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MONDAY FEBRUARY 1, 2021
BUSINESS24.COM.GH
MONDAY FEBRUARY 1, 2021
NO. B24 / 153 | NEWS FOR BUSINESS LEADERS
‘Economy vulnerable to portfolio outflows’ …as balance of payments worsens
Container shortage pushes freight rates through the roof By Patrick Paintsil p_paintsil@hotmail.com
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hanaian importers are now paying more than double the amount they paid for freight pre-Covid as a global shortage of shipping containers has drastically shot up the cost of moving goods from various parts of the world to Ghana’s ports, Business24 has gathered. Cont’d on page 3
Tullow forecasts 23% decline in 2021 production
Over the years, cocoa has remained a major foreign exchange earner
By Joshua Worlasi Amlanu macjosh1922@gmail.com
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hana’s economy remains vulnerable to foreign portfolio outflows, says Courage Kingsley Martey, Senior Economist with Databank Research, in an
assessment of the latest data on the country’s balance of payments (BoP) released by the central bank. According to the Bank of Ghana’s summary of economic and financial data published ahead of its policy rate announcement today,
Akufo-Addo reimposes Covid restrictions …following surge in cases
Cont’d on page 2
By Joshua Worlasi Amlanu macjosh1922@gmail.com
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ullow Oil has forecasted a decline in its share of production from the Jubilee and TEN fields by 22.7 percent this year. Cont’d on page 3 Follow us online: facebook.com/business24gh twitter.com/business24gh
By Eugene Davis ugendavis@gmail.com
the external sector suffered much from the impact of the coronavirus pandemic. The BoP contracted to a deficit of US$632.47m, equivalent to 0.95 percent of gross domestic product,
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Editorial / News
MONDAY FEBRUARY 1, 2021
Editorial
Beyond the restrictions, Mr. President
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hana’s fight against the Covid-19 pandemic last year received loads of plaudits especially as the number of active cases declined significantly. This achievement had led to a false hope that the battle has been won leading to a relaxation of some of the earlier imposed restrictions. But with the number of positive cases being recorded daily on average, it appears our celebrations may have come premature as we are now coming face to face with the virus proper. The President in his address to the nation last night revealed that restrictions on public
gathering has been reintroduced in a bid to curb transmission of the disease – after all, prevention is best. On the other hand, however, there is a dire need to boost the infrastructural capacities of our health institutions to handle the increased number of cases. Our history of “no bed syndrome” if we allow it to play out would cost the country a lot more deaths. This paper would like to call on the President to, as a matter of urgency, see to it that many more beds are made available to treat victims of Covid-19. Indeed, given how critical the situation can be, we have practically little time to act. As we have seen in other
jurisdictions, we can convert large public spaces into treatment or isolation centres. While we are at that, can we summon nurses or other relevant healthcare providers that may be awaiting government’s posting? The magnitude of what has befallen us require a comprehensive approach – time is of the essence. The President must move beyond the rhetoric. Our health care system is very fragile and if care is not taken, it may collapse and leave the entire country at risk. In the meantime, this paper will like to appeal to Ghanaians to observe the Covid-19 protocols. It is the least we can do for ourselves and loved ones.
‘Economy vulnerable to portfolio outflows’ Continued from cover
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at the end of 2020 from a surplus of US$1.34bn, equivalent to 2 percent of GDP, in 2019. This was largely due to the decrease in the capital and financial account balance to US$ 1.55bn (2.3 percent of GDP) in 2020 from US$3.07bn (4.6 percent of GDP) in 2019. “The first point to note is that the dynamics in the balance of payments show that Ghana is still vulnerable to foreign portfolio outflows, and this is an inherent risk built into the Ghana cedi. The situation requires continued vigilance and strict regulatory oversight over FX flows to avert volatile FX market conditions,” Mr. Martey said in an interview with Business24. “But the modest recovery in oil prices on the world market is good for oil export receipts and flows to the Ghana Petroleum Funds to beef up the reserves,” he added. Ghana’s trade surplus also reduced by 0.4 percentage points to 3 percent of GDP, while the current account deficit widened from 2.8 percent to 3 percent of GDP. Notwithstanding the current
Dr. Ernest Addison, BoG Governor
external situation and the effect on the forex market, the Governor of the Bank of Ghana, Dr. Ernest Addison, earlier this year was confident that the reserve levels, coupled with other measures to be implemented by the government in 2021, should see the local currency remaining stable throughout this year. The cedi, which depreciated by 3.8 percent against the dollar in 2020, outperformed many of its peers on the African continent. The cedi began 2020 trading at GH¢5.54 to a dollar and closed the year at GH¢ 5.76 to the US currency. As at Friday, January 29, the cedi was trading at GH¢5.76 to
a dollar. This year, the BoG plans to issue a total of US$775m through its biweekly forward foreign exchange auctions. Fitch Solutions, the international research firm, has forecasted a slower depreciation of the cedi to the dollar this year. It expects the cedi to lose just about 3.1 percent of its value against the dollar, largely due to expected recovery in the country’s exports on the back of higher international oil prices, improved cocoa exports and continued strength in gold shipments.
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Container shortage pushes freight rates through the roof Continued from cover Transporting a 20-footer container from the point of origin to the nation’s ports now costs the importer about US$6,000 from US$2,400 pre-Covid. Freight charge for a 40-footer container has more than doubled to between US$10,000 and US$13,000 from the previous rate of US$4,400. “It’s true that freight has gone up; it is a global increment, but it’s going to affect pricing of goods and, by extension, the consumer,” Samson Asaki Awingobit, President of the Importers and Exporters Association of Ghana, confirmed in an exclusive interview. “It’s not an acceptable cost, but it is one that has arisen out
of a situation, so what can we [importers] do?” he added. The scarcity of shipping boxes or containers has become a major threat to the shipping business,
with dire cost implications, specifically the sharp rise in freight rates. Freight charge, also known as freight rate, is the amount paid
to a carrier—either seaborne or airborne—for the transportation of goods from the point of origin to an agreed location. A number of importers have said the increase in freight rates has negatively impacted their capacity to import more goods into the country. It is also feared that a lot of them could go out of business should GRA Customs decide to use the new rates to calculate duties on imports. “The increase in freight has nothing to do with the quantity of goods in the container. Customs is aware of our situation, and they are still using the old rates,” Mr. Awingobit indicated. He was also emphatic that prices of goods will go up with or without an increase in duties considering the huge cost of freight that is being borne by importers.
Tullow forecasts 23% decline in 2021 production Continued from cover In the company’s recent trading and operational update, production from the two fields is forecast at 40,500 barrels of oil per day (bopd) in 2021, down from 52,400 bopd during 2020. The decline is expected to reduce Tullow’s average working interest oil production across its assets from 74,900 bopd in 2020 to 60-66,000 bopd in 2021. “This forecast reflects the drilling hiatus in 2020, a planned shut-down in September on Jubilee and deferred development drilling on Simba in Gabon,” the company said in the update. It said oil production from Jubilee and TEN for the year to date is in line with expectations, supported by gas offtake from the government of Ghana of 125 million standard cubic feet per day (mmscfd). The company is planning to commission a new oil offloading system on Jubilee, which is expected to be ready for a first lifting in February. Further, a drilling rig is being mobilised to Ghana to commence operations in the second quarter of the year,
and the first new production well on Jubilee is forecast to be onstream in the third quarter. “Despite the challenges that 2020 presented, Tullow delivered production in line with expectations, executed major reductions to its cost base and reduced net debt through the Uganda asset sale,” said Rahul Dhir, Chief Executive Officer, Tullow Oil Plc. “Tullow has a busy year ahead
as we begin implementing the business plan that we laid out at our Capital Markets Day. The plan is focused on ensuring that Tullow’s producing assets in West Africa reach their full potential. We will leverage the new plan and our reduced cost base to generate positive free cash flow at current commodity prices, drive down our net debt and deliver a robust balance sheet,” he added. He said the impact of Covid-19
had been managed effectively across the group, with a negligible impact on production. The company’s 2021 capital expenditure is forecast to be US$265m, with an additional US$100m to be spent on decommissioning. Tullow also disclosed that its completed restructuring will deliver sustainable annual cash savings of over US$125m.
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Wind, solar power cheaper than nuclear, IES insists By Benson AFFUL affulbenson@gmail.com
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he Institute for Energy Security (IES), an energy policy think tank, has said that generating electricity from wind and solar is more economical than nuclear, repeating its advice to the government to halt Ghana’s push for nuclear power generation. “The potential savings attained by generating a set quantity of electricity from renewables as a substitute for nuclear power are revealed as close to 288 percent for wind and utility-scale solar photovoltaic (PV). “Even without accounting for current subsidies, the cost of renewable energy has been shown to be considerably lower than the marginal cost of conventional energy technologies such as coal and nuclear,” the institute said in its latest analysis. The analysis did not even take into account potential social and environmental externalities or reliability-related considerations with the alternative energy options. The IES said its trend analysis
based on Lazard’s Levelized Cost of Energy (LCOE) between 2010 and 2019 show that new unsubsidised wind and solar power were cheaper than some already running resources like coal, nuclear, and some gas. It said the cost decline is rendering solar PV and wind increasingly attractive resources relative to conventional generation technologies with similar generation profiles. “The modelling shows that
solar power on its own can beat Gas Peaker plants on their own, without storage in any market,” the energy think tank said. It said while capital costs for a number of “alternative energy” generation technologies are currently in excess of some conventional generation technologies, declining costs for many alternative energy generation technologies, coupled with uncertain longterm fuel costs for conventional
Oil revenue drops by 30% in 2020 By Joshua Worlasi Amlanu macjosh1922@gmail.com
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hana’s crude oil revenue declined by 29.7 percent last year to US$666.38m, from US$947.67m in 2019, according to the latest semiannual report on the petroleum holding fund (PHF). The revenue comprised proceeds of crude oil exports by the Ghana National Petroleum Corporation (GNPC), corporate income tax receipts, surface rental income and interest accrued on the PHF. The significant fall in revenue reflected largely the impact of the global oil price crash since the outbreak of the Covid-19 pandemic. Before the pandemic, the government had projected crude oil revenue of US$1.57bn in 2020, but this was slashed to US$660.45m in the wake of the virus. Revenue from crude oil liftings from the Jubilee field fell
by 50.5 percent year-on-year, while revenue from liftings from the TEN field declined by 23.4 percent. Fitch Solutions, the international research firm, has described the near-term outlook for oil production in Ghana as subdued given the impact of the global oil price crash on the industry, which has caused major new projects to be
suspended. Further, technical challenges at both the Jubilee and TEN fields are expected to slow the short-term growth in oil output. Last week, Tullow Oil, which operates the two fields, announced that its share of gross production from the fields will average 40,500 barrels of oil per day (bopd) in 2021, down from 52,400 bopd in 2020.
generation technologies, are working to close formerly wide gaps in LCOE values. “Lazard’s unsubsidised LCOE analysis has shown significant historical cost declines for utility-scale ‘alternative energy’ generation technologies, driven by, among other factors, decreasing supply chain costs, improving technologies and increased competition,” the institute said. The IES insisted that it does not support the government’s move to switch the country’s energy base-load from Akosombo and Kpong hydropower to nuclear. It said the government is seeking to introduce nuclear into the country’s energy mix at a time when many countries around the world, including Germany, Spain, Portugal, Belgium, Greece, and Italy, have either shut down or are in the process of pulling the plugs off nuclear plants because of complicated relationships with nuclear power. “The institute sees the push for nuclear power as backward, given that times have changed to favour solar and wind energies, instead of nuclear power, based on economics, safety and security risks, and investment hurdles,” IES said.
For the longer-term outlook, Fitch said the country’s crude oil production remained positive, based on expectations of continued field developments, including development of the Pecan field which has a total expected production capacity of 110,000 barrels per day. Aker Energy, a Norwegian firm, operates the Pecan field with a 50 percent stake in partnership with Russia’s Lukoil (38 percent), GNPC (10 percent) and Fueltrade (2 percent).
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Full Text: Akufo-Addo’s 23rd update on measures taken against Covid-19 Fellow Ghanaians, I came into your homes, on 17th January, to give an account of our COVID-19 situation – a situation which, per available data at the time, was not good. To this end, I appealed to you, my fellow Ghanaians, to help contain the spread of the virus by respecting the protocols Government had put in place. The hope was that we would begin to see an improvement in our case count, as a result. Two weeks on from that address, the situation is even worse. As of Friday, 29th January, sixty-four (64) more people have, sadly, died, over the last two weeks, bringing the total number of confirmed deaths to four hundred and sixteen (416). Our hospitalization rates are increasing, with the number of critically and severely ill persons now at one hundred and seventytwo (172). Our hospitals have become full, and we have had to reactivate our isolation centres. Our average daily rates of infection now stand at seven hundred (700), compared to two hundred (200) two weeks ago. The total number of active cases has more than doubled, from a little over one thousand, nine hundred (1,900), two weeks ago, to five thousand, three hundred and fifty-eight (5,358) currently. When I delivered Update No. 22, thirteen (13) out of the sixteen (16) regions had recorded active cases; today, all sixteen (16) regions have active cases. Indeed, Greater Accra, Central, Western, Ashanti, Eastern, Upper East, Upper West, Volta, and Northern Regions are the hardest hit, accounting for ninety-four percent (94%) of the total number of active cases. In effect, fellow Ghanaians, we have a lot of work to do in coming to grips with the disease. Given that recent studies show that the UK and other new variants are being transmitted within the population, we should all understand that our current situation could get very dire if efforts are not made, both on the part of Government and by you, the citizenry, to help contain the virus. The analysis continues to tell us that the spread of the virus mostly occurs in indoor, confined spaces with poor ventilation,
where people are talking, singing, or shouting without their masks. The imposition of restrictions on our daily routines helped in reducing the prevalence of the pandemic in the country, and Government has been left with no option but to re-introduce some of these restrictions in order to help save the situation. I know these measures, in the recent past, were unpleasant, but, over a period, they resulted in a favourable situation for our country. We have to return to them. So, fellow Ghanaians,until further notice, funerals, weddings, concerts, theatrical performances, and parties are banned. Private burials, with no more than twenty-five (25) people, can take place, with the enforcement of the social distancing, hygiene and mask wearing protocols. Beaches, night clubs, cinemas, and pubs continue to be shut. Our borders by land and sea remain closed. All workplaces, public and private, must employ a shiftsystem for workers, in addition to the use of virtual platforms for business or work. Conferences and workshopscan take place with all the appropriate protocols. However, I encourage the use of virtual platforms for such engagements. Restaurants should provide take-away services, and should, as much as possible, avoid seated services. The National Sports Authority and the Ghana Football Association should ensure compliance with the twenty-five percent (25%) capacity rule in our stadia, with spectators respecting the social distancing rule and wearing of masks. To the revered leaders of our religious organisations, i.e. our churches and mosques, I entreat you to enforce, to the letter, the protocols relating to attendance, i.e. the two-hour duration, one-
metre social distancing, mask wearing, use of sanitizers, and the presence of veronica buckets, liquid soap, and rolls of tissue paper. I note that, since the re-opening of our schools, two weeks ago, we have witnessed only few reports of cases amongst students. I appeal to school authorities and teachers to enforce the guidelines provided by the Ghana Education Service, and I urge the Ghana Health Service to continue their surveillance at the schools, so we can contain any reported cases. As we step up public education and enforcement of the protocols on public gatherings, let me also state that regulatory agencies will undertake random checks to ensure conformity with these rules, and the security services will be tasked to enforce them. You do not have to be arrested by the Police before you wear your mask, your workplace should not be closed for nonconformitywith the protocols, if there is no urgent reason for you to be outside, please stay at home. Each one of us can help to contain the spread if we continue to practice the measures of social distancing, washing our hands with soap under running water, refraining from shaking hands, and, wearing our masks whenever we leave our homes. These measures must be respected by all. I urge you, my fellow Ghanaians, to continue to pay attention to your health, improve your fitness levels, and eat our local foods that boost your immunity. Should you at any point feel unwell, or exhibit the most common symptoms of COVID-19, such as fever, dry cough, tiredness, please report to the nearest health facility and get tested. COVID-19 tests are free for all Ghanaians at public health institutions. If a Ghanaian citizen
returns a positive result, the cost of care at isolation and treatment centres will be borne by Government. At the 58th Summit of the Authority of ECOWAS Heads of State and Government, held virtually, it was agreed that the cost of the COVID test for in-bound ECOWAS nationals be pegged at fifty United States dollars ($50) at the Kotoka International Airport. The cost of the test for nonECOWAS nationals still remains one hundred and fifty ($150) dollars. ECOWAS nationals and travelers, who test positive, will bear the cost of the mandatory isolation and treatment. Ghanaian nationals, however, who test positive, upon their arrival into the country, will have their isolation and treatment costs borne by the State. Fellow Ghanaians, in Update No. 21, I indicated that Ghana is set to procure her first consignment of the COVID vaccines within the first half of this year. Since then, a lot of work has been done towards the realisation of this. Our aim is to vaccinate the entire population, with an initial target of twenty million people. Through bilateral and multilateral means, we are hopeful that, by the end of June, a total of seventeen million, six hundred thousand (17.6 million) vaccine doses would have been procured for the Ghanaian people. The earliest vaccine will be in the country by March. The Food and Drugs Authority (FDA) will use its established processes for granting emergency-use-authorization for each vaccine in Ghana. As President of the Republic, I assure you that only vaccines that have been evaluated and declared as safe-for-use in Ghana will be administered. Government will continue to monitor our COVID-19 situation, and will remain resolvedin ensuring that we are able to return to normal daily routines. I remain hopeful that if each one of us embraces fully the safety protocols, and we continue to put our faith in the Almighty, we will emerge strongly from this pandemic. My faith in God tells me that this too shall pass! For the Battle is the Lords!! May God bless us all, and our homeland Ghana, and make her great and strong. I thank you for your attention.
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Be proud! Say it out loud! Your 60 seconds pitch is an opportunity -- embrace it with relish
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here are a multitude of reasons why people attend business networking events. But the millions who do it all over the world, week in, week out, do it with one intent: to grow their business! At BforB Networking Club meetings, we totally endorse that intent. But to us, business networking is about learning, supporting, educating, listening, understanding, and having a bit of fun while you’re doing it. Structured and organised, but with an informal feel to it is how we like to describe our meetings. What we don’t want is for anyone to feel nervous; intimidated, even. Networking should be enjoyed, which is why it is important there’s a fun factor to a meeting. But most importantly, networking is your opportunity to promote your business; and hopefully win business as a result of it. At a BforB meeting, everyone in the room is invited to standup, introduce themselves, and tell other members and guests what it is they do, and the kind of referrals that would be helpful to them – it could be, for instance, that you are looking for a lead into a particular industry, or for an introduction to a managing, or financial, director. Which means that the 60
seconds opportunity you have is so important. Opportunity knocks. But you would be surprised at how many people feel nervous or intimidated by it. But don’t be. It’s your opportunity to announce yourself. Embrace it; who knows what might materialise from a one-minute pitch. First of all, be confident and proud of who you are, and who you represent. Tell the room your name, and your company. Then say clearly what it is you do and offer, and how that may be of use not just to others in the room, but also to people they know, and do business with themselves. Indeed, the important point you are making, is how your business, and the services you offer, can be of help to others. For instance, you’re an accountant – but you specialise in tax, and how to avoid paying too much: you’ve caught our attention! Or you’re a social media specialist who can help you raise your profile online, and generate more leads because of it; again, you would be catching the attention of the room, because many openly admit social media is a chore! If you can, give out some useful advice.
If you’re an HR specialist, you might want to tell the room, for example, about a new Government workplace directive that has just been announced, and invite them to speak to you about it after the meeting if they’d like any further advice. Most of us employ staff, and I’m sure we would be interested in picking your brain for more information. If you’re a Public Relations consultant, perhaps give a topical example of someone, or something, in the news that has been a PR hit or miss. And round off your 60 seconds by repeating who you are, and what you do. If you have a catchy strapline, use that: you would be surprised how many people would remember that! Networking is to be enjoyed, not feared. If you don’t shout about yourself, no one else will, so go for it, grab the opportunity, and make people want to do business with you, or at least feel confident enough to take a few of your business cards and hand them out for you. Ultimately, you’re networking because you want to grow your business. At BforB nothing gives us greater satisfaction than helping you do it! Authored by: BforB Ghana | Networking Clubs
Business for Breakfast (BforB) is internationally recognised for creating successful networking meetings, events and training for referral marketing. Our global offices are in Australia, Germany, Czech Republic, Spain, Slovakia, Ghana and headquartered in UK. We create an environment where 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 Contact us: 059 4 016 432 | info@bforbgh.com | Facebook & LinkedIn: @bforbghana | www. bforb.co.uk
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Showmax launches 3 for 1 special offer in Ghana
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treaming service Showmax has announced a new offer to subscribers across the continent. From 21 January until 31 March 2021, customers who take up the Showmax 3 for 1 deal will pay for a one-month subscription and receive an additional two months. The offer is available across all packages including Showmax, Showmax Mobile, Showmax Pro and Showmax Pro Mobile. Showmax Pro subscribers have access to everything on Showmax as well as live sport from SuperSport including Premier League, Serie A, La Liga, and DStv Premiership games. Key matches coming up include Tottenham Hotspur vs Liverpool on 28 January and Orlando Pirates vs Kaizer Chiefs on 30 January. Speaking about the deal, Cecil Sunkwa Mills, Managing Director, MultiChoice Ghana, said, “These are challenging times, people are spending more time at home and we are thrilled to offer all our Showmax subscribers’ extra value as 2021 kicks off. We’ve got an incredible line-up of Showmax Originals coming up in the next few months, including Ghanaian, Kenyan and Nigerian Originals that we are excited to share.”
Showmax Originals launching this year include I Am LAYCON, Showmax’s first Nigerian Original, a reality series about the most recent Big Brother Naija winner; the first Showmax Kenyan Original, crime procedural Crime & Justice; the long-awaited second season of SAFTA Best Comedy winner Tali’s Wedding Diary; the small-town psychological thriller DAM; the neo-noir murder mystery Skemerdans; and The Real Housewives of Durban,
which premieres on 29 January 2021. Showmax will continue to bring the best of HBO and international series to Africa first. This includes HBO’s gripping two-part documentary Tiger, which traces the legendary golfer’s incredible journey; HBO’s Raised by Wolves, made by four-time Oscar nominee Ridley Scott (Alien, The Martian, Prometheus), filmed in Cape Town and already up for 2021 Critics’ Choice Super Awards
for Best Science-Fiction Fantasy Series; and 2021 Critics Choice nominees like Fargo, I May Destroy You, Insecure, Lovecraft Country, PEN15, Ramy, The Good Lord Bird, The Undoing and What We Do In The Shadows. All Ghanaian subscribers have access to 24/7 livestreams five Ghanaian Free To Air channels including TV3, Adom TV, Utv, GTV and GHOne TV. The deal is available at www. showmax.com/eng/welcome
Akufo-Addo reimposes Covid restrictions Continued from cover
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resident Nana AkufoAddo has directed the reintroduction of a set of restrictions in public gatherings following a recent surge in Covid-19 cases, The President speaking in his latest installment of measures taken to address the effects of the pandemic stated that eth measures have become necessary due to a complete disregard for the protocols – allowing the virus room to fester. He warned that anyone found
breaking the new directives will be severely dealt with. “Until further notice, funerals, weddings, concerts, theatrical performance and parties are banned. Private burials with not more than 25 people can take place with the enforcement of the social distancing, hygiene and mask-wearing protocols. Beaches, nightclubs, cinemas and pubs continue to be shut. Our borders by land and sea remain closed. All workplaces, public and private must implore a shift system for workers in addition to the use of virtual platforms for
business or work.” “Conferences and workshops can take place with all the appropriate protocols however I encourage the use of virtual platforms for such engagements. Restaurants should provide takeaway services and should as much as possible avoid seated services. The National Sports Authority and the Ghana Football Association should ensure compliance with the 25% capacity rule with spectators respecting the social distancing rule and wearing of the mask,” he said.
According to the Ghana Health Service, Ghana’s current active case count is in excess of 5,000 with at an average of 700 persons testing positive daily. President Akufo-Addo first introduced such Coronavirusinduced restrictions in Ghana on March 15, 2020, in response to the surge in cases at the time. At the time, Ghana had recorded six cases. The President in that broadcast gave a caveat that private burials were permitted with mourners present not exceeding 25. GMA threat The General Secretary of the Ghana Medical Association (GMA) has threatened to embark on a strike should government fail to impose restrictions on social gatherings as the surge in active Covid-19 cases persist. Dr Justice Yankson on Saturday stressed that already health facilities are “on their knees” – calling for rigorous measures need to be implemented in order to curb the spike of the pandemic.demic.
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Procrastination affects 45% of adults - the solution lies in gaming
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rocrastination? There’s an app for that. Procrastination affects 45% of adults at some point in their lives and a quarter of adults describe themselves as procrastinators. One study estimated that procrastinating employees wasted a quarter of their working days, at a loss of $10,000 (R165,000) per year per employee. What if the same technology that enables cyberslacking at work – scrolling through social media, browsing online stores, playing smartphone games – could also offer the solution to costly procrastination? Sam Orton, University of Stellenbosch Business School (USB) MBA student, researched whether the design and technology that get people hooked on online games could also turn beating procrastination into a game, with a winning outcome for both employees and employers. The answer came via “gamification”, the use of game design elements like avatars, scores, leaderboards and virtual rewards in non-game contexts such as apps for learning a skill or tracking one’s exercise – or, in this case, a gamified smartphone app targeted at boosting productivity. Gamification can contribute to the motivation that helps procrastinators overcome their work-delaying tactics, could also help those working from home in the “new normal” of Covid-19 to set goals, manage their time and feel more connected to work amid household distractions. Workplace procrastination and delays in getting the job done come at a cost for businesses in lost productivity and underperforming employees, and a cost to individuals in increased stress and anxiety, lowered selfconfidence, a negative reputation at work and, ultimately, reduced employability and earning
potential. “Procrastination is the thief of time, time is money, time waits for nobody – procrastinators have heard them all and still continue to put off getting things done, even though they know there will be negative consequences. “They struggle to gain control over their procrastinating even though they know it is irrational, and they generally mean no harm to themselves or their employer or client by it. That was the reason for exploring the relationship between gamification and procrastination, to see if it would be a useful tool in helping people to overcome the problem,” he said. Very little research has been done on the effectiveness of interventions to reduce workplace procrastination, which are mostly based on traditional methods like cognitive behaviour therapy, with a focus on learning tactics for time management and goal setting. The growing use of computerbased therapy in mental health, and promising results seen in the use of gamification in psychotherapy, along with the growing popularity of smartphones as gaming devices and their widespread accessibility, made exploring a gamified smartphone app as an intervention for procrastination a “logical next step”, Orton said. Explaining the reason for applying game design and principles to a work-related problem, he said: “When people play games and have fun, their emotional and motivational engagement is plain to see. When people play games, they experience enjoyment, competence, mastery, engagement and flow – all elements of intrinsic motivation in human behaviour. The fundamental concept of gamification is to use this motivational ability of games for reasons other than entertainment, such as in learning
a workplace skill or tracking progress of tasks. “The way that games motivate participation and reward achievement of goals, as well as the instant and continuous feedback on performance, satisfies some of the basic psychological needs of employees in the workplace – autonomy, competence, social interaction and a feeling of belonging – and thereby increases their motivation to get things done and overcome procrastination.” Orton, who manages a shopping mall in Worcester, enlisted 12 retail store managers, who had scored highest on a survey of procrastination tendencies, to install a gamified task management app called Habitica on their smartphones and record their experiences over four weeks. The app included game elements like avatars, leaderboards, experience and skill points to be earned, levelling up and earning achievements and rewards, the ability to customise avatars and choose difficulty and rewards, as well as social elements in chatrooms and joining team challenges to reach collective goals. Participants entered their realworld work tasks into the app, creating goals to be achieved in the “game”. “Turning boring, mundane, or unpleasant tasks into motivating and exciting goals in the game can reduce task aversiveness – an identified procrastination factor,” Orton said. At the end of the four weeks, the participants reported that using the app had helped them to break their work down into manageable tasks, to prioritise tasks better and that the prospect of earning more points in the game helped motivate them to get difficult or unpleasant tasks done earlier in the day, and to start their next task sooner, making them feel more competent, confident, and
less overwhelmed. Nine of the 12 participants planned to continue using a gamified app to manage their work, be more productive and reduce procrastination, finding that using personalisation and customisation options in the app gave them more control over their own work and daily routine in jobs that don’t usually allow much flexibility. Orton said the study, albeit with a small sample, had shown that the gaming elements that give people a sense of autonomy, competence and relatedness bolster employees’ internal motivation and in turn reduce procrastination, making work more enjoyable and people more effective. “The study illustrates the potential for companies to improve productivity by introducing gamification in the workplace and identifies which game elements to consider when designing a gamified app for the workplace. The research also analysed the users’ experiences and perspectives of gamification – this understanding is critical in ensuring that an app actually meets users’ needs and is something they want to use,” Orton said. He warned though, that for organisations wanting to apply gamification strategies, “it can’t be superficial or just another thing to do”. “Implementation must be monitored, so the company can really understand where it stands and how people are responding. If it works, it can definitely make a difference between success and failure for individuals and companies.” CONTACT DETAILS Dr Marietjie van der Merwe USB Representative Marie@ globalnatives.com +230 606 2341 / +230 5 701 1362
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Global Policy Responses to Capital Flow Volatility
By Annamaria De Crescenzio, Annamaria Kokenyne, Dennis Reinhart, and Julia Schmidt
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he COVID-19 health and economic crisis has once again focused attention on the fickleness of capital flows and the need to have an adequate policy toolkit to manage the risks that stem from these flows, while maximizing their benefits. A virtual workshop organized by the Bank of England, Banque de France, International Monetary Fund and the Organization for Economic Co-operation and Development (OECD) highlighted risks emerging from the changing landscape of global capital flows and the need for greater international efforts to address these including by broadening the regulatory perimeter. The nexus between the global financial cycle and extreme capital flow episodes, as well as currency crises, is here to stay. Capital flows COVID-19 crisis
during
the
Compared to previous episodes of financial stress, the sudden stop in portfolio flows to emerging markets in response to the COVID-19 pandemic appears to be particularly pronounced. Record capital outflows led to depreciating exchange rates, higher funding costs and limited access to external financing in many emerging markets. Advanced economies, including some euro area economies and Japan, also experienced significant non-resident sales of portfolio assets in March 2020. The outflow of portfolio capital in emerging and advanced markets was sharp but short-lived. It was cushioned by significant
central bank actions including continued monetary easing which was accompanied by large-scale asset purchase programs and increased liquidity operations in advanced economies, as well as foreign exchange interventions in emerging markets. While banking inflows slowed sharply, the decline was lower than during the global financial crisis in 2008, reflecting the resilience of a better-capitalized global banking sector and the release of counter-cyclical capital buffers by regulators. The decline in foreign direct investment flows, on the other hand, was even more pronounced than during the global financial crisis, reflecting growth concerns in emerging markets. The new geography of capital flows The 2008 global financial crisis was a watershed event that exposed the weaknesses and excessive risk-taking in the global financial system, in particular by banks, and led to major regulatory reforms increasing the resilience of the banking systems. The increased use of offshore financial centers to channel cross-border flows, including by multinational banking groups following greater regulation of the banking sector since the global financial crisis, highlights the importance of continued international efforts to end tax avoidance and evasion, and to broaden the regulatory perimeter. To facilitate recovery, major central banks have maintained an accommodative monetary policy stance since the global financial crisis. Low U.S. interest rates have led to greater risktaking by global banks, as they lend more to riskier borrowers in
emerging markets and advanced economies. There has been a steady build-up of corporate and sovereign debt in emerging markets and several advanced economies are witnessing housing price appreciation from substantial capital inflows. While this poses policy challenges, there is evidence that certain supervisory powers can materially dampen this risktaking. That is, micro-prudential tools can have systemic effects and are important complements to macroprudential policy in strengthening financial stability. Global Financial Cycle and Policy Responses The nexus between the global financial cycle and extreme capital flow episodes (sudden stops, flights, retrenchments, and surges), as well as currency crises, is here to stay. A capital flows-at-risk framework can help policymakers better understand tail events in capital flows in order to take early action to mitigate the risks. Such a framework can be informative about the risks posed by different types of capital flows, shedding light on the way they are intermediated and on the effectiveness of policy responses. Policymakers are increasingly relying on multiple policy instruments to deal with capital flow volatility. These include monetary policy, macroprudential policies, foreign exchange interventions, and capital flows management measures. The question of which policies—or combination of policies—are most effective in mitigating the risks of sharp capital flow movements generated by global shocks, and the near- versus medium-term trade-offs of different policies,
is an important one, and this is part of the IMF agenda on the Integrated Policy Framework. The global nature of recent crises highlights the desirability of a coordinated international response to mitigate the effects of cross-border spillovers, as well as the need to address the risks posed by economic agents that are outside the regulatory perimeter, in particular nonbank financial intermediaries. Recent multilateral initiatives such as the swap lines between the U.S. Federal Reserve and some foreign central banks, the enhanced IMF lending facilities, efforts to coordinate regulatory responses including on nonbank financial institutions under the umbrella of the Financial Stability Board and the G20 Debt Service Suspension Initiative for the poorest countries are helping mitigate risks. Discussions on the challenges of capital flows in international fora, such as the G20 International Financial Architecture Working Group, the Advisory Task Force on the OECD Codes in relation to the OECD’s Capital Movements Code, and the IMF in relation to its institutional view on capital flows can facilitate the design of appropriate policy responses. The full list of authors: Annamaria Kokenyne, Gurnain Pasricha (IMF) Annamaria De Crescensio, Etienne Lepers (OECD) Dennis Reinhart, Ambrogio Cesa-Bianchi, Mark Joy (Bank of England) Julia Schmidt (Banque de France) The views expressed are those of the authors and do not necessarily represent the views of the corresponding institutions.
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Prevent the next food crisis now
By Mark Lowcock & Axel Van Trotsenburg
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he toxic cocktail of climate change, conflict, and COVID-19 is making itself felt most intensely in the world’s poorest and most vulnerable countries. As a result, a record 235 million people worldwide will need humanitarian assistance and protection in 2021 – an increase of 40% from last year. It can be hard to wrap one’s head around such numbers. But behind the statistics are individual human lives. For the most vulnerable people, the pandemic’s secondary effects – not the coronavirus itself – will cause the most damage. And the hunger pandemic triggered by COVID-19 threatens to be the biggest killer. The number of chronically hungry people increased by an estimated 130 million last year, to more than 800 million – about eight times the total number of COVID-19 cases to date. Countries affected by conflict and climate change are particularly vulnerable to food insecurity. Empty stomachs can stunt whole generations. Moreover, the specter of multiple famines looms just as government budgets are being stretched by efforts to protect populations and economies from the pandemic. International solidarity to help prevent such
disasters may look like a hard sell just now. But preventing famine and food insecurity is a smart investment for everyone. Still, we must ensure that we are getting the most from every dollar we spend. That is why the United Nations and the World Bank are increasingly investing in an anticipatory approach to humanitarian need. It has become ever clearer that acting early to address humanitarian needs ahead of a crisis is more effective, dignified, and cost-efficient than waiting until disaster has struck. Such a strategy also protects hard-won development gains. For example, in Bangladesh last year, the United Nations and the Red Cross/Red Crescent provided vulnerable people with cash so that they could get themselves and their livestock out of harm’s way before devastating floods hit. This effort cost half as much as picking up the pieces afterward would have done, and it helped more people. We are applying a similar anticipatory approach to the growing hunger pandemic, by taking action before food emergencies turn into fullblown famines. This involves addressing long-term drivers of food insecurity – including vulnerability to extreme weather and pests, low incomes, fragile value chains, and conflict – in order to prevent new crises down the road.
In line with this goal, the International Development Association (IDA, the World Bank’s fund for the poorest countries) committed $5.3 billion for food security in the six months between April and October 2020. This sum comprised a mix of short-term COVID-19 responses and investments to address the longer-term causes of food insecurity. In Bangladesh, the World Bank redirected resources from an existing project to provide, among other things, cash transfers to 620,000 vulnerable small-scale dairy and poultryfarming households. In Haiti, where remittances were expected to decrease as a result of the pandemic, the IDA provided farmers with seeds and fertilizer to safeguard future harvests, and supported small irrigation works that increase long-term resilience. The IDA has also extended its Crisis Response Window to include $500 million in financing dedicated to responding during the early stages of slow-onset food-security crises and disease outbreaks. Likewise, in June 2020, the UN’s Central Emergency Response Fund provided financing to help avert a food crisis in Somalia. Acting ahead of the triple threat of locusts, floods, and COVID-19 reduced the risk of disease outbreaks. By upgrading boreholes early,
the UN averted disputes related to water sources, kept livestock healthier, improved household finances, boosted mental health, and prevented large-scale population displacement. The development of effective COVID-19 vaccines means that the world may soon start to see the light at the end of the pandemic tunnel. But for many of the most vulnerable countries, the crisis will have deep and long-lasting after-effects – on incomes, health, nutrition, education, and whole economies. Swift action can make the hangover less painful. We need to focus today on monitoring risks and the factors that compound them, and emphasize effective early action and long-term investment to avoid much larger costs in the future. Acting now on the danger signals is the smart, moral, and cost-effective strategy. By working together to save and transform lives, we can free the world’s most vulnerable people from crippling hunger and insecurity and build the foundations of a better future for all. About the authors Mark Lowcock is UN UnderSecretary-General for Humanitarian Affairs and Axel van Trotsenburg is Managing Director of Operations at the World Bank.
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