Business24 Newspaper 23rd December, 2020 by Business24 Online

THEBUSINESS24ONLINE.NET

WEDNESDAY DECEMBER 23, 2020

NO. B24 / 143 | NEWS FOR BUSINESS LEADERS

Gov’t issues new guidelines for trading of its securities

WEDNESDAY DECEMBER 23, 2020

Nigeria warned: ‘no trade bullying under AfCFTA’ By Patrick Paintsil p_paintsil@hotmail.com

ormer Deputy Minister of Trade and Industry Carlos Ahenkorah has criticised Nigeria’s “bullying attitude” that led to the closure of its land borders from August last year to December this year, and has indicated that such incidents will not be condoned under the African Continental Free Trade Area (AfCFTA) regime. Cont’d on page 3

New insurance law targets enhanced penetration

By Eugene Davis ugendavis@gmail.com

Ken Ofori-Atta, Finance Minister

By Joshua Worlasi Amlanu macjosh1922@gmail.com

overnment has made major changes in the trading of its securities by streamlining engagements with investors as a way of further developing the primary

and secondary bond markets. This forms part of broader efforts to develop a well-structured and wellfunctioning money market, with a keen focus on building on the joint book-runners ( JBRs) system for issuing government bonds.

ECONOMIC INDICATORS EXCHANGE RATE (INT. RATE)

The changes have been made through the issuance of new guidelines to the securities market that replace the JBRs with bond market specialists (BMS) in the auction of government notes and bonds. Cont’d on page 2 INTERNATIONAL MARKET

USD$1 =GHC 5.7027

BRENT CRUDE $/BARREL

POLICY RATE

14.5%

NATURAL GAS $/MILLION BTUS

GHANA REFERENCE RATE

15.12%

GOLD $/TROY OUNCE

OVERALL FISCAL DEFICIT

11.4% OF GDP

PROJECTED GDP GROWTH RATE AVERAGE PETROL & DIESEL PRICE:

0.9% GHC 5.13

he new insurance law, passed by Parliament on Monday, will ensure that the insurance industry is regulated in accordance with international standards to make it globally competitive, says a parliamentary report on the bill.

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

Cont’d on page 3 Follow us online:

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

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Editorial / News

WEDNESDAY DECEMBER 23, 2020

Editorial

AfCFTA needs everyone

ome January 1, 2021, the much-talked-about African Continental Free Trade Area (AfCFTA) takes off after its initial launch date was derailed by the Covid-19 pandemic. The journey to creating what would be the largest free trade area in the world has been long in coming. After the huge paperwork and preparations over the years, the landmark agreement kicks off in a matter of weeks. While there is no denying what a successful AfCFTA would do for the continent, it is pertinent to point out that the success would have to deliberately engineered – it will not come by accident. Every country needs to commit to making the free trade area work. It is in this light that

this paper backs the calls made a former Deputy Minister of Trade and Industry Carlos Ahenkorah that the continent’s superpowers must act responsibly to ensure the success of the free trade area. He specifically mentioned Nigeria’s “bullying attitude” that led to the closure of its land borders from August last year to December this year and indicated that such incidents will not be condoned under the AfCFTA regime. According to him, Nigeria closed its borders to flex its muscles as the regional superpower, adding that this was made possible by some loopholes in the Ecowas Trade Liberalisation Scheme (ETLS). “The ECOWAS protocols were couched in a gentleman’s agreement by the heads of

state, and there were no dispute resolution mechanisms within that framework; but the AfCFTA has corrected this mistake,” he said. The former minister’s views were supported by the chief executive of the Private Enterprise Federation (PEF), Nana Osei Bonsu, who opined that key conflict resolution mechanisms embedded in the AfCFTA protocols will curtail such trade injustice. This paper believes strongly that every country on the continent has a role to play in the push towards the AfCFTA common goal. Nigeria and other bigger economies must know that they need the smaller economies just as the smaller economies need them.

Gov’t issues new guidelines for trading of its securities Continued from cover The BMSs are institutions authorised by the Ministry of Finance and the Bank of Ghana to participate in the book-building auction of government notes and bonds. The book-building method is intended to diversify the existing resident and nonresident investor base, seeking out new investors and extending the geographical reach of government in raising funds. The bond market specialists have been appointed from among primary dealers and licensed investment dealers to conduct government’s bond market operations. The reform is expected to help improve the efficiency and transparency of the Ghana Fixed Income Market (GFIM). The bond market continues to grow strongly, with November the third month in 2020 to trade bonds in excess of 10bn in volumes. Cumulatively, from January to November, volumes

Dr. Ernest Addison, Governor, Bank of Ghana

traded on the GFIM was 95.06bn, representing an increase of 91.4 percent over the volumes of trades made in the same period of 2019 and 71.1 percent more than total trades in the whole of 2019. The BMSs are expected to achieve and maintain a market presence sufficient to earn them an appropriate share of secondary market turnover. Further to this, the BMSs are expected to maintain a minimum secondary market share of not less than five percent, as measured on a six-month rolling average.

“The erstwhile primary dealers in good standing will continue to be the exclusive counterparts of government in the auction of only Treasury bills, while the BMS shall conduct the issuance of securities with tenor of two years and above,” the Ministry of Finance said in the new guidelines. “All dealers will be required to comply with primary market requirements and responsibilities, conducts and obligations and notices as may be determined by government,” it added.

WEDNESDAY DECEMBER 23, 2020

Nigeria warned: ‘no trade bullying under AfCFTA’ Continued from cover Mr. Ahenkorah empathised with Nigeria over its concern to safeguard its market and people, but disagreed with the option to close its borders to trade. “I still challenge the rationale for Nigeria to close its borders,” he stated on a live interactive programme, adding that, “they see themselves as big brothers of West Africa and can decide to do what they want to do.” According to him, Nigeria closed its borders to flex its muscles as the regional superpower, adding that this was made possible by some loopholes in the Ecowas Trade Liberalisation Scheme (ETLS). “The ECOWAS protocols were couched in a gentleman’s agreement by the heads of state, and there were no dispute resolution mechanisms within that framework; but the AfCFTA has corrected this mistake,” he said. The former minister’s views were supported by the chief executive of the Private Enterprise Federation (PEF), Nana Osei Bonsu, who opined that key

Former Deputy Minister of Trade and Industry, and the MP for Tema West, Carlos Ahenkorah (right), and CEO of the Private Enterprise Federation, Nana Osei Bonsu (left).

conflict resolution mechanisms embedded in the AfCFTA protocols will curtail such trade injustice. “There are mechanisms that will allow businesses to report foul behaviour. In ECOWAS, Nigeria is the biggest player, so they bully; but in the continental free market, we have other competitive big players who have participated in the global village for a period and you can’t bully

them,” he said, citing countries like Tunisia, Morocco, Egypt, South Africa and Kenya. Nigeria closed its land borders in August 2019, arguing it was a safeguard measure to eliminate an alarming spate of smuggling which undermined both local production capacity and internal revenue mobilisation. The decision however had a negative impact on the country’s traders, who are now demanding

compensation from the government, according to Dr. Ken Ukaoha, president of the National Association of Nigerian Traders (NANT). “We have even sent a memo in this regard. We are asking for compensation, especially for those who have been doing legitimate businesses across the borders,” said Dr. Ukaoha on the programme.

New insurance law targets enhanced penetration Continued from cover The report by Parliament’s Finance Committee said the law

seeks to increase the insurance penetration rate in Ghana by developing a stringent regulatory framework to protect customers

Dr. Mark Assibey-Yeboah, MP New Juaben South and chairman of Parliament’s Finance Committee

and prevent the collapse of the industry. The law replaces the Insurance Act 2006, which until now has

governed the industry. Dr. Mark Assibey-Yeboah, chairman of the Finance Committee, said for any country to achieve a significant level of economic development, there is the need for it to develop a vibrant and adequately capitalised insurance industry. The law incorporates provisions which enhance the capacity of insurance companies to comply with international best practices, and also introduces risk-based supervisory requirements. Over 30 percent of Ghanaians currently have one form of insurance or another, excluding pensions and health insurance. The new law reflects government’s efforts to grow the industry by strengthening corporate governance and increasing insurance accessibility for the poor and informally employed.

WEDNESDAY DECEMBER 23, 2020

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News

WEDNESDAY DECEMBER 23, 2020

BoG to unwind countercyclical measures in financial sector – Governor

r Ernest Addison, Governor of the Bank of Ghana has hinted of plans to undo all countercyclical measures implemented in the financial sector due to the COVID-19 pandemic to allow for the proper functioning of the system. He has, therefore, charged banks to remain vigilant, upgrade staff capabilities and improve the governance and risk culture to avert any shocks and maintain the vibrancy of the sector. “Over the next three years, in the aftermath of the pandemic, the Bank of Ghana will carefully unwind the countercyclical measures implemented and allow the financial system to function without the regulatory forbearance put into place due to the pandemic,” he said. Speaking at this year’s University of Ghana Alumni lecture series, Dr Addison said the financial sector required a constant regulatory and policy attention to identify and mitigate emerging risks and to ensure financial stability. He said the economic impact of the pandemic may result in higher non-performing loans and some capital erosion of banks, adding that the Central Bank was putting greater focus on identifying the early

Dr. Ernest Addison, Governor

warning signals and initiating prompt corrective actions. “The symptoms of a weaker bank are usually poor asset quality, lack of profitability, loss of capital, excessive leverage, excessive risk exposure, and poor governance conduct as well as liquidity concerns. “In this respect, the Bank of Ghana will continue to strengthen all the regulatory measures implemented over the last three and half years to maintain confidence and safeguard financial stability,” Dr Addison said. He said the Central Bank was optimistic that with thE approach, a resilient and capable financial sector would weather the storms brought about by the pandemic and

ensure the soundness of the industry. Government, before the pandemic, initiated and implemented policies including the National Financial Inclusion and Development Strategy, the Digital Financial Services Policy, and the CashLite Roadmap, with an overall objective of deepening financial inclusion and accelerating the shift to digital payments in the country. Dr Addison noted that the momentous progress made in this area had significantly helped in the fight against the pandemic with an exponential growth in the volumes and values of the digital payment platforms in the country. “Promoting financial

technology had already been at the forefront of the Bank of Ghana’s agenda and we will continue to invest in the supportive infrastructure, improve on the regulatory environment, as well as contain all the associated risks to help achieve financial inclusiveness and digital financial transactions to support the national objective,” the Governor assured. On the impact of the pandemic on the Ghanaian economy, Dr Addison explained that the Covid-19 external shock had partly reversed the progress made on the macroeconomic stability front. He said so far, the fiscal costs, in terms of stimulus package deployed to moderate the adverse socio-economic consequences on households and businesses, was estimated at over GH¢11.2 billion. “If you add the financial sector costs and the energy sector costs raises the estimate of the financial burden from these three sources alone to GH¢24 billion. “As of half a year, it was estimated that the government paid GH¢4.7 billion in excess capacity payments in the energy sector. This has pushed the debt/GDP ratio above the threshold for the Market Access Countries,” he said.

Emirates earns five-star rating from its customers

mirates has received the APEX 2021 Five Star Global Official Airline Rating, based on feedback from passengers that was independently collected by APEX via its partnership with TripIt, and validated and certified by an external auditor to ensure that all ratings were made by genuine travellers who had flown on the airline they were reviewing. Adel Al Redha, Emirates’ Chief Operating Officer said: “We are delighted to receive this recognition from our customers. It reflects all of our efforts to provide our customers with a safe and enjoyable flight experience. He added: “In the past months, Emirates has constantly reviewed and proactively adapted our products and services to comply with regulatory protocols, and we’ve also kept our eye on

innovation. In line with our strategy and our leaders’ vision, Emirates continues to invest in enhancing our customer proposition and product. In recent months, we’ve brought to market several innovative services to offer our customers even more confidence,

comfort and convenience, and seamless travel. These were not simply a response to the pandemic, but also part of our DNA and long-term strategy to earn our customers’ trust and loyalty, and maintain our lead in the industry. “With independently verified

passengers serving as the final judges, Emirates continues to set the highest echelon bar of airline experience by winning the APEX Official Airline Ratings™ Global Five Star rating every single year without fail,” APEX CEO Dr. Joe Leader stated.

WEDNESDAY DECEMBER 23, 2020

News

WEDNESDAY DECEMBER 23, 2020

Guinness Ghana’s financials reveal large related party payments By Nii Annerquaye Abbey

s Ghana ponders over measures to plug the more than US$800 million loss in revenues in the first half of this year alone due to the Covid-19 lockdown that initially brought almost all economic activity to a standstill, tax justice advocates are calling on the government to adopt stricter measures to deal with incidents of tax avoidance. According to the Tax Justice Network (TJN) in its State of Tax Justice 2020 report, governments around the world lose nearly US$245 billion a year in direct tax revenue to multinational corporations (MNCs) shifting profit into tax havens in order to underreport how much profit they actually made in the countries where they do business and consequently pay less tax than they should. A Norway-based Anticorruption resource 2014 report, argued that enhanced tax revenue can help governments finance development and decrease reliance on foreign aid while taxmotivated illicit financial flows – tax evasion, tax avoidance and aggressive tax planning – undermine these efforts. While tax evasion is illegal and punishable by law, tax avoidance uses legal methods to minimize the amount of income tax owed by an individual or a business – the two all contribute to loss of revenue. Multinationals are often cited for indulging in base erosion, profit shifting, among others, which though not illegal, contribute to massive revenue loss for governments. A 2015 Oxfam International report stated pervasive tax avoidance schemes common with multinationals and wealthy individuals deprive all governments of much-needed resources to finance essential services, especially in developing countries. Tax avoidance, the International Development Policy explains, are practices that typically entail MNCs ‘taking advantage of the technicalities of a tax system or of mismatches between two or more tax systems for the purpose of reducing tax liability,’ the report further explains.

companies, Diageo, was used as a case study to ascertain some of the possible means tax avoidance could arise. GGBL’s parent company is Diageo, one of the world’s largest drinks companies, which is based in the UK and has a history of disputes with tax authorities in different countries. Analysis conducted by Business24 on GGBL, which is listed on the Ghana Stock Exchange shows that over the past five years (2015-2019), it generated nearly GH¢3bn (appr. US$520million) in revenues to cement its position as the leading total beverage company in Ghana. Despite its annual revenues growing by more than 56 percent over the period, the company has not always been profitable. It made losses in 2015 and 2016. Last year, the company recorded a profit before tax of GH¢32.5m, down from GH¢35.4m in 2018; GH¢11.7m in 2017. GGBL’s publicly available financials indicate that it paid a total of GH¢14m as corporate income tax over the five-year period. According to the OECD, some of the common tax avoidance methods MNCs deploy include payments to parent companies for services parent companies rendered to their subsidiaries. In the case of GGBL, a total of GH¢232m was paid in royalties, technical services fees and interest payments over the five years to overseas companies also owned by Diageo, of which GH¢79.6m was technical fees and royalties and the rest was the borrowing costs of a loan to GGBL. Guinness Ghana also paid a sum of GH¢166m as “human resource and project costs” to member companies of the Diageo group within the period.

Case study

Related party deals

In this story, the financials of Guinness Ghana Breweries Limited (GGBL), the largest brewery in Ghana and belongs to one of the world’s largest drinks

Considering Ireland is the home of Guinness, it is not out of place for Guinness Ghana to source some services from there. However, Ireland is also a

tax haven, as is the Netherlands. Diageo Great Britain’s accounts show that it pays a low rate of tax in the UK, while the accounts of the Irish and Dutch subsidiaries are yet to be made public. But the point has to be made that there is no suggestion that such payments to related parties are illegal, as Guinness Ghana may have received approval from the relevant authorities to have made such payments. Nevertheless, concerns have been growing around the world that such payments create a risk of tax avoidance. When this reporter reached out to Guinness Ghana’s Sylvia Ankomah, Head of Corporate Communications for their side of the story, she said: “as part of a global group, we procure a range of products and services from other group companies which support the production and distribution of our brands. All these transactions are conducted on an arms-length basis in accordance with appropriate transfer pricing rules and OECD principles.” MNCs ‘advantage’ Dr. Alex Ampaabeng, a Fiscal Policy Specialist with Oxfam – Ghana said that multinational companies often exploit such transactions to cut their tax bills. (He was not commenting on GGBL’s case in particular). “Multinationals engage in all sorts of creative ways to reduce their tax liability. They tend to organize this through transfer pricing activities (intragroup dealings) such as the payment [between themselves] of technical and management fees, royalties, and loan interests. “The purpose is to ensure that more revenue is realized in low tax jurisdictions. In most cases, developing countries lose out simply because of their high corporate tax rate, due to the limited taxing opportunities in their economies. This is a common practice and in the past companies such as Amazon,

Starbucks, Google have all been accused of profit shifting through some of these means,” he said. Tax avoidance is a particular concern for African countries which raise nearly 19 percent of their total tax revenues from corporate taxes, compared to only 9 percent in wealthy countries, according to new data from the Organisation for Economic Cooperation and Development which was published earlier this month. More scrutiny Commenting on the practice of MNCs indulgence related party transactions, a tax consultant and author, Kingsley Hayford explained that: “The “arm’slength principle” of transfer pricing states that the amount charged by one related party to another for a given product must be the same as if the parties were not related. An arm’s-length price for a transaction is therefore what the price of that transaction would be on the open market. While such payments are not illegitimate, they contribute to the company’s high operational costs, leading to it declare lower profits in Ghana. Over the course of the five-year period, GGBL posted a cumulative profit before tax of GHS28.6m. Assuming that over the period, the company had made no payments for technical fees, royalties and interest, this profit would have been in excess of GHS260m. This would have meant more money for the tax collector. Mr. Hayford believes that the tax authorities must endeavour to conduct regular audits of multinational companies and also get full appreciation of the market value of key services to be able to determine the extent of evasion and surcharge the MNC. He also recommended regular training of tax authority staff to ensure that newer techniques are not used to evade tax or improve Profit shifting. The taxpayer, he added, needs education on the proper reporting of such transactions and serious punishment to companies to engage in profit-shifting. — This story was produced by Business24. It was written as part of Wealth of Nations, a media skills development programme run by the Thomson Reuters Foundation. More information at www.wealthof-nations.org. The content is the sole responsibility of the author and the publisher.

WEDNESDAY DECEMBER 23, 2020

Feature

WEDNESDAY DECEMBER 23, 2020

ICUMS generates GH¢10.5 billion from June – Dec 12 …despite COVID-19 impact on trade volumes…

he Ghana Revenue Authority says the total revenues generated by the Integrated Customs Management System (ICUMS) has reached a record high of GH¢10.5 billion as at December 12, 2020. This consists of GH¢7.6 billion for the Customs Division of the Ghana Revenue Authority from imports and export of goods into and out of Ghana, with the rest being revenues generated by Domestic Tax Revenue Division (DTRD) of the GRA raising GH¢2.7 billion through the ICUMS and non-GRA revenues which is also hovering around some a little over GH¢140 million. The GRA in June 2020 through a press conference addressed by the Commissioner-General stated that prior to the switch over to the new platform, its predecessor, the National Single Window System operated by GCNet in partnership with West Blue Consulting, was generating a monthly average amount of GH¢940 million. However, the new data thus offers justification to government’s decision to have the new platform deployed by South Korea’s CUPIA in collaboration with its local partner, Ghana Link Network Services. Today, government officials and the GRA itself have become enthused with the revenue performance of the ICUMS pointing out that it has improved despite the adverse impact of the COVID-19 pandemic on trade volumes. This, they argue, suggests even better revenue improvement when the pandemic eventually subsides. Apart from June 2020, when revenue generated by the ICUMS drop by almost 4% below what was generated same period in

2019 due to the challenges which dogged the deployment at Tema, the current data has seen an upward trend. Comparing year on year will show that in July 2020 while the ICUMS generated over GH¢1.1billion, the old vendors generated duty payments of GH¢949million. In August 2020, the percentage increase was around 32% because the ICUMS generated duty payment of some GH¢1.2billion while the old vendors (GCNet and West Blue) raised GH¢952million in August 2019. In September 2020 while the ICUMS generated above GH¢1.2billion representing some 35% increase from what the old vendors generated (GH¢920million) in the same period in 2019. November 2019 was the best performance of the old vendors where they raised a little over GH¢1billion but again that was outperformed by the ICUMS and its technical partners -- generating GH¢1.2 billion representing an increase of 26% in percentage terms. In October 2020, the ICUMS raised 35% (GH¢1.3bilion) in revenues higher than wat the GCNet and West Blue (GH¢980million) generated for the government in the same period last year. Clearance Time When it comes to the number of days its takes for one to clear its goods from the port, the Customs Division of the Ghana Revenue through its media engagements on some selected media houses have stated that they have been significant improvements with the clearance time of goods at the

ports and land entering points. According to them, the average number of days for one to clear goods at the ports is 4 days. Average clearance time is calculated from when a declaration is submitted to the ICUMS system till the time that the cargo is released from customs. ICUMS’ success Last week, the Assistant Commissioner of Customs in charge of the Accra Sector Command, who is also the ICUMS implementation Committee Chairman, Mr Emmanuel Ohene in an interview with hailed the success of the ICUMS; saying it is significantly transforming trade facilitation. The success of the system according to him, includes elimination of the multiple routes prior to payment of duties, seamless processes, increasing revenue, speedy processing of pre-manifest declaration, and undertaking classification and valuation in the same system, among others. Second phase Mr Ohene told the media that after a successful implementation of the phase one of the ICUMS, the public should expect the second phase to be rolled-out by the first quarter of 2021. While admitting to some genuine complaints of the trading public regarding the new system, he pointed out that the ICUMS was significantly progressive with regard to trade facilitation in Ghana. He therefore encouraged users of the system to be hopeful as the introduction of the second phase

of the system, would see the few challenges fixed, as well as many added innovations Vendor change The decision to discontinue with the services of GCNet and other service providers by the Government of Ghana GOG was informed by their need to replace the multiplicity of vendors with a single service provider deploying an end-to-end system which as have already been pointed out was to effectively check or limit if not stop the rising cost of doing business at the port, reduce time taken for goods clearance s at the ports for all stakeholders as well as block what the government has identified as huge leakage in revenue mobilization not only at the ports but domestically. The ICUMS is an e-Customs system which provides swift customs clearance, increases government revenue, connects various government and private entities to facilitate cross border trade and ultimately contributes to the economic development. The system is divided into 5 main components: Customs Business, Integrated Risk Management, Single Window, IT Management, and Customs Administration. The ICUMS was first deployed at the various frontiers in March 2020 following a successful pilot at Aflao and Elubo a month earlier in February In April, Takoradi having undergone simulations and stress test tookoff. Then finally Ghana’s biggest port in terms of size and ability to accept cargo volumes, Tema, was hooked onto the ICUMS system on June 1, 2020.

WEDNESDAY DECEMBER 23, 2020

News

WEDNESDAY DECEMBER 23, 2020

AGI introduces mentorship for SMEs By Joshua Worlasi Amlanu macjosh1922@gmail.com

n the wake of the implementation of African Continental Free Trade Area (AfCFTA) agreement, the Association of Ghana Industries (AGI) has introduced a mentorship programme for small and medium enterprises to boost their capacities to take advantage of the agreement. Under this programme, large Ghanaian companies would be paired with the small enterprises to share their expertise and experience with them. “The small enterprises will be linked with the large companies who are well setup and have a lot of experience over the years and can bring their expertise and educate and mentor our small enterprises. In essence, they become like coaches for them,” Mr. Seth Twum-Akwaboah, Chief Executive Officer of AGI said at the launch of MSME market fair held in Accra. Other measures that the

Seth Twum-Akwaboah, Chief Executive Officer of AGI, at the launch of MSME market fair held in

Association continues to propose for the MSMEs sector to take advantage of the AfCFTA is exploring the option of exporting their products to other Africa markets under the agreement using aggregators. “Aggregation is important

to facilitate the export of SME products. This is one of the key options which come with exporting our SMEs and it is very important that we develop it. So, one sure way of getting SMEs involved in the AfCFTA is to have aggregators [well established

marketers] who would be able to develop export markets in the Africa countries,” Mr. TwumAkwaboah said. Recent research has shown that in Ghana, micro, small and medium enterprises (MSMEs) account for 92 percent of businesses and contribute to about 70 percent of Gross Domestic Product (GDP). Most of the small enterprises do not have the capacity to export to other African countries, such as the inability to meet export volumes. The AfCFTA agreement is estimated to create the largest free trade area in the world measured by the number of countries participating. The pact will connect 1.3 billion people across 55 countries with a combined gross domestic product (GDP) valued at US$3.4 trillion. The agreement is estimated to potentially lift 30 million people out of extreme poverty, but achieving its full potential will depend on putting in place significant policy reforms and trade facilitation measures.

Cambridge Center of Excellence picks Project Management Ghana Award

he Cambridge Center of Excellence has been awarded the “Distinguished Contribution to Project Management of the Year” Award at the 2020 edition of the Project Management Ghana Awards held at the Kempinski Gold Coast Hotel. Cambridge Center of Excellence, which is a professional training institution with a focus on capacity building, picked up the award ahead of distinguished organisations such as MTN Ghana and Jospong Group of Companies nominated in the same category. Commenting on the award, the institution’s Lead Consultant, Kwame Ahinkorah stated: “Ghanaian industries need a firm grip on the principles and practices of Project Management in order to compete in the global economy. For the past decade, the Cambridge Center of Excellence has been advancing knowledge in these frameworks to help organisations bring their efforts to the global market.” About the challenges of project management in Ghana, Mr. Ahinkorah added: “Overall project delivery on the continent is still in its infancy. Most projects

lack clear goals. Planning is inadequate and mostly haphazardly done. Resources are poorly optimised leading to lots of wastage. We live in a new era now. Nations are producing and their prayer is for you to remain a consumer. It is about time we say no to that prayer and get to the other side too. It is about time we begin to matter in the global

space. Africa has got great talents. Once we have made that decision things will begin to happen.” The Cambridge Center of Excellence is dedicated to advancing project management education by building capacities in organizational leaders and teams who front project efforts and direct decisions across all sectors of the economy. The center offers tuition in the PMP Project

Management Certification and the Scrum Master Certification at the British Council in Accra The Project Management Award, in its second year, recognises individuals or organisations who pursue best practices in economic development through projects and attained the highest standards of professional conduct and competence within the project management space.

WEDNESDAY DECEMBER 23, 2020

Feature

WEDNESDAY DECEMBER 23, 2020

9 tips to minimize workplace negativity

e must remember that the best way to combat workplace negativity is to keep it from occurring in the first place.

policies and procedures that organize work effectively. Apply them consistently.

cannot over-communicate. Ensure employees are well informed on all issues.

4. Provide Trust and Respect

1. Control Over Their Job

Treat your employees as if they are trustworthy and worthy of your respect—because they really are. Start from a position of trust when you hire a new employee. Verify their performance, truthfulness, and contribution over time to confirm your original position. Do not start from a position of believing that people must earn your trust. That positioning ensures that negativity will take over in your workplace. Employees have radar machines and they are constantly scoping out their work environment. If you don’t trust them they will know you don’t.

7. Provide Opportunity for Growth

Provide opportunities for people to make decisions about and have control and influence over their job. The single most frequent cause of workplace negativity is traceable to a manager or the organization making a decision about a person’s work without their input. Almost any decision that excludes the input of the person doing the work is perceived as negative. 2. Opportunity to Express Opinions Make opportunities available for people to express their opinion about workplace policies and procedures. Recognize the impact of changes in such areas as work hours, pay, benefits, assignment of overtime hours, dress codes, job requirements and working conditions. These factors are very important to the heart and physical presence of each individual. Changes to these can cause serious negative responses. Organizations should provide timely, proactive responses to questions and concerns. 3. Use Consistent Fair Treatment Treat people as adults with fairness and consistency. Avoid favoritism by applying the same standard of accountability and system of rewards to all employees. Develop and publicize workplace

5. Target Punishment and Rules Do not create rules for all employees when just a few people are violating the norms. Most if not all employees are adults. Thus, organizations must minimize the number of rules directing the behavior of these adult people at work. Treat people as adults and they will usually live up to your expectations, and their own expectations. 6. Be Inclusive Help people feel included— each person wants to have the same information as quickly as everyone else. Provide the context for decisions, and communicate effectively and constantly. If your desire is to reduce negativity and gain the confidence and support from your employees, the you

Afford people the opportunity to grow and develop in the organization. Training, perceived opportunities for promotions, lateral moves for development, and cross-training are visible signs of an organization’s commitment to staff. Make your commitment to employee growth and development by creating mutually developed career path plans for every employee. 8. Be a Leader Provide appropriate leadership and a strategic framework, including mission, vision, values, and goals. People want to feel as if they are part of something bigger than themselves. If they understand the direction, and their part in making the desired outcomes happen, they can contribute more. People make better decisions for your business when you empower them with the information they need to make decisions that strategically align with your overall direction. 9. Give Recognition Provide appropriate rewards and recognition so people feel their contribution is valued. The power of appropriate rewards and recognition for a positive workplace is remarkable. Suffice to say, reward and recognition are two of the most powerful tools an organization can use to boost staff morale.

Authored by: Mrs. Margaret TitusGlover Margaret is a certified HR Professional with over 14 years of combined experience in Human Resource Management. A creative thinker, problem solver and decision maker whose experience is in helping start-up businesses develop strong HR policies, procedures and processes. She is experienced in HR Strategy, Benefits Management, Recruitment and Retention Strategy, Performance Management, Orientation/On boarding Programs, Recognition Programs, HR Compliance, Compensation, Employment Policies, Employee Engagement Initiatives and Professional Development. Are you a passionate small business owner and looking to expand or improve your HR capabilities and create a successful plan for growth and sustainability? Then MS Staffing is the right company for you. Contact MS Staffing on: 0248036563 | info@ msstaffinggh.com | www. msstaffinggh.com | Facebook: msstaffinggh | LinkedIn: MS Staffinggh

WEDNESDAY DECEMBER 23, 2020

Feature

WEDNESDAY DECEMBER 23, 2020

The pandemic’s long economic shadow

By Stephen S. Roach

he outlook for economic and financial markets hinges on the interplay between two cycles – the COVID-19 cycle and the business cycle. Notwithstanding the true miracles of modern science that we are now witnessing, the postpandemic economy is in need of more than just a vaccine. Extraordinary damage was done by last spring’s lockdown. Now, a second and more horrific wave of the coronavirus is at hand – not dissimilar to the course of the 1918-20 influenza outbreak. In the United States, the adverse economic repercussions are evident in mounting jobless claims in early December and a sharp decline in retail sales in November. With partial lockdowns now in place in about three-quarters of US states, a decline in economic activity in early 2021 seems likely. The history of the US business cycle warned us of the possibility of a double dip. Eight of the last 11 recessions featured just such a pattern. Yet financial markets still made a big bet on a V-shaped recovery. Investors were lulled into a false sense of complacency by reading too much into the dead-count bounce of a 33% annualized surge in real GDP in the third quarter, as initial lockdowns were lifted. But reopening after a sudden stop hardly qualifies as a self-sustaining economic recovery. It is more like a fatigued swimmer gasping for air after a deep dive. The source of the coming economic relapse hardly comes as a surprise. It is the echo effect of the first wave of COVID-19. Despite extraordinary breakthroughs in vaccines, therapeutics, and treatment protocols, the second wave is far worse than the first in

terms of infection, hospitalization, and death rates. While the new restrictions on economic activity are not as tight as those last April, they are already having an adverse impact on aggregate economic activity. The double dip of early 2021 will be a painful reminder of the lingering vulnerability of the US business cycle in the aftermath of a major recessionary shock. The longer-term consequences of the COVID-19 cycle are likely to be more severe. While mass vaccination points to an end to the pandemic itself (one hopes by late 2021), it does not provide immunity against lasting economic damage. Recent research on the impact of 19 major pandemics dating back to the fourteenth century – each with death counts in excess of 100,000 – highlights the long shadow of the economic carnage. Real rates of return on “safe” European assets – a measure of the interplay between aggregate supply and demand – were found to be depressed for several decades following these earlier horrific outbreaks. The long shadow of the COVID-19 cycle looms as well. Lost in the celebration of an imminent V-shaped economic recovery have been many hints of lasting damage. In the US, employment is still 9.8 million jobs below its pre-pandemic peak, and consumer expenditures on services – restrained by persistent and understandable fears of face-to-face interaction – have recouped only 66% of the plunge that occurred during the MarchApril lockdown. Moreover, a second wave of partial lockdowns will only reinforce dislocations that are now painfully evident in most major US cities, including excess office and public-transit capacity,

along with the devastation of hospitality, entertainment, and retail businesses. The permanent destruction to aggregate supply and demand, in conjunction with fundamental shifts in behavioral norms, aligns the long-shadow contour of the COVID-19 cycle with comparable patterns in the aftermath of earlier major pandemics. The interplay between the short-term dynamics of the US business cycle and the longerterm pattern of the COVID-19 cycle bears critically on the current policy debate. Yet hope is widespread that this time is different – that creative new policy strategies can offer new solutions to old economic problems. That is certainly true of socalled Modern Monetary Theory, which supposedly gives fiscal authorities open-ended license to binge on debt. But MMT is neither modern nor a theory. What is new is something far more basic: the supposed death of inflation. As long as inflation remains subdued, goes the argument, then both monetary and fiscal authorities can ignore the risks of higher borrowing costs and work in tandem in providing relief for a pandemic-stricken real economy. But nothing in economics is forever – not even the death of inflation. Here is where it gets especially tricky. US inflation is hardly immune to further dollar depreciation, which seems increasingly likely, given a sharp deterioration in the US current-account deficit, the strengthening of the euro, and the weak-dollar bias of a Federal Reserve that remains wedded to zero-interest rates. Supply-chain disruptions – reversing the powerful disinflationary forces of globalization – should also boost underlying inflation.

And, of course, there are painful memories of policy mistakes made in the late 1960s and early 1970s, when overly accommodative monetary policy set the stage for a wrenching and lasting acceleration of inflation. How different is today’s seemingly enlightened penchant for openended quantitative easing? The confluence of the pandemic cycle and the business cycle – the second wave of COVID-19 and a double-dip in the US economy – has left US policymakers with little choice but to approve another relief package, this time for $900 billion. Never mind, argues MMT, if that puts US federal debt on the cusp of exceeding the previous record of 108% of GDP, reached in 1946, in the immediate aftermath of World War II. Yet back then, the mounting debt overhang was finessed by a reflationary surge in GDP, which caused the debt-to-GDP ratio to plummet to 47% by 1957. “All” it took was a 6.4% average consumer inflation rate from 1946 to 1951. Maybe that is all it will take this time as well. But what might that spell for interest rates, debt service, and incredibly frothy financial markets? Don’t look to MMT for an easy answer. About author

Stephen S. Roach, a faculty member at Yale University and former chairman of Morgan Stanley Asia, is the author of Unbalanced: The Codependency of America and China.

WEDNESDAY DECEMBER 23, 2020

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