Business24 Newspaper 9th December, 2020 by Business24 Online

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WEDNESDAY DECEMBER 9, 2020

NO. B24 / 137 | NEWS FOR BUSINESS LEADERS

Uncertainty shrouds polls outcome

BoG addresses digital payment needs of SMEs By Joshua Worlasi Amlanu macjosh1922@gmail.com

he Bank of Ghana (BoG) has established a new merchant payment system that will introduce a tiered account structure to ensure that small and medium enterprises (SMEs) are able to access merchant accounts tailored to their needs. Cont’d on page 3

EC attributes delay in declaration to late voting in some areas

By Nii Annerquaye Abbey annerquaye@gmail.com

he Electoral Commission’s inability to deliver on its promise of announcing a winner of the December 7 presential elections is brewing up

uncertainty with the main opposition party accusing the Commission of conspiring to rig the results to favour the governing New Patriotic Party. The former President, John Mahama, running on the ticket of the National Democratic Congress (NDC), said his

ECONOMIC INDICATORS EXCHANGE RATE (INT. RATE)

party had won a majority in Parliament and is in pole position to win the presidential race with key members of his party telling newsmen they will not accept any contrary results. 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

hairperson of the Electoral Commission Jean Mensa has attributed the Commission’s inability to declare the results of the presidential election to sudden rains and delayed voting in some constituencies.

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

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Editorial / News

WEDNESDAY DECEMBER 9, 2020

Editorial

Let’s protect the peace!

hanaians went to the polls on December 7 to elect their parliamentarians and President for the next four years. The process was smooth and peaceful except for some isolated cases of disturbances in some polling stations. Going into these elections, not many gave the Commission a chance to organise a seamless election especially in the midst of the pandemic. But as polls closed in the over 30,000 polling stations across the country on Monday, there was no doubt that the Commission had done a good job and deserve commendation. While elections in Ghana have been characterised by long winding queues, the EC’s proactiveness in setting up a lot more polling stations indeed

contributed to easing the stress voters undergo to cast their ballot. Also, the EC’s enforcement of the COVID-19 protocols also deserves commendation. Nevertheless, it was disappointing to see that at certain polling stations the social distancing rule was largely flouted with impunity especially in places where voters grew impatient due to certain reasons. That said, the aftermath of the elections has seen the two major political parties all claim victory in the presidential race. This development has the tendency to compromise the peace we enjoy. Going into the elections, the EC stated that it was working to deliver the results of the Presidential elections within 24 hours. While this promise

sounded laudable, when measured within the exigencies of our electoral system, it came across as not feasible. Those who cast doubt on the EC’s ability to deliver on its timeline have been vindicated. Despite the good work that has been done by the EC, the delays in getting across certified results to the parties may have contributed to the counterclaims the parties have made. The EC must draw a big lesson from the failure to meet its own set deadline. And to the parties, Ghana’s credentials as a beacon of democracy should not be undermined by your desire to lead. Ghana is bigger than any party and for the average Ghanaian, the only home they know is Ghana!

Uncertainty shrouds polls outcome Continued from cover The two parties are neck to neck in a race that was too close to call. But as results trickled in a few hours after the elections, the opposition National Democratic Congress (NDC) grew stronger as it wrestled more seats held by the ruling party. As at the time of going to press, Accra-based Joy FM which had collated results from 236 constituencies out of 275 shows that the NPP had won 122 with the opposition winning 114 constituencies. In the presidential, the incumbent was leading the race with 51.6 percent of valid votes cast with the former President in a near-distant second with 46.76 percent of all votes counted. In the aftermath of the elections and the inability of the Commission to make an official pronouncement on certified more than 24 hours after polls closed, the parties took to the media to trade accusations. Throughout the flurry of press conferences, the two parties did not only claim victory but they urge their supporters to hit the

streets to celebrate. Earlier, an invitation from EC for the declaration of the results on Tuesday, December 8 was canceled with the commission stating it needs more time to present the outcome of the polls. The Commission is expected to make the declaration tomorrow but even before that the opposition cited multiple infractions nationwide adding that that could affect the outcome of the polls.

Apart from that, the Deputy General Secretary of the NDC Peter Boamah Otokunor urged sympathisers to mass up at the counting centers and keep a keen eye on the ballot. The ruling NPP, on the other hand, appear confident and calm. Its General Secretary, John Boadu, is hopeful that the EC would pronounce them winners just as their internal collation has proved.

WEDNESDAY DECEMBER 9, 2020

BoG addresses digital payment needs of SMEs Continued from cover According to the central bank, the tiered account structure will ensure that different customer types are able to sign on to electronic money accounts suitable to their needs, thereby promoting inclusive access to digital payments. This, the BoG said, is to ensure that SMEs that do not meet the stipulated merchant requirements under the Payment Systems and Services Act 2019 (Act 987) get the opportunity to access merchant accounts that will enable them accept payments by debit or credit cards. Section 32 (1) of the Payment Systems and Services Act mandates categorisation of customer electronic money account on risk-based Know Your Customer (KYC) requirements, which is evidenced by the tiered KYC account structure. At present, the merchant account requirements under Act 987 can be met by merchants that have been registered as corporate

entities only, which excludes SMEs. “This apparent misalignment of digital payments at merchant point of sale undermines the national digitisation agenda on account of SMEs constituting over 85 percent of businesses in Ghana,” the central bank said.

To remedy the situation, the bank has established tiered merchant account categories on risk-based KYC requirements with commensurate transactional limits. The first tier covers small-size entities with average monthly transaction value of not more

than GH¢5,000, whereas the second tier covers medium-size entities with an average monthly transaction value of between GH¢5,000 and GH¢15,000. The third tier covers corporate entities with an average monthly transaction value of above GH¢15,000.

EC attributes delay in declaration to late voting in some areas Continued from cover According to the EC boss, the unexpected rains at some centres had interrupted the voting exercise on Election Day thus leading to some constituencies voting long after the voting deadline nationwide which subsequently affected counting and collation of votes. “Naturally, this had an impact on our plans, in the sense that our offices could not collate the results and forward them to their appropriate locations as planned,” she said. She also mentioned that the rain had made certain areas particularly in the hinter lands inaccessible to the Commission’s officials thus making it difficult for results to be submitted to the EC’s regional offices. “So, this led to some substantial delays resulting in our receiving the results late, and this explains why the Commission was not able to declare the results as promised at 5pm Tuesday,” she

Chairperson of the Electoral Commission Jean Mensa

explained. Jean Mensa was, however, quick to point out that the Commission was working round the clock to ensure that the results were properly collated and due process followed before a declaration is made. “As we speak, the Commission has received 14 out of 16 regional results. We at the National

Collation centre, we’ve had representatives of the political parties since yesterday. We had two reps for each party and they’re working with our own staff. “As the results come in the party representatives review them against what they themselves have received from the region, and once they’re

satisfied that the results that have come to us from the regions is a true reflection of what they have received, they then upend their signatures to it before the results are brought to my attention as returning officer of the 2020 presidential election. I then certify these results,” she stated. She said the EC at the moment has certified seven of the 14 regional results and will be certifying the remaining seven in due time. The remaining two will be arriving at the Commission’s headquarters Wednesday morning, Jean Mensa said. “We’ve also put the seven results we’ve received, approved and certified on the various social media platforms and the website of the Commission so we are entreating the citizenry to visit our websites and our social media platforms to review the results of the seven regions that have so far been certified.” Joy FM

WEDNESDAY DECEMBER 9, 2020

News

WEDNESDAY DECEMBER 9, 2020

ICUMS sees 70 per cent improvement in clearance process

he initial challenges of the Integrated Customs Management System (ICUMS) has been reduced by about 70 per cent eight months into the introduction of the system. Emmanuel Ohene, an Assistant Commissioner of Customs in charge of the Accra Sector Command, said the initial delay that users of the system faced when processing bill of entries for example was a thing of the past. Mr Ohene, who is also the Chairman of the Implementation Team of the Integrated Customs Management System (ICUMS),

said it took about two hours to process a pre-manifest declaration once an importer through his or her agent submits documents in ICUMS that were not subject to any queries. “One of the very attractive modules which is being used by about 70 per cent of the freight forwarders is the pre manifest declaration; it is one of the pillars of trade facilitation agreement from the World Trade Organization. It allows you to process paperwork and make payment prior to the arrival of the vessel,” he explained. Mr Ohene attributed the success

of ICUMS to the decentralization of clearance processes from the Customs Technical Services Bureau. He said outstations across the various frontiers of the country could manage some of the various customs regimes, including import, export, re export, and transit, among others. “In a place like Elubo, where we had a lot of complaints, the decentralization has taken place. The same as Aflao,” he said. Mr. Ohene said the initial problem of manifest matching that bedeviled the system was currently non-existent. He said ICUMS broke down the previous Pre-Arrival Assessment Reporting System (PAARS) and

ensured that classification and valuation were done through the ICUMS with a Customs supervisor, who quickly verified documents and generated a tax bill. This, according to him has “eliminated the multiple routes one had to go through prior to the payment of duties,” which is a hallmark of the ICUMS system. He said before ICUMS, 141 customs officers across the country that hitherto were operating manually were brought on-board the ICUMS automated systems and by end of first quarter of 2021 all customs offices would be on-boarded. While admitting to some genuine complaints of the trading public regarding the new system, the Assistant Commissioner of Customs insisted that ICUMS were significantly progressive with regard to trade facilitation in Ghana. He encouraged users of the system to be hopeful as the ICUMS team plans to soon introduce the second phase of the system, which would see the few challenges fixed as well as many added innovations. GNA

350,000 existing ECG customers to benefit from Pokuase BSP

bout 350,000 existing customers of the Electricity Company of Ghana (ECG) will benefit from the Pokuase Bulk Supply Point (BSP) upon completion in May next year. The project, which is 87 per cent complete, would hold 580 MVA and redistribute to the area and ensure steady power. Residents of Kwabenya, Ofankor, Legon, Nsawam, and Anyah will heave a sigh of relief upon completion since there would be sufficient power supply to boost their business operations and domestic purposes. The US$50 million project is being funded by the United States Government through its Agency, the Millennium Challenge Corporation (MCC). Two million US dollars has been spent on corporate social responsibility projects such as road construction and donations to health facilities within its catchment areas. Mr. Patrick Kwame Oppong, the BSP Project Manager, who briefed the media on Thursday during a project site visit, said a total of US$10 million had been spent on local sub-contractors for

undertaking some aspects of the project in compliance with the local content policy directives. The Project is being executed by the Millennium Development Authority (MiDA), with Elecnor SA Ghana as the contractors and Surbana Jurong Group as the supervising engineers.

Mr. Mateo Perez Camino, the Country Director of Elecnor SA Ghana, told the media that major works on the BSP were nearing completion including the Control Buildings for GRIDCo and the ECG, drainage systems, installation of transformers, fencing, gantries, Switchgears and storage yards.

Currently, he said, cables were being laid and some equipment commissioned. He said the company had been complying with the environmental and COVID-19 safety protocols. He informed that about 95 per cent of the workforce at the substation were Ghanaians, who were benefiting for knowledge transfer and would subsequently manage the facility when it is finally handed over to the government. The Pokuase BSP, the fourth Bulk Supply Point in Accra, is designated as A4BSP, and its associated 33 kilovolt and 11 kilovolt interconnecting lines intended to address power supply challenges including frequent outages and low voltages, resulting from increased power demand in Accra and the surrounding communities. The Project would also lead to a significant reduction in technical losses in the GRIDCo transmission system and the ECG power distribution, which would contribute to improving the financial viability of the utilities.

WEDNESDAY DECEMBER 9, 2020

Feature

WEDNESDAY DECEMBER 9, 2020

The Digital Series: Championing a Digital Culture

n a typical digital transformation effort, C-Level executives often overlook the importance of driving a digital culture. Leaders of digital transformation efforts are often preoccupied with getting the technology and process changes right, that they overlook the people side of things. In the few cases where people are considered, it is most likely about training them to use the technology and adhering to the new processes. In this article, I will introduce you to the concept of Digital Culture and how it can make or break your digital transformation efforts. I will also share some tips on successfully driving a digital culture to see positive digital transformation results Digital culture It is a known fact that successful digital transformation efforts come about as a result of driving a strong digital culture. In their 2018 research of 40 digital transformation efforts, the BCG Group found that companies that focused on driving a strong digital culture posted a strong financial performance (90%) than those which did not (17%) (www. bcg.com). They also found that 80% of companies that focused on digital culture as part of their digital transformation efforts sustained their performance for at least 3 years (www.bcg.com). These are powerful observations, given that culture is difficult to change in any organizational context. Think of it as altering your very DNA, and in this case, the deep-rooted values, beliefs, and experience of hundreds, if not thousands of employees to adhere to new ways of working, digitally. Digital culture goes beyond just learning to use technology or learning to adhere to new digital processes. It embodies

the set of values, characteristics, and behaviors that define how things get done digitally in an organization to advance the goals and objectives of the organization. Driving a digital culture In driving a digital culture, it is important to know and understand the existing organizational culture and identify the behaviors that propel this traditional culture. On the other side of the continuum, having a clear picture of the desired culture and defining the behaviors that will characterize this target digital culture is the first step in driving a successful digital culture. 1. Define the necessary behaviors: Perhaps one of the most difficult aspects of driving a digital culture is defining the behaviors that exemplify the culture. Before the set of behaviors is defined, it is paramount to have a goal and a target digital culture. It could be a customerexperience focused culture or an agile-way-of-working. Once the goal has been determined, the cultural characteristics that lead to such outcomes must be defined and then translated into specific behaviors that spell out the rules of engagement (“culture code”). These target behaviors must then be well-integrated into existing communication channels to foster the needed cultural change. 2. Active engagement and the opportunity to lead: In a fast-paced, digitally-driven organization, teams need to act autonomously to make decisions that favor customers, on the go. This, therefore, requires that employees are empowered to become self-leaders who can challenge the status quo. For instance, by taking up leading

roles at meetings, managers can provide real-time feedback on leadership behaviors. Through active engagements, leaders of digital transformation efforts constantly engage employees, encouraging them to take risks, fail fast, and learn fast. Finally, to drive a digital culture, leaders encourage collaboration and first-time-right thinking to deliver value without the need for rework. 3. Integrate and scale: Traditional ways of working encourage a chain of command, and teams competing for scarce resources. On the contrary, however, a digital culture encourages creativity and greater autonomy, in place of control and micromanagement. It is recommended to hire a digital culture champion, for instance, a Chief Digital Officer (CDO) who would lead a team of digital culture experts to ensure that the new digital culture is well integrated into the various organizational business units. Another approach is to craft new ‘Vision’, ‘Mission’ and ‘Values’ statements that are aligned towards the new digital culture and integrate them into the performance review of employees with a reward and/ or punishment structure for adherence and non-adherence. Conclusion Driving a digital transformation strategy is not only about securing the right technologies and designing the right processes. It also involves driving the right digital culture, which has proven to be the most difficult but also the most rewarding if done right. To be successful at it, it is important to note that there is nothing new under the sun. Learning from those who have successfully driven a digital culture is the sure best way to define and drive your own digital culture. In the

current age of digital, technologydriven companies are still paving the way, making them the best candidates to learn from. In driving a successful digital culture, it is important to adopt a design thinking approach and prioritize the following: • Impact: The level of innovation and change that is allowed, even if radical. • Speed: The need to move quickly in meeting customer needs (with iterations), instead of planning forever without action. • Openness: Effectively communicating the agenda, engaging a broad spectrum of digital innovators, and sharing information. • Autonomy: Allowing employees higher levels of decision-making discretion to use data to make decisions (datadriven) that favor customers (customer-centricity) instead of relying on a formal bureaucratic hierarchy of decision making. Finally, to close the leadership – employee divide, it is important to hire a digital culture champion, a CDO, to lead a team of digital experts who will engage both senior management and employees to drive the digital culture strategy. About the Author Kwadwo Akomea-Agyin is a seasoned business professional with 12+ years of progressive experience in consultative business development, product and digital transformation solutions. He has a unique ability to understand the market (i.e. buyer and user requirements), and collaborate with key internal stakeholders to translate such business needs into Unique Value Propositions (UVPs) that can be successfully delivered. He is a member of IIPGH and a regular contributor to this column. Contact Kwadwo on WhatsApp: +233544341374 | Email: kojo.e@ live.com | Skype: Kwadwo_2010

WEDNESDAY DECEMBER 9, 2020

Feature

WEDNESDAY DECEMBER 9, 2020

The pandemic public-debt dilemma

ncreased government spending during the pandemic is essential for managing public health, supporting households that have lost income, and preserving businesses that otherwise may fail and thus cause longer-term damage to output and employment. Kristalina Georgieva, the managing director of the International Monetary Fund, has urged policymakers to “spend but keep the receipts.” Likewise, World Bank Chief Economist Carmen M. Reinhart reminds us that, “first you worry about fighting the war, then you figure out how to pay for it.” Although these are sound recommendations for countries with solid fiscal foundations, the long-term risks of increased spending may be dangerously high for others. In 2008, the Commission on Growth and Development (on which we both served) showed that successful developing countries owe their economic growth in part to the quality of their social and capital spending. And the most successful of these countries, we found, had run their economies with savings levels at or close to investment levels, such that their current account deficits were small. Today, however, there are many countries – some that entered the pandemic already highly indebted – that have not been effective stewards of public resources, owing to poor project selection and implementation, ineffective targeting of social

spending, wasteful subsidies, or outright corruption. Both the World Bank and the IMF have effective tools for measuring the quality of public spending, and there are a plethora of indices showing how well a country’s governance fares across standard benchmarks. For governments with a poor track record, simply borrowing and spending more may not be the best course of action. After all, a country’s citizens are not well-served when their government becomes more indebted in order to spend imprudently. For such countries, borrowing in hard currencies when exports are depressed and their own exchange rates are under duress simply makes future debt re-scheduling more likely, and it may place international financial institutions like the IMF in an awkward position, given that they are now urging additional unconditional spending. Economic growth depends on high returns from public investment in human capital and infrastructure. Countries that have invested wisely in these areas have seen their economic fortunes rise, whereas those that have invested poorly have been left more indebted and less able to repay, especially if those debts are in a foreign currency. Given that most developing countries have limited scope to borrow in their own capital markets, any additional spending is likely to be externally and commercially financed. That is potentially a

recipe for disaster. In today’s low-interest-rate environment, it is often said that as long as borrowing costs are below the rate of growth, additional debt-financed spending makes sense. But, again, while this argument is defensible when applied to rich countries, it poses dangers in the context of emerging and developing economies, where factors such as the efficiency and equity of spending matter greatly. These issues must not be overlooked – even during a pandemic – because they can increase future debt burdens and reduce the chances of long-term successful development. Moreover, there are more effective approaches to deal with the fiscal dilemmas facing emerging and developing economies. These include increasing the amount of targeted assistance for vulnerable populations; extending the duration of IMF lending, which could be conditional on assurances that resources will be put to good use; and combined IMF and World Bank programs that include fiscal-performance measures. In the aftermath of the 1980s debt crises, the Bretton Woods institutions collaborated to produce medium-term policy frameworks that would both provide new financing and embed funds in sensible development plans. Such formal frameworks could now be revived in some fashion to provide greater

assurances to creditors that key structural bottlenecks and governance concerns are being addressed. Any such initiative would need to be endorsed by the G20, which has already agreed to work toward a new global debtrestructuring framework. This approach must formally include all major creditor countries. It is in the interests of all creditors to join such an exercise, both to avoid free-rider problems and to ensure transparency of debt information. Extraordinary times call for extraordinary measures. Failing bold action, developing countries could be on track to lose years or even decades of progress in the post-pandemic world. In the pandemic economy, fiscal shock absorbers, efficient public spending, and new instruments for pre-emptively re-profiling unsustainable debt payments are each an indispensable part of the necessary response. About Michael Spence Michael Spence, a Nobel laureate in economics, is Professor of Economics Emeritus and a former dean of the Graduate School of Business at Stanford University. He is Senior Fellow at the Hoover Institution, serves on the Academic Committee at Luohan Academy, and co-chairs the Advisory Board of the Asia Global Institute.

WEDNESDAY DECEMBER 9, 2020

Banking

WEDNESDAY DECEMBER 9, 2020

First National Bank demonstrates strength in arranging government and corporate bonds

he Head of Client Coverage at First National Bank Ghana, Richard Kokoih, has affirmed the bank’s commitment to supporting the government in its bond-issuance programme that will increase the availability of funds for financing of developmental projects. According to Mr Kokoih, the important role of banks like First National Bank in supporting the government and corporate institutions in the bond issuance process cannot be underestimated at this time. Commenting after a member of the FirstRand Group, RMB Nigeria won the 2020 Merchant Bank of the year for the third consecutive year and the 2020 Debt arranger of the year for the second consecutive year at the Business Day awards in Nigeria, Mr Kokoih said First National Bank has access to a pool of investors who when called upon will be willing to invest in government and corporate securities at good rates. “We are appointed lead arrangers/managers, coarrangers/managers or book runners due to our access to a wide range of investors both locally and globally, and we support with the distribution end-to-end,” Mr. Kokoih says. “It is even the reason why apart

from the government, corporates may start speaking to their bankers today to understand the process of debt capital market issuance. And let me say when we either lead or play a role in bond issuance, we ensure that the beneficiary institution or the government receives good rates or what we call value for money.” If considered as part of the arrangers for Ghana’s bond programme over the years, First National Bank will look at raising funds that are used to provide long-term currency finance for government businesses and also protecting the nation from

foreign-exchange risks, the head of coverage of First National Bank added. “We are delighted to put our capital markets expertise, extensive Africa presence and knowledge of international and local markets to work in partnership with the government of Ghana on its landmark initiatives like the century bond which brings funds that helps the government meet its development goals,” Mr. Kokoih said. In recent times, the international and local capital markets have accepted risk on Sovereign issuances on the

international scene and Ghana was able to issue its first longdated maturity bonds, worth billions, running into 2051 tenors. In April 2019, Ghana went to the market and successfully priced its $3bn Eurobond issuance when the appetite and comfort from investors for the country’s bonds was high. Explaining why corporates should be encouraged to issue bonds, Mr. Kokoih said, bonds usually have longer maturity (5-10years or more), larger funding sizes due to the more liquid global or domestic investor pool and have no amortization requirement, which reduces the pressures on short term cashflow. Mr. Kokoih further recommended that local corporate firms work on their books and consider issuing bonds which will help in extending the maturity profile of the debt, widening the issuer’s institutional investor base which will benefit future equity and capital market activities and provide greater operational flexibility and mitigate any liquidity concerns. Currently, there are nine (9) corporate clients who have issued corporate bonds amounting to about GHS7.3bn (USD1.5bn) with E.S.L.A Plc accounting for over 90% (GHS5.66bn) of the issuance.

UBA’s Group MD honoured with Prestigious Zik Leadership Award

he Group Managing Director/Chief Executive Officer, United Bank for Africa (UBA) Plc, Kennedy Uzoka, was on Sunday night presented with The Zik Prize for Professional Leadership. The award was presented by the Secretary to the Government of the Federation (SGF), Boss Mustapha, under the chairmanship of Nobel Laureate, Professor Wole Soyinka at a glamorous event held at the Civic Centre in Lagos, and organised by Public Policy Research and Analysis Centre(PPRAC) Uzoka was announced as the winner of the muchcoveted award alongside the Executive Vice Chairman/Chief Executive Officer at the Nigerian Communications Commission, Prof Umar Danbatta. As he applauded the efforts of the organisers, Kennedy Uzoka said, “The Late Nnamdi Azikiwe is someone to whom I accord great respect; he is an iconic African statesman (Zik of Africa as he is

fondly called). I am proud to be receiving an award that was first conferred on the late premier 25 years ago. I dedicate this award to the staff of the UBA Group in all our 23 countries of operations. They really are the best”. Kennedy Uzoka received the award after a thorough, careful and rigorous selection process. His name was announced by Members of the Advisory Board, PPRAC, Professor Pat Utomi, and Executive secretary, Emeka Obasi, who stated that Uzoka was selected as a result of his outstanding contributions to the development and growth of the Banking and Financial Services Industry and also for an unblemished record of service as a banker of international repute. Apart from Uzoka and Danbatta, other winners in various categories of public service, good governance, business, and professional leadership include Senate President Ahmed Lawan; Borno Governor, Professor Babagana Umara Zulum; Delta

State Governor, Ifeanyi Okowa; Oyo State Governor, Seyi Makinde; SGF, Boss Mustapha; Dr. Stella Okoli amongst others. As it celebrates the silver jubilee anniversary of the Zik prize in leadership awards, the PPRAC, organisers of the award, reminisced that in the last 25 years, some other notable leaders have been recipients of the prize including: The former President of Ghana, Jerry Rawlings; former President of Tanzania, Nwalimu Julius Nyerere; former President of Kenya; Dr. Salim Ahmed Salim; former President of Namibia,

Sam Nujoma; former President of South Africa, Dr. Nelson Mandela; Former President John Agyekum Kufuor of Ghana, and President Yoweri Museveni of Uganda. Other past winners include the former Senate President David Mark; former Defence Minister, Alhaji Yayale Ahmed; founder, First City Merchant Bank, Otunba Subomi Balogun; former President of Liberia, Ellen Johnson Sirleaf; former Permanent Secretary, Alhaji Ahmed Joda and the Nigerian Central Bank Governor, Mr Godwin Emefiele.

WEDNESDAY DECEMBER 9, 2020

World

WEDNESDAY DECEMBER 9, 2020

Competition and Markets Authority plans tailored rules for tech giants

he UK is set to issue Facebook, Google and the other tech giants sets of rules customised to each firm, and penalise them if they fail to obey. The tailored codes of conduct is part of a plan unveiled by the Competition and Markets Authority, which it says would “proactively shape the behaviour” of the companies. The CMA intends to create a Digital Markets Unit within itself to draw up the rules and govern compliance. However, legislation is required. The watchdog wants the new unit to be able to fine the tech companies up to 10% of their global turnover if they do not comply with the remedies to anti-competitive behaviour it demands. For Google that would amount to over $16bn (£12bn), and Facebook more than $7bn, based on their most recent full year results. The intention is for the new unit to become operational in April, but it will only gain the powers it needs if MPs vote to grant them, and that may not happen until 2022. In the meantime, lobbyists from the tech firms are likely to try to limit its reach. And experts question how much influence the unit will have compared to the European Commission and US regulators.

Tougher takeover rules Until now, the European Commission was responsible for most large and complex competition cases involving the UK. But after 1 January, the CMA is set to take over these responsibilities on a local level due to Brexit. Last week, the organisation first set out how it planned to govern the behaviour of tech platforms “that currently dominate” online markets, and give consumers “more control over how their data used”. The latest announcement fleshes out some of the detail. It says there would be three pillars to the new regime: • the new codes of conduct, which would detail how they do business with other companies and how they should treat their users • interventions to aid competition, with one proposal being to require the tech firms to make their services interoperable - for example allowing a proprietary app to run on rival’s operating system or hardware • enhanced merger rules, which would allow the authority to block takeovers and other transactions until those involved could convince the watchdog that consumers would not be harmed as a consequence Although large fines are a possibility, the authority says it hopes most cases would be

settled on an informal basis. This might involve, for example, Google approaching it to discuss a takeover - such as its pending purchase of Fitbit - at an early stage, to ensure the move would not further entrench its dominant positions in search and online advertising. “The UK needs new powers and a new approach,” said the CMA’s chief executive Andrea Coscelli. “In short, we need a modern regulatory regime that can enable innovation to thrive, while taking swift action to prevent problems.” One industry-watcher welcomed the idea of trying to tackle problems “up-front” rather than after market abuses have occurred. But she said the measures should have been introduced years ago. “It’s great that Facebook, Google and Amazon are each going to be regulated in their own ways because they are all different to each other,” said Rachel Coldicutt, an independent technology policy consultant. “But it’s equally ridiculous that we’re now in a position that these companies have been allowed to become so big that they need bespoke regulations. “And inevitably there’s an issue about the amount of clout the UK is going to have now that we’re leaving Europe.” Big tech

The CMA has not provided a list of the tech giants that would be the focus of the Digital Markets Unit’s efforts. But it has said they would be included if they were recognised as having “strategic market status”, by which it means they must have substantial and widespread market power. Other companies likely to be covered are Apple, Microsoft, Netflix and Airbnb. “It is important that the CMA continues its consultative approach, ensuring decisions are fully informed by facts and a thorough understanding of digital markets,” said Antony Walker, chief executive of the techUK, which represents hundreds of large and small tech firms. The government will now consult on the plan before writing the necessary change to the law. The announcement comes a week before the European Commission unveils its own regulatory plans for the world’s largest tech companies. It was originally expected to have revealed its proposals by now. But the EU’s regulator has now pencilled in 15 December as the day it will publish details of its Digital Services Act and Digital Markets Act, which it has said will address illegal content, unfair behaviour and the “choking off ” of business opportunities for smaller firms.

WEDNESDAY DECEMBER 9, 2020

Feature

WEDNESDAY DECEMBER 9, 2020

America passed the Trump stress test

he all-but-completed US presidential election has upset a range of lurid predictions. We were told that ballots would not be counted, voting machines would be hacked, state legislatures would order electors to defy the will of the people, armed thugs would intimidate voters, and riots would erupt – with the police taking the side of the “law and order” president. President Donald Trump, true to form, has indeed refused to concede, accused Democrats of fraud, and challenged the election in the courts. But he has no realistic prospect of remaining in office after Inauguration Day. Those arguing that Trump’s post-election behavior amounts to an attempted coup d’état are misreading the situation. Trump’s refusal to concede means nothing. His legal challenges are frivolous and have been swatted away by courts. He has lost. While many Republican voters tell pollsters that the election was stolen, hardly any of them have taken to the streets or pursued tactics that one would expect from people who truly believe that democracy has been subverted. There has been no Hong Kong-style uprising. Trump’s attacks on American institutions are largely a form of political performance art. It is tempting to say that Trump has nonetheless damaged the US electoral system, and American constitutional democracy more generally. The basic claim – repeated with extraordinary frequency over the past four years – is that Trump has subverted certain “norms” that are crucial to the functioning of democracy. These unwritten rules ensure that the two main political parties cooperate, that the will of the people is respected, and that politics does not degenerate into violence. If a president flouts or attacks these norms, they will disintegrate, making democracy impossible. This worry was certainly legitimate. But, paradoxically, Trump’s attacks on American democracy seem to have strengthened rather than weakened it. Consider the election. Political scientists have lamented for decades that too few Americans vote or bother to pay attention to politics. Yet voter turnout this year as a percentage of the eligible population was the highest it has been since 1900. Despite

the hardships and constraints of the worst health crisis in a century, people donated money to candidates, argued with each other online, and organized on a massive scale. Notwithstanding the conspiracy theorizing, polarization, and persistent sense of turmoil, these are signs of a healthy democracy. Similarly, while Trump has attacked the press as the “enemy of the people,” often criticizing various journalists by name, major media outlets have flourished. Print and digital subscriptions to The New York Times, one of Trump’s chief “enemies,” have soared, from three million in 2017 to seven million in 2020. CNN, MSNBC, and Fox News all enjoyed record ratings in 2020. Nor is there evidence that journalists or commentators have suppressed stories or opinions because they feared government retaliation. The judiciary, another frequent target of Trump’s criticisms, has also maintained its independence. In addition to rejecting Trump’s baseless election challenges, judges have dealt his administration defeat after defeat. Trump’s efforts to deregulate the economy, while applauded by conservatives, have been blocked by courts in the vast majority of cases brought before them – and far more frequently than with previous administrations. Courts have also interfered with many of Trump’s signature efforts to limit illegal immigration, in some cases sharply criticizing the administration. And while Trump has moved the judiciary to the right, the judges he appointed appear to be taking their jobs seriously. The larger point is that violations of norms do not always succeed; often, they expose flaws

that can be ameliorated through the democratic process. After President Franklin D. Roosevelt violated the norm against serving more than two terms, the norm was codified in the US Constitution with the TwentySecond Amendment. And even when violations of norms cause them to disintegrate, that’s not always a bad thing. In many cases, the norms reflected past practices and had outlived their usefulness. In retrospect, the presidents who violated them seem farsighted rather than retrogressive. In the nineteenth century, presidents violated norms that prohibited them from campaigning while in office (which was considered undignified) or from appealing directly to the people (rather than working through Congress). These norms disintegrated because earlier notions of elite governance lost their purchase on the polity as democratic ideals strengthened. Political norms, like moral norms, are powerful precisely because they cannot be destroyed by a few prominent people. When they erode, it is because they conflict with emerging principles or new political realities. By contrast, Trump’s attacks on competing power centers in the US political system mostly served to remind people why these power centers are so important in the first place. Trump himself seems to have understood this, considering that his attacks were merely rhetorical. As far as we know, he did not take concrete actions to undermine the press or weaken the courts – for example, by ordering investigations or prosecutions, or pushing legislation that could hamper their activities. Nor did he use law enforcement

or other government processes to harass Democrats or other political opponents, as much as he might have wanted to. His incendiary rhetoric backfired – costing him important votes among Republicans and stimulating massive turnout from Democrats, while doing little to harm his targets. Americans’ confidence in public institutions, as measured by Gallup, appears not to have declined over the course of the Trump administration (though a downward trend long predates him). Trump probably hoped (and continues to hope) that by attacking the election, he could sway Republican politicians, judges, and others to overturn the outcome. Perhaps, if enough voters took to the streets, and enough officials calculated that a grateful Trump would award them with future sinecures, these officials would have delivered for him. But that didn’t happen. The main reason it didn’t happen – aside from the fact that nearly all electoral officials performed their roles with integrity – is that Trump is not a popular president. Given that he lacked the political support to win the election, it is not surprising that he also lacked the political support to overturn the result. It will be a long time before historians have fully assessed Trump’s impact on America’s constitutional democracy. Clearly, his term in office has exposed some serious shortcomings, probably the most important of which are the outsized influence of ideologically extreme voters in the presidential primary process, and the excessive role of money in politics. But American democracy remains strong – at least for now.

WEDNESDAY DECEMBER 9, 2020

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