9883

TARGET FOR 91/182/364 T/BILL: GH¢925.00 Million

2. SUMMARY GHGGOG059817 SECURITIES

OF TENDER 1723 HELD ON 4TH DECEMBER, 2020 FOR TREASURY BILLS. TOTAL AMOUNT TENDERED

TOTAL AMOUNT SOLD

91 AND 182 DAY T/BILLS

GH¢1,179.39 Million

2 YR NOTE

GH¢371.72 Million

3. TARGET FOR TENDER 1725 SECURITIES

91, 182 AND 364 DAY BILLS

AMOUNT

GH¢1,799.00 Million

The GOG Securities Wholesale Auction is opened to only Primary Dealers.

II)

All Primary Dealers are obliged to act as market makers in GOG Securities.

III) The Investing Public interested in purchasing or selling GOG Securities may do so on the Secondary Market (Ghana Fixed Income Market) through Depository Participants (including Primary Dealers).

(SGD.) SANDRA THOMPSON (MS) THE SECRETARY

………………………………………………………… ………………………………………………………… ………………………………………………………… ………………………………. 11TH DECEMBER, 2020

MONDAY DECEMBER 14, 2020

Feature

MONDAY DECEMBER 14, 2020

The 2020 Financial Year of Ghana:

Tax Administration Reforms Arising out of the National Budgets and the COVID-19 Pandemic (Part 1) This article is the fifth in a series of articles exploring the 2020 Mid-Year Fiscal Review, in light of the initial 2020 Budget Statement and Economic Policy of Ghana, and the COVID-19 pandemic we did not anticipate.

December 2020

With very bright prospects when the Minister of Finance presented the budget to Parliament in November 2019, little did anyone expect the COVID-19 pandemic to strike and send shock waves across the entire globe. These bright prospects were reflected in the very promising theme of “Consolidating the Gains for Growth, Jobs and Prosperity for All” for the 2020 National Budget. As COVID-19 had distorted several of Government’s initial plans, it was clearly time for a complete revision of the initial estimates in the 2020 budget. Following from this, as in our previous series on indirect tax and direct tax policy measures, the series continues and attempts to explore the position of the initial 2020 budget estimate and the mid-year fiscal review, this time from the perspective of tax administration measures or proposals. Tax administration measures that were introduced as a result of COVID-19 will also be touched on in this series. In this particular series however, we will focus mainly on pre-COVID-19 tax administration measures for the 2020 fiscal year. The COVID-19 tax administration measures and the 2020 Mid-Year Review on tax administration will be the subject of our next article in this series.

The 2020 Budget Statement and Economic Policy - Tax Administration Proposals As a means of achieving the initial tax revenue target set by the Government, several tax policy measures were introduced to complement existing tax revenue measures. The tax administration measures proposed included restructuring the tax system and developing a comprehensive revenue policy and strategy, reforming the Ghana Revenue Authority for efficiency and productivity, and the passing of the Revenue Administration Regulations and Transfer Pricing Regulations. These are briefly discussed below, together with an indication as to whether the measures have been implemented as at the time of the presentation of the 2020 Mid-Year review in July:

Restructuring the tax system and developing a comprehensive revenue policy and strategy Not fully implemented To address the challenges of revenue mobilisation, the Government sought to restructure the tax system and develop a comprehensive revenue policy and strategy. On average, over the last few years, the Government has missed its revenue targets although tax revenue has experienced some year on year growth. In most cases, the Government attributed the shortfall in the

total revenue to under performance in tax revenues. It was therefore not a surprise that the Government was looking to restructure the tax system in a bid to address the challenges with domestic revenue mobilisation. In our view, the restructure of the tax system should include exploring ways of broadening the tax net to include especially the informal sector, and a review of the current benchmark values system being operated at the ports. We also recommend that the Exemptions Bill which was introduced during the first quarter of 2019 and aimed at streamlining and sanitising the exemptions regime in Ghana, be passed into law as soon as possible. In addition to the above, it is our expectation that the restructure of the tax system will result in the employment of technology to make the tax system more efficient and taxpayer friendly especially as Ghana dropped four places in the 2019 World Bank Ease of Doing Business Report.

Reforming the GRA for efficiency and productivity Not fully implemented Under this proposal, the Government intended to work with the new leadership of the Ghana Revenue Authority (‘‘GRA’)’ under a transformation programme centred on the three main themes of People, Technology, and Service to create a “New GRA” that will reflect the very best of efficiency and productivity. Prior to 2009, tax was principally administered in Ghana by three separate agencies - the Internal Revenue Service, VAT Service and the Customs, Excise and Preventive Service. In December 2009, these three agencies were merged together with the Revenue Agencies Governing Board Secretariat in accordance with the Ghana Revenue Authority Act, 2009 (Act 791) to form the GRA. Arguably, the creation of the GRA has resulted in some gains. Ten years on, a reform aimed at making the agency more productive is welcome. We however hope that a credible statistical and economic impact assessment has or will be done to support the reforms. 10 years after the creation of the GRA, we are aware that the Domestic Tax Revenue Division has reorganised its offices by merging small taxpayer offices and medium taxpayer offices to create Taxpayer Services Centres (TSC). The inclusion of “services” in the name of the merged office is encouraging and we hope that taxpayers will experience quality services when dealing with the merged offices. We hope the GRA transformational themes of people, technology and services will be brought to light through the creation of the TSC and related units.

Passing the Revenue Administration Regulations and Transfer Pricing Regulations - Implemented In the 2020 Budget, the Government proposed to introduce a Revenue Administration Regulations (“RAR”) and revised Transfer Pricing Regulations (“TPR”). The 2018 Budget mentioned the introduction of Voluntary Disclosure Procedures (“VDP”) to waive penalties on voluntary disclosure by taxpayers and an Alternative Dispute Resolution (“ADR”) mechanism to resolve tax disputes between taxpayers and the tax authority. The RAR has been replaced with an amendment Act, the Revenue Administration (Amendment) Act, 2020 (Act 1029) for the establishment of an Independent Tax Appeals Board and the introduction of VDP, amongst others. In line with global trends, we also have a new TPR. We believe this will go a long way to help the Government in its quest to meet revenue targets.

Bringing it All Together From the above, you may notice that the Government has made some progress in implementing the tax administration measures proposed in the 2020 Budget. The next article in this series will focus on the tax administration measures introduced post COVID-19 and the 2020 Mid-Year Fiscal Review. For the Government to be able to meet its revised tax revenue targets, it is essential that the Government puts in place measures to ensure that our tax administration framework in Ghana is very robust to meet the uncertainties ahead.

Want to know more? Let’s talk. You can contact us by sending an email to abeku.gyan-quansah@pwc.com and mary.kwarteng@pwc.com

Abeku Gyan-Quansah is a Partner in PwC Ghana and the PwC West Africa Indirect Tax Leader. He is a regular speaker on tax matters and faculty lead of the Tax Centre of the PwC Business School in Ghana.

At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 155 countries with over 284,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

MONDAY DECEMBER 14, 2020

World

MONDAY DECEMBER 14, 2020

Ikea sorry after port disruption causes stock shortage

ales at the Swedish retailer have boomed in lockdown as people spend more on doing up their homes. But a spokeswoman said its supply chain - including the ports where its products are received - had been hit by the effects of Covid-19 and product availability had been impacted. “These continue to be extraordinary times and we apologise unreservedly for  the inconvenience caused to our customers,” she added. “We  fully understand their frustration and want to assure them that we are working intensively to resolve these challenges as soon as possible.” Imports ranging from building materials to toys and fresh food have been held up due to the issues at ports, causing headaches for businesses. Carmaker Honda even had to pause production last week due to a shortage of components. On Saturday, the British Ports

Association said the issues were now “cascading”, with long queues of traffic outside lorry ports becoming increasingly common. ‘Perfect storm’ Its boss Richard Ballantyne blamed a “perfect storm” of surging global container

movements, the busy preChristmas period and people moving more goods before the UK’s Brexit transition ends. “This is putting pressure on the logistics and storage sectors both in the UK and abroad,” he said. Some have warned price rises are likely due to the problems. Ryan Clark, director of the Essex-based freight forwarder

Westbound Logistics Services, told the BBC last week: “The increase in freight is either creating more expensive prices for the consumer, or unsustainability for businesses that will be forced to close where the onward price cannot be increased.” BBC

Britons told not to stockpile food ahead of January

ouseholds have been warned not to stockpile food and toilet roll ahead of 1 January when the UK stops trading under EU rules. On Sunday, the UK and the EU agreed to extend a deadline aimed at reaching a deal on postBrexit trade. The British Retail Consortium (BRC) said ongoing uncertainty made it harder for firms to prepare for the New Year. But it said shops had plenty of supplies and shoppers must not buy more food than usual. “Retailers are doing everything they can to prepare for all eventualities on 1 January increasing the stock of tins, toilet rolls and other longer life products so there will be sufficient supply of essential products,” said BRC chief executive Helen Dickinson. “While no amount of preparation by retailers can entirely prevent disruption there is no need for the public to buy more food than usual as the main impact will be on imported fresh produce, such as fresh fruit and vegetables, which cannot be stored for long periods by either retailers or consumers.” Supermarkets are now used to dealing with anxious shoppers. During the first lockdown earlier this year to stop the spread of the coronavirus, grocers introduced limits on goods such

“Government must move with even more determination to avoid the looming cliff edge of 1 January.” ‘Very frustrating’

as toilet roll, dried pasta and UHT milk after panic buying by Britons. There are fears shoppers might think disruption at ports after 31 December could lead to shortages in shops as the UK transitions to new trading rules with the EU. The UK and the EU have agreed to carry on trade talks past Sunday’s deadline. In a joint statement, Prime Minister Boris Johnson and European Commission President Ursula von der Leyen said it was “responsible at this point to go the extra mile”. But Mr Johnson told the BBC the two sides are “still very far part on some key things”, and said the “most likely” course is an Australian-style trade deal with the EU. He admitted that this type of deal “it is not where we wanted to get to but if we have to end up

with that solution the UK is more than prepared”. However, Ms Dickinson warned: “Without a deal, the British public will face over £3bn in food tariffs and retailers would have no choice but to pass on some of these additional costs to their customers who would see higher prices filter though during 2021.” Other business groups welcomed the extension to trade talks but also cautioned that it was imperative that the UK avoid a no deal Brexit with the EU. “The news that talks will continue gives hope,” said Tony Danker, director-general of the CBI business lobby group. “A deal is both essential and possible.” While Mr Danker said that “ongoing delays are frustrating and cost businesses,” he urged the government to “make use of the time”.

The British Chambers of Commerce’s director general Adam Marshall said it is a “very frustrating time for business”. But he added: “If a few more hours or days makes the difference, keep going and get an agreement that delivers clarity and certainty to businesses and trade on both sides. Businesses will need time and support to adjust in a New Year like no other whatever the eventual outcome.” Make UK, the manufacturers’ trade body, said that after more than four years of uncertainty “UK manufacturers are now facing the most challenging start to the New Year, dealing with a pandemic and the risk of having no trading arrangement with our largest market”. Make UK’s chief executive Stephen Phipson said: “Today we are asking that the Prime Minister and President of the EU Commission work together and find a pragmatic solution to deliver a zero tariff and zero quota deal to avoid additional friction at the border.” BBC

MONDAY DECEMBER 14, 2020

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Feature

MONDAY DECEMBER 14, 2020

Who will succeed Merkel?

By Josef Joffe

erman Chancellor Angela Merkel’s Christian Democratic Union (CDU) has ruled the 71-year-old Federal Republic for a total of 50 years. When she steps down next fall after 16 years in office, it is safe to assume that another Christian Democrat will succeed her. Who will it be? Within the next few weeks, the CDU will hold its 33rd party convention, and choose a new leader. Whoever it is will most likely be anointed as the CDU’s candidate for chancellor when Merkel steps down, and there is little doubt that the CDU will come out on top in next September’s general election, whereupon it will take the lead in forming the next government. The three men vying for the party’s top job are not household names abroad. The first (going in alphabetical order) is Armin Laschet, the minister-president of North Rhine-Westphalia and a longtime party workhorse whose charisma does not match his competence. Next is Friedrich Merz, who led the CDU caucus in the Bundestag two decades ago, until he was driven out by Merkel as she prepared her own run to the top. After slinking off to the private sector and making oodles of money, he is pushing for a comeback. The third contender is Norbert Röttgen, the chairman of the Bundestag’s Foreign Affairs Committee. He served a brief stint as environment minister under Merkel until she fired her then-fair-haired boy. Laschet is Merkel’s unspoken favorite, if only because the other two have accounts to settle with “Mutti” (mom), whose

path to power is strewn with the corpses of not-so-steely rivals. Owing to COVID-19, we don’t yet know when and how the CDU will choose its next leader. But whether it meets physically or virtually, the party will decide this month on a convention date in mid-January. There is no real front-runner. Merz commanded 27% support in one recent poll, but he was trending downward. Röttgen had 16% and is enjoying a slight uptick. Laschet trails both, and the 21% of respondents checking “None of the Above” have added to the uncertainty. An obvious question is what each of the candidates stands for. But this is not easy to answer in such a boringly – and perhaps fortunately – centrist political system. The German far left and far right together can claim only around 20% in the polls. Most voters opt for the major parties (above all, the CDU), which operate like supermarkets, offering a little of something for everyone, with no surprises or disruptions. Throughout the first half of the twentieth century – from Kaiser Wilhelm II to the Führer – Germany was the most “interesting” country in the world. Internally, it was a political volcano, and a deadly threat to its neighborhood. Today, as a result of two catastrophic world wars, it is about as aggressive as a sloth, with its politics hovering between stable and staid. So , the CDU beauty contest is nothing like the rollercoaster of the Democratic Party’s presidential primary in the United States this year, where Senators Bernie Sanders of Vermont and Elizabeth Warren of Massachusetts pushed a hard-left course. Nor does Germany have a

Donald Trump on the scene. The country’s politics is “continuity über alles.” And so, Laschet is running on his experience as ministerpresident of the most populous of Germany’s 16 states – an advantage Merz and Röttgen lack. His unspoken message amounts to “four more years of Merkelism”: no sudden lurches in domestic or foreign policy. Meanwhile, Merz, who began his campaign holding up the right end of the CDU table (more Atlanticism and free-market economics), has been carefully balancing his cadences. He, too, wants “no rupture,” but he also believes that Germany has “slowed down too much.” So, let’s have it both ways. Röttgen, the youngest of the three, sounds like the boldest. Touting his credentials as a foreign-policy expert, he wants to be tougher on Russia and China than the other two. But take heart: under his leadership, there would be “neither total continuity, nor a break” with the Merkel era. Thus, stability will continue to be the name of the German game. There is no right-wing outlier like France’s Marine Le Pen or Italy’s Matteo Salvini, nor is there any radical leftist like Britain’s Jeremy Corbyn, the former leader of the Labour Party. Whereas the US and the United Kingdom essentially have two-party governments, Germany, like most of continental Europe, governs through multiparty coalitions that don’t swing radically to and fro with every election. In any case, whoever wins the CDU race in January and becomes chancellor in September will have to govern in tandem or even in a threesome. Buoyed by the pandemic, which has favored

the powers that be, the CDU and its Bavarian sister party, the Christian Social Union (CSU), will presumably secure around 35% of the vote. A bit to the left, the Greens may pick up around 20%, making them a natural coalition partner for the CDU/CSU. This balance-of-power arrangement promises continuity, which is not particularly exciting. We in the media might soon look back wistfully at Trump, who, for all his grating flaws, was the most entertaining leader of the twenty-first century. But in these troubled times – with COVID-19 not yet vanquished, and the economy still sinking – sluggish centrism is not the worst outcome for Europe’s anchor power. In addition to the three declared CDU contenders, there are two dark horses who, instead of going the conventional route – first chairman, then candidate chancellor – are playing a waiting game. Maybe the party will get bored with the trio of Laschet, Merz, and Röttgen, and will want somebody who is in the public eye daily. One is Minister of Health Jens Spahn, a hard-working politico who, thanks to COVID-19, is constantly in the news. The other is CSU leader Markus Söder, a man of burning ambition who tirelessly works the interview and talk-show circuit. But none of these five candidates would engineer a revolt against Mutti and her legacy. The next German chancellor, it is safe to predict, will be Merkel without the Angela. About the author Josef Joffe, a fellow at Stanford University’s Hoover Institution, serves on the editorial council of the German weekly Die Zeit.

MONDAY DECEMBER 14, 2020

Markets

MONDAY DECEMBER 14, 2020